SOURCE: The BioBalance Corporation

April 19, 2005 13:35 ET

New York Health Care, Inc. Reports Financial Results for 2004

NEW YORK, NY -- (MARKET WIRE) -- April 19, 2005 -- New York Health Care, Inc. (the "Company" or "NYHC"), and its wholly owned subsidiary, The BioBalance Corporation ("BioBalance"), announced today the Company's financial results for the year ended December 31, 2004. The Company's common stock trades under the symbol (OTC: BBAL).

Revenues in 2004, which were generated solely from the Company's home health care operations, increased to $48,854,000 from $45,060,000 in 2003. The increase in revenue is due to an increase in sales volume to some of the Company's existing home health care clients. Cost of professional care of patients in 2004 increased to $39,214,000 from $36,107,000 in 2003. The increase in cost is due to the increase in sales.

Selling, general and administrative (SG&A) expenses in 2004 increased to $12,056,000 from $11,249,000 in 2003, an increase of 7 percent. The increase for the year 2004 over 2003 is the result of administrative personnel increases and other costs associated with the increased revenue. In addition, the Company incurred significant legal, accounting and insurance cost in 2004 relating to the indictment of one of its former directors.

The net loss of $6,071,685 for the year 2004 includes income of $351,000 from the operation of the home care segment and a loss of $6,423,000 from the BioBalance segment, which to date has not generated any revenue. The net loss from the BioBalance segment also includes an expense of $1,740,326 for the impairment write-down of the NexGen Platform technology that was purchased in 2003. BioBalance intends to pursue the NexGen Platform technology in the future, if funds and management time allow, although there can be no assurance that any commercially usable product will be derived from the NexGen Platform.

BioBalance, a development stage specialty pharmaceutical company, is focused on the development of patented biotherapeutic agents for gastrointestinal disorders with significant unmet needs. On January 2, 2003, New York Health Care and BioBalance completed a business combination accounted for as a "reverse acquisition," in which BioBalance became a wholly owned subsidiary of the Company. As a result, the historical financial information for the years ended December 31, 2004 and December 31, 2003, reported in NYHC's Form 10-K for 2004, is that of the Company while the data for December 31, 2002, is that of BioBalance, not reflecting the home healthcare segment. Prior reports of the Company filed with the SEC remain available on the SEC website at http://www.sec.gov.

Dennis O'Donnell, CEO of New York Health Care and BioBalance, said, "The year 2004 reflects a continuing turn-around for the Company. We are moving to refocus the Company exclusively on the business of BioBalance and away from the home health care business. In furtherance of this goal, earlier this month, we entered into an agreement to sell the New Jersey portion of the Company's home health care operations to Accredited Health Services, Inc., a subsidiary of National Home Health Care Corp., for $3 million."

About New York Health Care and The BioBalance Corporation

Acquired by New York Health Care in January 2003, The BioBalance Corporation operates as a wholly-owned subsidiary. The Company's common stock trades under the symbol BBAL.PK. BioBalance is a specialty pharmaceutical company focused on the development of novel treatments for various gastrointestinal (GI) disorders that are poorly addressed by current therapies via accelerated regulatory pathways. These disorders include pouchitis, Irritable Bowel Syndrome (IBS), inflammatory bowel disease and diarrhea caused by antibiotics, chemotherapy or AIDS. Additional information is located on the BioBalance website at www.biobalancecorp.com.

SAFE HARBOR STATEMENT follows:

In addition to historical information, certain of the statements in the preceding paragraphs, particularly those anticipating future events, financial performance, business prospects and growth and operating strategies constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as anticipate, believe, estimate, expect, intend, predict, hope or similar expressions. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements, including, without limitation, satisfaction of regulatory and other approvals and conditions necessary to market PROBACTRIX, the company's ability to implement its strategies and achieve its objectives and the risks and uncertainties described in reports filed by the company with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, including without limitation, the risk factors set forth and cautionary statements made in New York Health Care's 2004 Annual Report on Form 10-K, its latest quarterly report on Form 10-Q and current reports on Form 8-K.

Consulting For Strategic Growth I, Ltd. ("CFSG") provides The BioBalance Corporation with consulting, business advisory, investor relations, public relations and corporate development services, for which CFSG receives a fixed monthly fee for the duration of the agreement. Independent of CFSG's receipt of cash compensation from BioBalance, CFSG may choose to purchase the common stock of New York Health Care, Inc. and thereafter sell those shares at any time it deems appropriate to do so.

NEW YORK HEALTH CARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS


                                 Year Ended     Year Ended    Year Ended
                                December 31,   December 31,   December 31,
                                    2004           2003           2002
                                ------------   ------------   ------------
Net patient service revenue     $ 48,854,358   $ 45,060,449   $          -
                                ------------   ------------   ------------

Expenses:
 Professional care of patients    39,214,216     36,106,721              -
                                ------------   ------------   ------------
 General and administrative
  (excluding noncash
    compensation)                 12,052,255      9,941,923        810,427
 Noncash compensation                  4,127      1,307,119         19,414
                                ------------   ------------   ------------
   Total general and
    administrative expenses       12,056,382     11,249,042        829,841
                                ------------   ------------   ------------

 Product development
  (excluding noncash
    compensation)                  1,426,423        956,262        354,616
    Noncash compensation            (369,949)       284,340              -
                                ------------   ------------   ------------
     Total product development     1,056,474      1,240,602        354,616
                                ------------   ------------   ------------

 Goodwill impairment                       -     17,869,339              -
 Impairment of intangible
  assets                           1,740,326              -              -
 Bad debts expense                    90,400         50,250              -
 Depreciation and amortization       871,710        606,747        214,600
                                ------------   ------------   ------------

       Total operating expenses   55,029,508     67,122,701      1,399,057
                                ------------   ------------   ------------

Loss from operations              (6,175,150)   (22,062,252)    (1,399,057)

Non-operating income
 (expenses):
   Interest income                    69,877         51,255              -
   Interest expense                  (29,538)        (2,173)             -
                                ------------   ------------   ------------
Non-operating income
 (expenses), net                      40,339         49,082              -
                                ------------   ------------   ------------

Loss before (benefit) provision
 for income taxes                 (6,134,811)   (22,013,170)    (1,399,057)

(Benefit) provision for
 income taxes:
Current                              (63,126)        39,000              -
                                ------------   ------------   ------------

Net loss                        $ (6,071,685)  $(22,052,170)  $ (1,399,057)
                                ============   ============   ============

Basic and diluted loss per
 share                          $      (0.24)  $      (0.91)  $      (0.07)
                                ------------   ------------   ------------

Weighted and diluted average
 shares outstanding               24,939,776     24,283,907     20,562,131
                                ============   ============   ============

Contact Information

  • CONTACTS:
    Dennis O'Donnell
    New York Health Care, Inc.
    Tel: (212) 679-7778
    Fax: (212) 679-7774
    dodonnell@biobalancecorp.com

    Stanley Wunderlich
    Consulting For Strategic Growth
    Tel: (800) 625-2236
    Fax: (212)337-8089
    Email: cfsg1@aol.com