SOURCE: BioBalance Corporation

August 18, 2005 12:10 ET

New York Health Care, Inc. Reports Financial Results for Second Quarter 2005

Company Also Engages Capital Growth Financial as Financial Services Advisor

NEW YORK, NY -- (MARKET WIRE) -- August 18, 2005 -- New York Health Care, Inc. (the "Company") and its wholly owned subsidiary, The BioBalance Corporation ("BioBalance"), announced today the Company's financial results for the second quarter ended June 30, 2005. The Company's common stock trades under the symbol (OTC: BBAL).

Revenues for the quarter, which were generated solely from the Company's home healthcare operations, increased to $10,914,000 from $10,574,000 in the same period in 2004, due to an increase in sales volume to some of the Company's existing home healthcare clients. Cost of professional care of patients in the first three months of 2005 increased to $9,011,000 from $8,726,000 for the same quarter last year. The increase in cost is directly attributable to the increase in patient services.

General and administrative expenses in the first quarter of 2005 declined to $1,940,000 from $2,557,000 in the same period in 2004, a decline of 24%. The decrease in G&A expense is the result of reduced administrative and overhead costs.

The net income of $1,603,000 in the second quarter of 2005 includes income of $2,714,000 from the gain on sale of the Company's assets relating to its home healthcare operations in the State of New Jersey in the second quarter of 2005, offset in part by a loss of $1,080,000 due primarily to the BioBalance segment, which to date has not generated any revenue. The Company's net loss for the comparable period in 2004 was $1,162,000. For the six month period ending June 30th, 2005, the Company achieved net income of $645,000 versus a loss of $2,390,000 in the same period of 2004.

The Company announced that it has engaged Capital Growth Financial ("CGF"), a diversified financial services firm located in New York City and Boca Raton, Fla., as investment banker for the Company and its wholly owned subsidiary BioBalance Corporation.

Dennis O'Donnell, CEO of NYHC and its BioBalance Corporation subsidiary, said, "We are pleased to have this relationship with Capital Growth Financial to assist us with the home healthcare transaction so that we can focus the Company on the pharmaceutical business of BioBalance."

Michael S. Jacobs, President, Capital Growth Financial, said, "Capital Growth Financial believes in building growth through long-term relationships. NYHC and its subsidiary BioBalance have a clear business strategy for achieving accelerated FDA approval for their lead product candidate, PROBACTRIX®, which potentially addresses multi-billion-dollar market opportunities. We are very pleased to help them obtain the financial support necessary to advance their endeavors and become a pure pharmaceutical play."

About New York Health Care, Inc. and The BioBalance Corporation

BioBalance, a development stage specialty pharmaceutical company, is focused on the development of patented biotherapeutic agents for gastrointestinal 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.

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. The Company's common stock trades under the symbol BBAL.PK. Additional information on BioBalance is located on the BioBalance website at www.biobalancecorp.com. Reports of the Company filed with the SEC are available on the SEC website at http://www.sec.gov.

About Capital Growth Financial

Capital Growth Financial, founded in 1995, is a diversified financial services firm which provides investment and merchant banking, retail and institutional brokerage and propriety research. Located in Boca Raton, Fla., the Company focuses on long-term relationships that lead to generating value for both investors and Management. The Capital Growth Financial principals have raised close to $500 million for a variety of financings, including IPOs, Private Placements and Merger and Acquisitions. For more information, please go to www.cgfsecurities.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 the Company's 2004 Annual Report on Form 10-K, as amended, 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.

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


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

                      For The Three Months Ended  For The Six Months Ended
                                June 30,                  June 30,
                            2005         2004         2005         2004
                        -----------  -----------  -----------  -----------

Net patient
 service revenue        $10,913,774  $10,574,419  $21,666,556  $20,500,303
                        -----------  -----------  -----------  -----------

Expenses:
  Professional care of
   patients               9,010,944    8,726,305   17,860,380   16,856,745
                        -----------  -----------  -----------  -----------
  General and
   administrative
   (excluding noncash
   compensation)          1,940,116    2,556,389    4,472,114    5,027,811
  Noncash compensation            -          364            -        4,054
                        -----------  -----------  -----------  -----------
    Total general and
     administrative
     expenses             1,940,116    2,556,753    4,472,114    5,031,865
                        -----------  -----------  -----------  -----------
  Product development
   (excluding noncash
   compensation)            553,757      271,779      747,168      699,363
  Noncash compensation      (24,914)    (174,566)       1,645     (344,870)
                        -----------  -----------  -----------  -----------
    Total product
     development            528,843       97,213      748,813      354,493
                        -----------  -----------  -----------  -----------

  Bad debts expense         248,704      120,400      283,704      240,400
  Depreciation and
   amortization             161,421      207,595      321,645      415,941
                        -----------  -----------  -----------  -----------

    Total operating
     expenses            11,890,028   11,708,266   23,686,656   22,899,444
                        -----------  -----------  -----------  -----------

Operating loss from
 continuing operations     (976,254)  (1,133,847)  (2,020,100)  (2,399,141)
                        -----------  -----------  -----------  -----------

Non-operating income
 (expenses):
  Interest income            15,761       14,664       51,391       26,971
  Interest expense           (1,178)      (5,827)      (3,259)     (10,111)
                        -----------  -----------  -----------  -----------
Non-operating income,
 net                         14,583        8,837       48,132       16,860
                        -----------  -----------  -----------  -----------

Loss from continuing
 operations before
 provision for income
 taxes                     (961,671)  (1,125,010)  (1,971,968)  (2,382,281)

Provision for income
 taxes Current              118,647       22,825      131,906       20,775
                        -----------  -----------  -----------  -----------

Loss from continuing
 operations              (1,080,318)  (1,147,835)  (2,103,874)  (2,403,056)
                        -----------  -----------  -----------  -----------

Discontinued operations:
  Income (loss) from
   operations of
   discontinued
   component (including
   gain on sale of
   assets of $2,703,718
   in 2005)               2,713,708      (12,236)   2,782,898       17,451

Income taxes                 30,549        2,000       34,452        4,050
                        -----------  -----------  -----------  -----------
  Income (loss) from
   discontinued
   operations             2,683,159      (14,236)   2,748,446       13,401
                        -----------  -----------  -----------  -----------
Net income (loss)       $ 1,602,841  $(1,162,071) $   644,572  $(2,389,655)
                        ===========  ===========  ===========  ===========

Basic and diluted
 income (loss) per
 share:
  Loss from continuing
   operations           $     (0.03) $     (0.05) $     (0.07) $     (0.10)

  Income (loss) from
   discontinued
   operations           $      0.08  $     (0.00) $      0.09  $      0.00
                        -----------  -----------  -----------  -----------

  Net income (loss)     $      0.05  $     (0.05) $      0.02  $     (0.10)
                        ===========  ===========  ===========  ===========

Weighted and diluted
 average shares
 outstanding             32,947,265   24,939,776   30,536,785   24,939,776
                        ===========  ===========  ===========  ===========

Contact Information

  • CONTACTS:
    Dennis O'Donnell CEO
    New York Health Care, Inc.
    Tel: (212) 679-7778
    Fax: (212) 679-7774
    Email Contact

    Stanley Wunderlich CEO
    Consulting For Strategic Growth
    Tel: (800) 625-2236
    Fax: (212) 337-8089
    Email: Email Contact