<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the 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 0-25908
------------------
JUST LIKE HOME, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 65-0568234
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3647 CORTEZ ROAD WEST 34210-3106
BRADENTON, FLORIDA (Zip Code)
(Address of Principal Executive Offices)
REGISTRANT'S TELEPHONE NUMBER AND AREA CODE: 941-756-2555
2440 TAMIAMI TRAIL NORTH 34275
NOKOMIS, FLORIDA (Former Zip Code)
(Former Address of Principal Executive Offices)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $.001 NASDAQ
(Title of Class) (Name of Each Exchange on
Which Registered)
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 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 .
----- -----
As of September 30, 1997, there were outstanding 7,073,711 shares of Just Like
Home, Inc. Common Stock, par value $.001.
<PAGE> 2
ITEM 1. FINANCIAL STATEMENTS
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $ 641,432
Restricted cash 614,444
Accounts receivable - trade 49,804
Due from related parties 241,696
Construction Work in Process 751,800
Other current assets 167,942
------------
Total current assets 2,467,118
------------
Property and equipment, net 2,285,564
Property held for sale 1,521,608
Intangible assets, net 1,166,301
Other Assets 17,963
------------
4,991,436
------------
Total Assets $ 7,458,554
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 312,355
Accrued interest 11,820
Accrued compensation 87,665
Current portion of long-term debt 1,127,500
Other current liabilities 105,027
------------
Total current liabilities 1,644,367
------------
Long-term debt 1,686,084
Note payable to related party 478,306
------------
2,164,390
------------
Total liabilities 3,808,757
------------
Common Stock and Options Subject to Put Options 868,282
------------
Stockholders' Equity
Preferred stock, $.01 par value; 2,000,000 shares
authorized; none issued and outstanding 0
Common stock, $.001 par value; 13,000,000 shares
authorized; 7,073,711 shares issued
and outstanding 6,858
Additional paid-in capital 8,869,645
Accumulated deficit (6,094,988)
------------
Total stockholders' equity 2,781,515
------------
Total Liabilities and Stockholders' Equity $ 7,458,554
============
</TABLE>
See accompanying notes to consolidated financial statements
1
<PAGE> 3
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Resident fees $ 320,860 $ 434,585 $ 818,196 $ 1,307,934
Companion care fees 15,880 93,809 18,415 249,561
Consulting fees 143,772 - 384,459 336,148
Management Fees 25,185 20,884 75,885 67,924
Other income 61,756 27,562 131,637 93,480
---------- ---------- ------------ -----------
Total revenue 567,453 576,840 1,428,592 2,055,047
---------- ---------- ------------ -----------
Expenses:
General and administration 481,947 436,067 1,252,763 1,350,310
Resident care expenses 237,184 419,514 544,053 1,039,908
Companion care 52,267 114,898 96,094 307,740
Consulting expenses 120,101 102,651 370,190 391,792
Depreciation and amortization 70,818 241,262 159,238 322,439
---------- ---------- ------------ -----------
Total expenses 962,317 1,314,392 2,422,338 3,412,189
---------- ---------- ------------ -----------
Operating Loss (394,864) (737,552) (993,746) (1,357,142)
---------- ---------- ------------ -----------
Non-Operating Income (Expense)
Interest expense (89,259) (97,125) (207,752) (318,910)
Interest income 13,015 34,390 64,438 70,385
---------- ---------- ------------ -----------
(76,244) (62,735) (143,314) (248,525)
---------- ---------- ------------ -----------
Loss Before Income Taxes (471,108) (800,287) (1,137,060) (1,605,667)
---------- ---------- ------------ -----------
Income Tax Expense - - - -
---------- ---------- ------------ -----------
Net Loss $ (471,108) $ (800,287) $ (1,137,060) $(1,605,667)
========== ========== ============ ===========
Net Loss Per Common Share $ (0.12) $ (0.11) $ (0.29) $ (0.27)
========== ========== ============ ===========
Weighted Average Common Shares Outstanding 3,921,627 7,073,711 3,910,582 5,929,137
========== ========== ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE> 4
JUST LIKE HOME, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1996 1997
---- ----
<S> <C> <C>
Cash Flows used in Operating Activities: $ (535,596) $ (572,907)
============ ===========
Cash Flows from Investing Activities:
Proceeds from sale of assets - 978,009
Acquisitions of property and equipment (3,559,418) (64,967)
Costs of property held for sale - (1,521,608)
Loans to related parties (26,012) -
Repayments of related-party loans 23,168 -
Payments made organization costs and intangible cost (458,724) (186,371)
Payments for other assets (96,479) 66,677
Purchase of certificate of deposit (800,000) -
Proceeds from certificate of deposit 1,150,000 -
Deposits into restricted cash accounts (2,016) (281,782)
------------ -----------
Net cash used in investing activities (3,769,481) (1,010,042)
------------ -----------
Cash Flows from Financing Activities:
Proceeds from mortgages and notes payable 2,900,510 -
Repayment of mortgages and notes payable (73,419) (256,815)
Borrowings from related parties - (91,490)
Repayment of related-party loans (4,166) -
Issuance of common stock 1,545,749
------------ -----------
Net cash provided by financing activities 2,822,925 1,197,444
------------ -----------
Net (decrease) in cash (1,482,152) (385,505)
Cash, beginning of period 1,847,974 1,026,937
------------ -----------
Cash, end of period $ 365,822 $ 641,432
============ ===========
</TABLE>
In 1996 the Company issued 40,351 shares of common stock, valued at
$460,000 in connection with the acquisition of Charis Place, Inc.
See accompanying notes to consolidated financial statements
3
<PAGE> 5
JUST LIKE HOME, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
Just Like Home, Inc. and Subsidiaries (the "Company") have not changed their
accounting and reporting policies from those stated in the 1996 annual report.
These unaudited interim consolidated condensed financial statements should be
read in conjunction with the audited financial statements and related
disclosures included in the Company's annual report on Form 10-KSB for the year
ended December 31, 1996, and also the restated audited financial statements and
footnotes included in the Company's 8-K filing dated April 14, 1997, and
amended June 23, 1997.
In the opinion of the management of the Company, the accompanying unaudited
consolidated condensed financial statements contain all adjustments, consisting
only of normal recurring accruals, necessary to present fairly the Company's
financial position, results of operations and cash flows for the periods
presented. The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
NOTE 2 - NET LOSS PER COMMON SHARE
Primary net loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding during each period.
Common stock equivalents are not included in the calculation as their impact
would be anti-dilutive.
NOTE 3 - BUSINESS COMBINATION
On April 30, 1997, the Company acquired Community Assisted Living Centers, Inc.
("Community") through the issuance of the Company's common stock. The
acquisition was accounted for using the purchase method of accounting. The
purchase price of $1,646,250 (1,646,250 shares of common stock) was allocated
based on estimated fair values at the date of acquisition, which resulted in an
excess of purchase price over assets acquired of approximately $867,000. This
goodwill is being amortized over a five-year period.
For the nine months ended September 30, 1996 the Company reported $861,138 of
revenues and a net loss of ($665,954). Community was not in operation for this
entire period. In 1997, prior to consummation of the business combination with
the Company, Community recorded $12,990 of revenue and a net loss of
($132,246).
4
<PAGE> 6
The following unaudited pro forma information presents a summary of
consolidated results of operations of the Company and Community as if the
acquisition had occurred January 1, 1997. Pro forma results for the same
periods in 1996 have not been presented as Community was not in operation for
this entire period.
<TABLE>
<CAPTION>
3 months ended 9 months ended
September 30, 1997 September 30, 1997
------------------ ------------------
<S> <C> <C>
Revenues $ 589,830 $ 2,068,037
Operating Loss $ (869,798) $ (1,489,388)
Net Loss $ (932,533) $ (1,737,913)
Net Loss Per Share $ (0.13) $ (0.27)
</TABLE>
These pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of the results of operations which actually would
have resulted had the acquisition occurred on the date indicated, or which may
result in the future.
NOTE 4 - FUTURE ACCOUNTING REQUIREMENTS
Comprehensive Income: In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No. 130, Reporting of
Comprehensive Income, which established standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of financial statements. This statement also requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements.
This statement is effective for fiscal years beginning after December 15, 1997.
Earlier application is permitted. Reclassification of financial statements for
earlier periods provided for a comparative purpose is required. Management does
not believe that adoption of SFAS No. 130 will have a material impact on the
Company's financial statements.
Disclosures About Segments of an Enterprise: In June 1997, the Financial
Accounting Standards Board also issued SFAS No. 131, Disclosures about Segments
of an Enterprise and Related Information, which establishes standards for the
way that public business enterprises report information about operating segments
in annual financial statements and requires that those enterprises report
selected information about operating segments in interim financial reports
issued to shareholders. This statement also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
This statement requires the reporting of financial and descriptive information
about an enterprise's reportable operating segments.
This statement is effective for financial statements for periods beginning after
December 15, 1997. In the initial year of application, comparative information
for earlier years is to be restated. The Company has not yet determined the
impact adoption of SFAS No. 131 will have on its financial statements.
5
<PAGE> 7
NOTE 5 - SUBSEQUENT EVENTS AND LIQUIDITY
Private Placement: On March 27, 1997, the Company issued a private placement
memorandum offering up to 2,500,000 shares of its common stock at a purchase
price of $1.00 per share. The Company has been using the proceeds of the
offering to pay certain then existing liabilities of the Company, to pay
operating expenses, to fund development and start-up costs, and for general
corporate purposes. The private placement closed on April 10, 1997, and the
Company received approximately $1,510,000 in proceeds.
REIT Financing: The Company entered into an agreement on April 30, 1997, with
Health Care REIT, Inc., a real estate investment trust (the "REIT"), for up to
$41,800,000 in operating lease financings for assisted living facilities. The
initial financing was completed on July 18, 1997, and involved the
sale-leaseback of four assisted living facilities owned by the Company for an
aggregate sale price of $2,700,000.
Going Concern: The Company has experienced recurring losses and at December 31,
1996 had limited resources. On April 10, 1997, the management of Community ("New
Management") took effective control of the Company. In addition to the events
described above, New Management plans to dispose of the property held for sale
at its carrying value, sell certain operating assets to an assisted-living
facility real estate investment trust and lease them back, and improve operating
results at facilities managed by the Company. Current projections and plans
indicate that the Company will have sufficient resources to continue as a going
concern.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONDITIONS AND RESULTS OF
OPERATIONS.
OVERVIEW
The historical financial statements represent the consolidated results
of operations and financial condition of Just Like Home, Inc. and its
subsidiaries (JLH or the Company). On April 10, 1997, Community Assisted
Living Centers, Inc. (Community) merged into a newly formed subsidiary of the
Company.
The following table sets forth the number of facilities owned or
managed and the total beds and occupancy as of the end of each of the periods
presented.
<TABLE>
<CAPTION>
December 31, September 30,
----------------------- -------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Facilities owned . . . . . . . . . . . . . . . . . . . . . 2 6 2
Facilities leased (1) . . . . . . . . . . . . . . . . . . . 0 0 4
Facilities managed . . . . . . . . . . . . . . . . . . . . 3 3 3
Total beds . . . . . . . . . . . . . . . . . . . . . . . . 100 184 184
Occupancy percentage at end of period . . . . . . . . . . . 97.0% 81.0% 75.0%
</TABLE>
- ------------------
(1) On July 18, 1997 the Company sold 4 facilities to Health Care REIT, Inc.
and simultaneously leased the properties back under a 10 year lease
agreement.
6
<PAGE> 8
REVENUES
Nine Months
Total revenues for the nine-month period ended September 30, 1997 increased by
44% from approximately $1,429,000 in 1996 to approximately $2,055,000 in 1997.
Resident fee income increased 60% from $818,000 in 1996 to $1,308,000 in 1997
due to the acquisition of Charis Place in March 1996 and two newly constructed
facilities completed in July and December of 1996. Consulting Fees decreased
from $384,000 in 1996 to $336,000 in 1997 due to the sale of Project Market
Decisions, Inc. (PMD) effective July 1, 1997. In addition, Just Like Family,
Inc., the Company's companion care service subsidiary, reflected revenues of
$18,000 during its start up phase in 1996 and posted revenues of $250,000 in
1997.
Three Months
Total revenues for the three-month period ended September 30, 1997 increased
slightly from approximately $567,000 in 1996 to approximately $577,000 in 1997.
This change was due primarily to the increased companion care revenues of
$78,000, additional assisted living facilities revenues of $114,000 and was
offset by the reduction of consulting revenues which were $144,000 in 1996 and
$0 in 1997. Other Income includes $76,000 of gain from the sale of Project
Market Decisions, Inc. in 1997.
EXPENSES
Nine Months
Total expenses for the nine-month period ended September 30, 1997 increased by
41%, from approximately $2,422,000 in 1996, to approximately $3,412,000 in
1997. Assisted living operating expenses increased from $544,000 in 1996 to
$1,040,000 in 1997 due to newly acquired and constructed facilities. Companion
care costs increased from $96,000 in 1996 to $308,000 in 1997 due to increased
volume and the start up of new geographic areas. General and administrative
expenses were up from $1,253,000 in 1996 to $1,350,000 in 1997. This increase
was caused by several factors, including bad debt allowances totaling $98,000
against receivables from the National Foundation on Gerontology and a
franchisee, and $95,000 additional costs involved with settlement of
outstanding contractual obligations.
Three Months
Total expenses for the three-month period ended September 30, 1997 increased by
37%, from approximately $962,000 in 1996 to approximately $1,314,000 in 1997.
Operational expenses of the assisted living facilities increased from $237,000
in 1996, to $420,000 in 1997 attributable primarily to acquired and newly
constructed facilities. Companion care expenses increased from $52,000 in 1996
to $115,000 in 1997 due to increased volume and the start up of new market
areas. General and administrative expenses were down from $482,000 in 1996 to
$436,000 in 1997.
INTEREST EXPENSE
Nine Months
Interest expense for the nine-month period ended September 30, 1997 increased
from approximately $208,000 in 1996 to approximately $319,000 in 1997 due to
the inclusion of the Charis Place, Inc. acquisition with its associated debt
and the opening of two additional facilities with their associated debt. Also,
the company incurred debt for working capital totaling $850,000 during late
1996.
Three Months
Interest expense for the nine-month period ended September 30, 1997 increased
from approximately $89,000 in 1996 to approximately $97,000 in 1997. The same
factors effecting the six-month Interest Expense combine to affect the second
quarter.
7
<PAGE> 9
LOSS BEFORE INCOME TAXES
As a result of the above, the Company incurred a loss before taxes of
approximately ($1,606,000) for the 1997 period as compared to a loss of
approximately ($1,137,000) for the 1996 period.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended September 30, 1997 the Company sustained a loss of
approximately $1,606,000. This resulted primarily from the Company not having
a sufficient number of facilities in operation to generate necessary income to
cover home office overhead costs and the carrying costs associated with
non-income producing properties. The Company's merger with Community resolved
the immediate short-term cash requirements of the Company. Additionally,
simultaneously with the closing of the merger, the Company closed a private
placement of 1,510,000 shares of its Common Stock at a purchase price of $1.00
per share, for an aggregate purchase price of $1,510,000. The Company also is
offering for sale two parcels of land that are not consistent with the
Company's current plans to focus on smaller facilities in more rural
communities. The Company is obligated to apply all of the net proceeds of
these sales to the reduction of certain indebtedness of the Company.
Therefore, these transactions, if completed, will not directly provide
additional working capital, but they should reduce the debt burden of the
Company and the corresponding interest expense. In addition, effective July
1, 1997 the Company sold the operations of its subsidiary, Project Market
Decisions. Management had determined that this consulting business did not
directly add to the renewed focus on development and operation of assisted
living facilities. The operations of this subsidiary were sold for $175,000
which consisted of cash of $125,000 and a note receivable of $50,000. The
note receivable bears interest at 8% and requires monthly interest payments and
quarterly principal payments and is due by July 1, 1999.
The Company entered into an agreement on April 30, 1997, with Health Care REIT,
Inc., a real estate investment trust (the "REIT"), for up to $41,800,000 of
financing for assisted living facilities. The initial financing was completed
on July 18, 1997, and involved the sale-leaseback of four assisted living
facilities owned by the Company for an aggregate sale price of $2,700,000.
Each phase of the REIT financing is subject to numerous conditions, including
satisfaction of certain financial coverage tests by the Company. The initial
REIT financing provided the Company with approximately $1,000,000 ($750,000
from REIT proceeds and the release of a $250,000 of certificate of deposit held
as collateral by the mortgage lender) in additional working capital after the
payment of certain long-term and short-term indebtedness related to the four
facilities sold to the REIT. Financing of a fifth existing facility for a
sale price of $1,300,000 is currently in process. This financing has been
delayed due to certain environmental contamination of groundwater caused by
conditions at an adjoining property. The Company believes, after consultation
with counsel, that it has no liability for the groundwater contamination or the
costs of remediation. The Company anticipates that the REIT sale-leaseback
financing of this facility will proceed as soon as the adjoining landowner,
with the assistance of the Company, obtains a commitment from the State funding
program for the necessary clean-up. The Company anticipates that an additional
$750,000 in working capital will be provided from the sale of this facility.
The ultimate financial success of the Company will depend largely upon its
ability to develop or acquire a sufficient number of assisted living facilities
to cover the operating expenses of these facilities and to cover the home
office expenses of the Company. To that end, the Company commenced
construction of a new 42-unit facility on August 4, 1997, and expects to
complete that facility in February 1998, on schedule and within budget
(approximately $2,100,000). The Company has acquired the sites and related
permits and approvals for three additional facilities (42-52 units each). The
Company anticipates that construction of these facilities will commence in
November, 1997 and January, 1998. The REIT has
8
<PAGE> 10
issued commitment letters for the financing of all three of these properties,
with closings scheduled for November 1997 for two of the new projects.
The remaining $30,700,000 of REIT funding will be available, subject to
continuing satisfaction of the various financial and other covenants in the
agreement, to fund approximately 15 assisted living facilities in the eastern
United States. The financing commitment expires on May 1, 2000.
As of September 30, 1997, the Company had working capital of approximately
$823,000. Operating losses are expected to continue to occur until additional
facilities are in operation. It is anticipated that existing working capital
and the sale-leaseback of an existing building will fund these losses. The
primary cash needs of the Company relate to start-up costs associated with
constructing and opening new facilities, projected operating losses for those
facilities until they reach a stabilized occupancy and certain corporate office
expense until all facilities are generating sufficient cash flow to cover those
expenses.
The rate at which the Company can develop these sites and future sites will be
directly affected by the continuing availability of the REIT financing and the
Company's ability to generate or raise the cash necessary to finance the
anticipated start-up costs associated with opening new facilities. Among the
financial covenants that must be satisfied by the Company prior to any future
construction financings with the REIT are requirements that the Company fund
cash reserves to cover customary start-up operating losses of the new facility,
obtain a letter of credit amounting to 5% of the development cost, and meet
certain financial covenants specified in the REIT lease agreement. If the
Company is unable to raise additional capital, it is unlikely to be able to
satisfy these conditions in the foreseeable future, and thus would be unable to
utilize the financing available from the REIT. Accordingly, the Company
anticipates that it will seek additional equity capital in the next six months
in a private placement transaction or from a strategic partner. There can be
no assurances that the Company will be able to complete an equity financing.
If the Company is unable to develop its various projects in a timely manner, it
will be required to modify or curtail its expansion plans, which would have a
material adverse effect on the Company's ability to continue its operations.
The Company's common stock is traded on NASDAQ and listed under the symbol
"JLHC".
FACTORS AFFECTING FORWARD-LOOKING STATEMENTS
This Form 10-QSB contains forward-looking statements that involve a number of
risks and uncertainties. Among the factors that could cause actual results to
differ materially from those indicated by the forward-looking statement are
the ability of the Company to raise additional equity capital to fund financing
and start up costs associated with opening new facilities, continued compliance
with the financial covenants in the REIT financing commitment described above,
the ability of the Company to attain and maintain high rates of occupancy in
its existing and planned facilities, and the Company's ability to control
expense levels at its existing and planned facilities, and the other risks
detailed in the Company's reports and registration statements filed with the
Securities and Exchange Commission.
9
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGE 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.
The following exhibit is filed with this Form 10-QSB:
10.1 Lease Agreement between Health Care REIT, Inc.
and JLH Series I, Inc. dated July 18, 1997.*
10.2 Merger Agreement dated February 14, 1997, among
the Company, JLH Acquisition Corporation and
Community Assisted Living Centers, Inc.*
27.1 Financial Data Schedule (for SEC use only).*
--------------------
* - Previously filed.
10
<PAGE> 12
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.
Date: April 24, 1998 Just Like Home, Inc.
(John F. Robenalt)
------------------------------
Chief Executive Officer
(Michael W. Monahan)
------------------------------
Chief Financial Officer (Principal
Accounting Officer and Principal
Financial Officer)
11
