FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For The Quarter Ended September 30, 2002
Commission File Number 000-31249
CRITICAL HOME CARE, INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0331369
(State or other jurisdiction of (I.R.S. Employer I.D. Number)
incorporation or organization)
762 SUMMA AVENUE
WESTBURY, NEW YORK 11590
(Address of principal executive offices) Zip code
Registrant's telephone no.: 516-997-1200
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 twelve 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
Title of Class Number of Shares
Common Stock Outstanding
(par value $0.25 per share) 23,725,000
Transitional Small Business Disclosure Format (Check one): Yes[ ] No[X]
CRITICAL HOME CARE, INC.
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 2002 (unaudited) and December 31, 2001...... 1
Consolidated Statements of Operations
Three Months Ended September 30, 2002
and September 30, 2001 (unaudited)........................ 2
Consolidated Statements of Operations
Nine Months ended September 30, 2002
and September 30, 2001 (unaudited)........................ 3
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2002
and September 30, 2001 (unaudited)........................ 4
Notes to the Consolidated Financial
Statements (unaudited)...................................... 5-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............... 7-9
Item 3. Controls and Procedures............................... 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .................................... 10
Item 2. Changes in Securities................................. 10
Item 3. Defaults Upon Senior Securities....................... 10
Item 4. Submission of Matters to a Vote of Security
Holders............................................... 10
Item 5. Other Information .................................... 10
Item 6. Exhibits and Reports on Form 8-K...................... 10
ITEM 1
CRITICAL HOME CARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30,
December 31,
2002
2001
------------
-----------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash..................................................................... $ 54,000 $ 19,000
Accounts receivable, net of allowance for
doubtful accounts of $274,000 and $56,000............................ 1,223,000 353,000
Inventory................................................................ 630,000 55,000
Prepaid expenses......................................................... 35,000 17,000
----------- ----------
TOTAL CURRENT ASSETS................................................. 1,942,000 444,000
PROPERTY AND EQUIPMENT - AT COST, NET....................................... 340,000 36,000
GOODWILL.................................................................... 2,989,000 -
SECURITY DEPOSITS........................................................... 35,000 -
OTHER INTANGIBLES........................................................... 100,000 -
----------- ------------
TOTAL ASSETS........................................................ $ 5,406,000 $ 480,000
===========
============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt....................................... $ 7,000 $ 7,000
Accounts payable........................................................ 461,000 106,000
Accrued expenses and other current liabilities.......................... 255,000 17,000
Due to affiliate........................................................ - 95,000
Loans payable - shareholder............................................................. - 97,000
Notes payable - All Care acquisition.................................... 325,000 -
Notes payable - other................................................... 651,000 -
--------- ---------
TOTAL CURRENT LIABILITIES........................................... 1,699,000 322,000
LONG-TERM DEBT, net of current portion..................................... 11,000 16,000
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $0.25 par value; 100,000,000 shares authorized; 23,725,000
shares and 16,250,000 pro-forma shares issued
and outstanding......................................................... 5,931,000 2,000
Retained (deficit) earnings............................................. (2,235,000) 140,000
---------- ---------
TOTAL SHAREHOLDERS' EQUITY......................................... 3,696,000 142,000
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY......................... $ 5,406,000 $ 480,000
=========== ===========
See accompanying notes to consolidated financial statements.
1
CRITICAL HOME CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
SEPTEMBER 30,
2002 2001
---- ----
NET SALES.............................................. $ 563,000 $ 294,000
COST OF GOODS SOLD..................................... 183,000 90,000
-------- ---------
GROSS PROFIT........................................... 380,000 204,000
OPERATING EXPENSES:
Selling, general and administrative................ 438,000 145,000
Depreciation....................................... 7,000 3,000
-------- ---------
TOTAL OPERATING EXPENSES......................... $ 445,000 $ 148,000
-------- ---------
(LOSS) INCOME FROM OPERATIONS.......................... (65,000) 56,000
--------- ----------
OTHER INCOME (EXPENSE):
Interest expense.................................... (2,000) -
Other income........................................ 96,000 -
---------- ----------
NET INCOME BEFORE PRO-FORMA PROVISION FOR INCOME TAXES.. 29,000 56,000
PRO-FORMA PROVISION FOR INCOME TAXES................... 11,000 22,000
---------- -----------
PRO-FORMA NET INCOME................................... $ 18,000 $ 34,000
========== ===========
BASIC AND DILUTED INCOME PER SHARE..................... $ 0.0011 $ 0.0021
====== ======
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING.......... 16,796,000 16,250,000
========== ==========
See accompanying notes to consolidated financial statements.
2
CRITICAL HOME CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
2002 2001
---- ----
NET SALES............................................... $ 1,193,000 $ 714,000
COST OF GOODS SOLD...................................... 379,000 218,000
--------- --------
GROSS PROFIT............................................ 814,000 496,000
OPERATING EXPENSES:
Selling, general and administrative................. 842,000
371,000
Depreciation........................................ 12,000 6,000
-------- -------
TOTAL OPERATING EXPENSES.......................... 854,000 377,000
-------- -------
(LOSS) INCOME FROM OPERATIONS........................... (40,000) 119,000
OTHER INCOME (EXPENSE):
Interest expense.................................... (2,000) -
Other income........................................ 96,000 24,000
-------- -------
NET INCOME BEFORE PRO-FORMA PROVISION FOR INCOME TAXES.. 54,000 143,000
PRO-FORMA PROVISION FOR INCOME TAXES.................... 21,000 57,000
-------- -------
PRO-FORMA NET INCOME..................................... $ 33,000 $ 86,000
========= =========
BASIC AND DILUTED INCOME PER SHARE...................... $ 0.0020 $ 0.0053
====== ======
WEIGHTED NUMBER OF SHARES OUTSTANDING................... 16,432,000 16,250,000
========== ==========
See accompanying notes to consolidated financial statements
3
CRITICAL HOME CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
-----------
2002 2001
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.......................................... $ 54,000 $ 143,000
Adjustments to reconcile net income to
cash used by operating activities:
Provision for bad debts........................ 45,000 48,000
Depreciation................................... 12,000 6,000
Changes in operating assets and liabilities Net of acquisition:
Accounts receivable............................. (183,000) (350,000)
Inventory....................................... (142,000) (48,000)
Prepaid expenses................................ (18,000) 15,000
Security deposits............................... (21,000) -
Accounts payable................................ 73,000 61,000
Accrued expenses and other current liabilities.. 161,000
12,000
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES.................. (19,000) (113,000)
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment.................. (110,000) (28,000)
---------- --------
NET CASH USED IN INVESTING ACTIVITIES.................. (110,000) (28,000)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
(Payment of) / Proceeds from long-term debt......... (5,000) 24,000
Payment of other intangibles............................ (50,000)
Increase in due to affiliate........................ - 70,000
Proceeds from notes payable......................... 601,000 60,000
Cash paid for acquisition................................ (252,000) -
Repayment of loans payable - shareholders............... (35,000) -
Repayment of advances from affiliate....................... (95,000) -
-------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES.............. 164,000 154,000
NET INCREASE IN CASH................................... 35,000 13,000
CASH, BEGINNING OF YEAR................................... 19,000 4,000
--------- ---------
CASH, END OF PERIOD....................................... $ 54,000 $ 17,000
============ ===========
Supplementary information:
Non cash investing and financing activities:
Shares issued for acquisition.......................... $ 3,500,000 $ -
============ ============
Cash paid during the year for:
Interest................................................ $ 1,000 $ -
============ ============
See accompanying notes to consolidated financial statements
4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial information included in this report has been
prepared in conformity with the accounting principles reflected in the
consolidated audited, unaudited and pro-forma financial statements included in
the Form 8-K report of September 26, 2002 filed with the Securities and Exchange
Commission. All adjustments are of a normal recurring nature and are, in the
opinion of management, necessary for a fair statement of the consolidated
results for the interim periods. This report should be read in conjunction with
the Company's financial statements included in the report on Form 8-K as filed
with the Securities and Exchange Commission.
The consolidated financial statements include the accounts of the Company
and its wholly-owned and majority-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
NOTE 2 - ACQUISITIONS
On August 8, 2002, Classic Healthcare Solutions, Inc. ("Classic"), a
wholly-owned subsidiary of the Company, acquired substantially all of the assets
of Homecare Alliance, Inc. ("Alliance") for a purchase price of $250,000 of
which $100,000 was in cash and $150,000 was in Notes. On September 13, 2002,
through another wholly-owned subsidiary, the Company acquired substantially all
of the assets of All Care Medical Products, Inc. ("All Care") for $200,000 in
cash, $450,000 in notes and 1,750,000 shares of the Company's common stock
valued at $2.00 per share. The revenues and costs of these two operations have
been included with those of the Company since their respective dates of
acquisition. The allocation of the purchase prices, including certain
acquisition costs of $25,000 and $130,000 respectively, was as follows:
Alliance All Care
--------- --------
Cash $ - $ 78,000
Accounts receivable - 732,000
Inventory 168,000 433,000
Fixed assets 107,000 206,000
Security deposits - 14,000
Goodwill - 2,989,000
Accounts payable - (157,000)
Loan payable to stockholder - (15,000)
----------- -------------
$ 275,000 $ 4,280,000
============= ==============
On September 26, 2002, New York Medical, Inc. (NYMI) and Critical Home
Care, Incorporated (Critical) consummated an acquisition agreement whereby NYMI
cancelled 8,975,000 of its 14,700,000 common shares then outstanding and issued
(a) 16,250,000 new shares of restricted common stock to Critical in exchange for
all of the issued and outstanding shares of Critical and, (b) 1,750,000 new
shares of restricted common stock to consummate the All Care Asset Purchase as
described above. This transaction resulted in a change in control of NYMI and a
total of 23,725,000 outstanding shares of common stock. In addition, NYMI
changed its name to Critical Home Care, Inc. The sole operating subsidiary of
Critical prior to the acquisitions described above was Classic which had been
acquired by Critical on July 12, 2002.
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
For accounting purposes, the transaction between NYMI and Critical is
considered, in substance, a capital transaction rather than a business
combination. The exchange has been accounted for as a reverse acquisition under
the purchase method of accounting since the former shareholders of Critical now
own a majority of the outstanding common stock of NYMI. Accordingly, the
combination of Critical with NYMI has been recorded as a recapitalization of
Critical, pursuant to which Critical has been treated as the continuing entity
for accounting purposes and the historical financial statements presented are
those of Critical. Such historical financial statements reflect the results of
operations of Classic which was a sub chapter S corporation through the date of
it's acquisition on July 12, 2002 and all tax effects have therefore been shown
on a pro-forma basis.
The acquisition of Alliance was not considered material for purposes of
including a pro forma condensed combined statement of operations in this Form
10-QSB, but the acquisition of All Care was. Therefore, the pro-forma condensed
statements of operations presented below represents what the results of
operations of the combined companies would have been had the All Care
acquisition taken place at the beginning of each fiscal period shown.
Nine Months Ended September 30,
2002 2001
---- ----
Sales $ 4,079,000 $ 3,652,000
Cost of sales 1,348,000 1,263,000
----------- -----------
Gross profit 2,731,000 2,389,000
Operating expenses 2,509,000 1,930,000
----------- -----------
Operating income 222,000 459,000
Other income 3,000 27,000
------------ -----------
Income before taxes $ 225,000 $ 486,000
============= ============
NOTE 3 - EMPLOYMENT AND CONSULTING CONTRACTS
In conjunction with the reverse merger and the All Care asset purchase, two
employment contracts and one consulting contract were entered into. David
Bensol, Chief Executive Officer of Critical, is employed pursuant to the terms
of a 3 year employment contract which provides for a minimum annual salary of
$150,000, certain performance bonuses and 100,000 stock options at an exercise
price of $1.00. Brad Smith, Executive Vice President of Critical, is employed
pursuant to the terms of a 3 year employment contract which provides for a
minimum annual salary of $125,000 and discretionary bonuses. Luigi Piccione, the
prior senior executive of All Care, is engaged pursuant to the terms of a 5 year
consulting contract which provides for an annual compensation of $150,000 and
reimbursement of reasonable business expenses. Mr. Piccione is also subject to a
non-compete agreement for a five year period for which he will be paid total
consideration of $100,000.
NOTE 4 - SUBSEQUENT EVENTS
On October 25, 2002, the Company consummated an initial closing of gross
proceeds of $550,000 pursuant to an ongoing private placement pursuant to Rule
506 of Regulation D under the Securities Act of 1933, as amended. The placement
is for up to a maximum of $2,000,000 of convertible promissory notes that are
due on December 31, 2002 and can be automatically converted into common shares
at the rate of one share for one dollar of notes at the discretion of the
Company. As of November 11, 2002, the Company elected to convert the $550,000
received into 550,000 common shares plus accrued interest of 2,168 common
shares.
On October 23, 2002, the Company and Health Care Business Credit Corp.
signed a term sheet covering an asset based credit facility of up to $
5,000,000. The finalization of an agreement is subject to a formal review of the
Company's financial condition, as well as its future revenue and income
prospects and certain other due diligence.
6
On October 30, 2002, the Company entered into a non-binding Letter of Intent
with Ocean Breeze Infusion Care of Farmingdale, Inc. ("Ocean Breeze") which is
beneficially owned by Staten Island University Hospital, Staten Island, NY,
which is affiliated with North Shore University Hospital in Manhasset, NY. The
proposed purchase price is $1,750,000 in cash and the assumption of up to
$190,000 in trade payables for substantially all of the assets and accounts of
Ocean Breeze. Closing of the transaction is subject to the preparation of a
definitive Asset Purchase Agreement, completion of due diligence and Board of
Directors and regulatory approval.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and Notes thereto appearing elsewhere in
this Form 10-QSB.
Statements contained in this report include "forward-looking statements"
within the meaning of such term in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
involve known and unknown risks, uncertainties and other factors, which could
cause actual financial or operating results, performances or achievements
expressed or implied by such forward- looking statements not to occur or be
realized. Such forward-looking statements generally are based on our best
estimates of future results, performances or achievements, predicated upon
current conditions and the most recent results of the companies involved and
their respective industries. Forward-looking statements may be identified by the
use of forward-looking terminology such as "may," "can," "will," "could,",
"should," "project," "expect," "plan," "predict," "believe," "estimate," "aim,"
"anticipate," "intend," "continue," "potential," "opportunity" or similar terms,
variations of those terms or the negative of those terms or other variations of
those terms or comparable words or expressions.
Readers are urged to carefully review and consider the various disclosures
made by us in this Quarterly Report on Form 10-QSB, our Current Report on Form
8-K filed on September 26, 2002 and our other filings with the U.S. Securities
and Exchange Commission. These reports and filings attempt to advise interested
parties of the risks and factors that may affect our business, financial
condition and results of operations and prospects. The forward-looking
statements made in this Form 10-QSB speak only as of the date hereof and we
disclaim any obligation to provide updates, revisions or amendments to any
forward-looking statements to reflect changes in our expectations or future
events.
7
Results of Operations
The Three Months Ended September 30, 2002 Compared to the Three Months Ended
September 30, 2001
Sales increased by $ 269,000, or 92%, in the third quarter of 2002 as
compared to the third quarter of 2001. Approximately $ 204,000 of this increase
is attributable to sales generated by the operations of All Care and of Alliance
which have been consolidated with those of the Company since their respective
dates of acquisition. The balance of $ 65,000 represents an increase in sales
generated by Classic.
Gross profit in the third quarter of 2002 was 67.5%, a slight decrease from
the 69.4% recorded in the comparable quarter of 2001. This decrease is
attributable to a different sales mix due to the addition of the sales of
Homecare Alliance and All Care.
Selling, general and administrative expenses totaled $438,000 for the three
months ended September 30, 2002 compared to $145,000 for the three months ended
September 30, 2001. The net increase of $293,000 primarily consists of
acquisition related costs of $75,000 incurred in the current year's third
quarter; approximately $141,000 of selling, general and administrative expenses
of the Alliance and All Care operations which have been consolidated with those
of the Company since their respective dates of acquisition and a $77,000
increase in the selling, general and administrative expenses of Classic. The
increase of $77,000 primarily consists of a $34,000 increase in officers'
salaries and related taxes from $6,000 in the 2001 third quarter to $40,000 in
the 2002 third quarter as the two officers of Classic did not take any
compensation in fiscal 2001 until September and an increase in other salaries
and related taxes of approximately $50,000 and slight net decreases in other
expenses.
The Nine Months Ended September 30, 2002 Compared to the Nine Months Ended
September 30, 2001
Sales increased by $ 479,000, or 67%, in the nine months ended September 30,
2002 as compared to the comparable 2001 period. Approximately $ 204,000 of this
increase is attributable to sales generated by the operations of All Care and
Homecare Alliance which have been consolidated with those of the Company since
their respective dates of acquisition. The balance of $ 275,000 represents an
increase in sales generated by Classic.
Gross profit in the nine month 2002 period was 68.2%, a slight decrease from
the 69.5% recorded in the prior year's comparable period. The decrease is
attributable to a different sales mix due to the addition of the sales of
Homecare Alliance and All Care.
Selling, general and administrative expenses totaled $842,000 in the 2002
nine month period, an increase of $471,000 over the $371,000 incurred in the
2001 comparable period. The net increase consists of acquisition related costs
of $96,000 incurred in the current years nine month period; approximately
$141,000 of selling, general & administrative expenses of the Alliance and All
Care operations which have been consolidated with those of the Company since
their respective dates of acquisition and an increase of $234,000 in the
selling, general & administrative expenses of Classic. The $234,000 increase
primarily consists of a $122,000 increase in officers' salaries and related
taxes from $6,000 in the 2001 nine month period to $128,000 in the 2002 nine
month period as the two officers of Classic did not take any compensation in
fiscal 2001 until September and an increase in other salaries and related taxes
of approximately $100,000.
Other income of $96,000 in the three and nine month periods of 2002
represents a management fee paid by All Care to Critical for managing the All
Care operations from July 1, 2002 up through the closing date of the asset
acquisition. Other income of $24,000 in the nine months ended September 30, 2001
consists of billing fees earned by Classic for processing healthcare billings of
an unrelated entity.
8
Liquidity and Capital Resources
The Company's primary needs for liquidity and capital resources are the
funding of operating and administrative expenses related to the management of
the Company and its subsidiaries which includes expenses incurred relative to
seeking merger and/or acquisition candidates.
During the nine months ended September 30, 2002, cash increased by $35,000.
The Company's cash of $54,000 and estimated funds that will be generated from
operations are not sufficient to both support current levels of operations for
the next twelve months, as well as to pay current liabilities when due. The
Company therefore, intends to raise capital in order to meet all of its
obligations. On October 26, 2002, the Company received gross proceeds of
$550,000 pursuant to an initial closing of a Private Placement of 8% Convertible
Promissory Notes which are due on December 31, 2002. The Company has the right
to elect to have the Noteholders convert the Notes into common shares of the
Company at the rate of one share for each dollar at any time through December
31, 2002 and on November 11, 2002 converted the $550,000 received into 550,000
common shares plus 2,168 common shares for accrued interest. The conversion
increased the total equity of the Company to approximately $4,246,000 as of that
date. The Private Placement is ongoing and subsequent to October 26, 2002
another $75,000 has been raised. In addition, he Company has signed a term sheet
with Health Care Business Credit Corp. and is negotiating an agreement with them
for an asset based credit facility of up to $5,000,000. Borrowings under the
credit facility will be securitized by the Company's accounts receivable and
inventory. Approval of any credit line is subject to a full review of the
Company's business operations and potential for growth as well as certain other
due diligence. The Company anticipates that the amount available upon approval
of the credit facility will be sufficient to pay all obligations as they become
due.
ITEM 3. CONTROLS AND PROCEDURES
An evaluation was performed, as of September 30, 2002, under the supervision
and with the participation of our President, who is also the Chief Executive
Officer, and our acting Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on such
evaluation, these persons have concluded that our disclosure controls and
procedures were effective as of September 30, 2002. There have been no
significant changes in our internal controls or in other factors that could
significantly affect our internal controls subsequent to September 30, 2002.
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Change in Securities.
On September 26, 2002, the Company (formerly known as New York Medical,
Inc. and Mojave Southern. Inc.) and Critical Home Care Inc. ("CHCI"), a Delaware
corporation, entered into an Agreement and Plan of Reorganization, whereby the
Company acquired all of the outstanding common stock shares of CHCI. Each issued
and outstanding share of CHCI was exchanged for one common stock share of the
Company. After the acquisition, the name of New York Medical Inc. was changed to
Critical Home Care, Inc. The Company's filing on Form 8-K, dated September 26,
2002, which further details this transaction, is hereby incorporated by
reference.
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
2.1 Asset Purchase Agreement, dated September 13, 2002, between All Care
Medical Products Corp. and Critical Home Care, Inc.
10.1 Employment Agreement, dated as of September 26, 2002, by and between
the Company and David S. Bensol.
10.2 Employment Agreement, dated as of September 26, 2002, by and between
the Company and Bradley Smith.
10.3 Consulting Agreement, dated as of June 28, 2002, by and between
Critical Home Care, Inc., All Care Medical Products Corp., and Luigi
Piccione.
99.1 Chief Executive Officer Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
99.2 Chief Financial Officer Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(b) Reports on Form 8-K.
Current Report, on Form 8-K, dated September 26, 2002 and filed on
September 26, 2002, which reports the change of control of the Company and the
acquisition of Critical Home Care, Inc., a Delaware corporation, is hereby
incorporated by reference, including exhibits attached thereto, into this Form
10-QSB for the quarter ended September 30, 2002.
SIGNATURES
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.
Dated: November 19, 2002 Critical Home Care, Inc.
/s/David S. Bensol
--------------------
David S. Bensol
President
/s/Ron Sarner
--------------------
Ron Sarner
Acting Chief Financial Officer
10
CERTIFICATION
I, David Bensol, Chief Executive Officer of Critical Home Care, Inc.,
certify that:
1. I have reviewed this Periodic Report on Form 10-QSB of Critical Home Care,
Inc.;
2. Based on my knowledge, this Periodic Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Periodic Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Periodic Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the period presented in this
Periodic Report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as such term is defined in paragraph (c) of this section) for
the registrant and have:
i. Designed such disclosure controls and
procedures to ensure that material information
relating to the registrant, including its
consolidated subsidiaries, is made known to them by
others within those entities, particularly during the
period in which the periodic reports are being
prepared;
ii. Evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
Periodic Report ("Evaluation Date"); and
iii. Presented in this Periodic Report my conclusions
about the effectiveness of the disclosure controls
and procedures based on my evaluation as of the
Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of the board of directors (or persons
fulfilling the equivalent function):
i. All significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
ii. Any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. I have indicated in this Periodic Report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Dated: November 19, 2002 /s/David Bensol,
-----------------------
David Bensol,
Chief Executive Officer
CERTIFICATION
I, Ron Sarner, Acting Chief Financial Officer of Critical Home Care,
Inc., certify that:
1. I have reviewed this Periodic Report on Form 10-QSB of Critical Home Care,
Inc.;
2. Based on my knowledge, this Periodic Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Periodic Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Periodic Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the period presented in this
Periodic Report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as such term is defined in paragraph (c) of this section) for
the registrant and have:
i. Designed such disclosure controls and
procedures to ensure that material information
relating to the registrant, including its
consolidated subsidiaries, is made known to them by
others within those entities, particularly during the
period in which the periodic reports are being
prepared;
ii. Evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
Periodic Report ("Evaluation Date"); and
iii. Presented in this Periodic Report my conclusions
about the effectiveness of the disclosure controls
and procedures based on my evaluation as of the
Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of the board of directors (or persons
fulfilling the equivalent function):
i. All significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
ii. Any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. I have indicated in this Periodic Report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Dated: November 19, 2002 /s/Ron Sarner
-----------------------
Ron Sarner
Acting Chief Financial Officer