10-Q 1 a2038341z10-q.txt 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2000 COMMISSION FILE NUMBER 1-10875 NAHC, INC. (Exact name of registrant as specified in its charter) DELAWARE 13-3247827 (State of incorporation) (I.R.S. Employer Identification No.) 1018 W. NINTH AVENUE, KING OF PRUSSIA, PA 19406 (Address of principal executive office) (Zip code) Registrant's telephone number: (610) 992-7450 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 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 ------ ------ As of December 31, 2000, NAHC, Inc. had 63,343,263 shares of common stock, $.01 par value, outstanding. NAHC, INC. AND SUBSIDIARIES FORM 10-Q - QUARTER ENDED DECEMBER 31, 2000 INDEX

i NAHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2000 AND JUNE 30, 2000 (In thousands, except per share data) (Unaudited) (See Note 1)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements. 1 NAHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) (See Note 1)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements. 2 NAHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) (See Note 1)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements. 3 NAHC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, except per share data) (Unaudited) (See Note 1)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements. 4 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) 1. BASIS OF PRESENTATION NAHC, Inc., formerly NovaCare, Inc. ("NAHC" or the "Company"), previously operated in three business segments: long-term care services, outpatient services and employee services. Long-term care services ("LTCS") consisted of providing rehabilitation and healthcare consulting services on a contract basis to health care institutions, primarily long-term care facilities. This segment was disposed of on June 1, 1999. Outpatient services consisted of providing orthotic and prosthetic ("O&P") and physical rehabilitation and occupational health ("PROH") rehabilitation services through a national network of patient care centers. The O&P and PROH businesses were sold on July 1, 1999 and November 19, 1999, respectively. Employee services were comprehensive, fully integrated outsourcing solutions to human resource issues, including payroll management, workers' compensation, risk management, benefits administration, unemployment services and human resource consulting services, and were generally provided to small and medium-sized businesses. This segment was disposed of on October 19, 1999. The Company has disposed of all of its operating segments. The Company's remaining activities consist of managing the legal proceedings against the Company, attempting to realize its assets, general administrative matters and the preparation for potential liquidation or investment. Accordingly, the accompanying consolidated financial statements reflect all of the Company's results of operations and cash flows as discontinued operations, except for its remaining general and administrative activities which are treated as continuing operations. Management believes that the information in this Form 10-Q should be read in conjunction with the information in the Company's Annual Report on Form 10-K for the year ended June 30, 2000 and Quarterly Report on Form 10-Q for the period ended September 30, 2000, each of which is on file with the Securities and Exchange Commission. These statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and should be read in conjunction with the Company's consolidated financial statements and the notes thereto for the year ended June 30, 2000. 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. In the opinion of Company management, the condensed consolidated financial statements for the unaudited interim periods include all adjustments necessary for a fair statement of the results for such interim periods. 2. RISKS AND UNCERTAINTIES AFFECTING THE COMPANY'S ABILITY TO CONTINUE AS A GOING CONCERN The Company has disposed of all its operating segments. The Company's remaining activities consist of managing the legal proceedings against the Company, attempting to realize its assets, general administrative matters and the preparation for potential liquidation or investment. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The environment confronting the Company raises very substantial doubt about the Company's ability to continue as a going concern. The principal conditions giving rise to that uncertainty include the following: FINANCIAL RESTRUCTURING. Pursuant to a Plan of Restructuring (the "Plan") adopted by the Company's stockholders at a Special Meeting of Stockholders held on September 21, 1999, as amended on September 27, 2000, the Board of Directors has the authority to commence a liquidation of the Company if suitable reinvestment opportunities are not identified by the Company by June 30, 2001 (the "Liquidation Date"). The Plan also affords the Board the discretion to adjust the Liquidation Date to a date earlier or later than June 30, 2001 if it determines such action to be appropriate. In evaluating whether to reinvest the Company's remaining assets or to liquidate the Company, a critical factor for the Board to consider is the value of the Company's remaining assets after satisfaction of all actual and contingent liabilities. Because the vast majority of the Company's remaining assets consists of delinquent or disputed accounts receivable that are in litigation proceedings and the Company's 5 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) remaining liabilities include, among others, contingent liabilities that have arisen (and may arise) from pending legal actions against the Company or for which the Company is responsible, the Company is unable to determine the value of net assets, if any, that may be available for a potential reinvestment until these legal proceedings are settled or concluded. During the period prior to the Liquidation Date, the Company will continue its efforts to realize its remaining assets and to resolve its outstanding liabilities. There are a number of significant risks associated with the Company's implementation of the Plan. Because of the factors cited above, the Company's estimate of possible net assets available for distribution or investment is extremely uncertain. Furthermore, due to the uncertainty of the amount and timing with regard to cash flows, there can be no assurance that the Company will have sufficient cash flow to satisfy obligations when they become due. Under those circumstances, the Company may seek short-term financing, attempt to negotiate lower settlement amounts with regard to its obligations or seek protection under the bankruptcy laws. Furthermore, even if the Company has sufficient net assets to pursue a business acquisition or combination in accordance with the Plan, there can be no assurance that the Company will be able to identify an opportunity on commercially acceptable terms or that the Company could successfully operate any business that may ultimately be acquired. THE AMOUNT OF NET ASSETS, IF ANY, AVAILABLE FOR INVESTMENT OR DISTRIBUTION IN LIQUIDATION IS EXTREMELY UNCERTAIN. Since the Company first made estimates of its liquidation value in its proxy statement dated August 13, 1999, management has from time to time materially lowered those estimates, and there can be no assurance that such estimates, including those estimates contained in this report on Form 10-Q, will not be materially lowered in the future. The range of the estimate per share of Common Stock reflects the inherent uncertainty of the Company's liquidation value. This uncertainty is due, in general, to the nature of the Company's assets and its contingent liabilities. The vast majority of the Company's assets consist of delinquent or disputed accounts receivable which the Company is attempting to collect through litigation. Counterclaims have been filed against the Company in many of these actions. The results of these collection actions are inherently uncertain. THE OUTCOME OF CLAIMS, SUITS AND COMPLAINTS COULD HAVE AN ADVERSE EFFECT ON THE COMPANY'S BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND LIQUIDITY. As discussed in Note 7, the Company is party to a number of claims, suits and complaints which have arisen in the ordinary course of business and in the course of selling its operating businesses. Furthermore, the Company is a defendant in multiple litigation matters. The outcome of these matters is not possible to predict. If the Company suffers an adverse ruling or judgment in any of these cases, the Company will likely be forced to seek bankruptcy law protection. EXTREMELY UNCERTAIN CASH FLOW; SUBSTANTIAL RISK OF BANKRUPTCY. The Company's cash flow is extremely uncertain. The Company's cash position will vary based on the timing and amount of cash inflows and outflows. Cash inflows primarily consist of collections of LTCS related receivables and Medicare-related receivables both of which are either in litigation or arbitration. Cash outflows are principally related to legal proceedings and claims against the Company and general and administrative expenses. The outcome of litigation and arbitration proceedings is extremely uncertain. Due to the uncertainty of the amount and timing with regard to cash flows, there can be no assurance that the Company will have sufficient cash flow in the future to satisfy obligations when they become due. Under those circumstances, the Company may seek short-term financing, negotiate lower settlement amounts with regard to its obligations or seek protection under the bankruptcy laws. If the Company's liabilities exceed its assets or the Company is unable to pay its liabilities as they become due, the Company will be forced to seek protection under bankruptcy laws. The Company would most likely be liquidated under this circumstance, with the shareholders of the Company receiving no proceeds in such liquidation. 6 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) EXTENSION OF LIQUIDATION DATE MAY INCREASE EXPENSES AND FURTHER REDUCE LIQUIDATION VALUE. The Plan of Restructuring approved by the Company's stockholders gave the Board of Directors discretion to extend the Company's search for possible acquisition candidates or other investment opportunities, and thus delay the Liquidation Date from December 31, 2000. The Board has chosen to exercise this discretion, and it is now expected that the Company's liquidation will not occur until approximately June 2001. The decision to extend the Liquidation Date could result in the further depletion of proceeds available to stockholders should the Board later decide to proceed with the liquidation of the Company. THE COMPANY IS LOSING MONEY AND MAY NOT EVER BE PROFITABLE. The Company incurred substantial net losses in each of the previous two fiscal years. In addition, the Company currently has no operations and thus there can be no assurance that it will ever be profitable. The Company's ability to become profitable depends on (1) there being sufficient net assets to invest and (2) management's ability to find a suitable business opportunity in which to invest. There can be no assurance that there will be any, or sufficient, assets to invest or that management will identify such an investment opportunity, or if identified, that the Company will be able to reach an agreement and complete such an investment. Furthermore, there can be no assurance that any investment made by the Company will be profitable. THE CURRENT MANAGEMENT TEAM HAS ONLY LIMITED KNOWLEDGE OF THE COMPANY'S OPERATING HISTORY. The financial constraints under which the Company is operating have made it difficult to retain management personnel, virtually all of which have left during the past year. This high rate of management attrition, and the resultant loss of institutional knowledge, makes it significantly more difficult to both defend claims being made against the Company and assert claims on its behalf. 7 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) 3. DISCONTINUED OPERATIONS During fiscal 1999, the Company sold its LTCS business to Chance Murphy, Inc. ("Chance Murphy"). In fiscal 2000, the Company sold its remaining operating businesses: the O&P business was sold on July 1, 1999, the Company's interest in NCES was sold on October 19, 1999 and the PROH business was sold on November 19, 1999. In conjunction with the sale of LTCS, the Company provided a working capital guarantee of $30,000 and Chance Murphy agreed to pay to the Company the amount, if any, of working capital as of June 1, 1999 in excess of $30,000 or to transfer to the Company any remaining accounts receivable relating to periods prior to June 1, 1999 once the working capital guarantee had been satisfied. On November 11, 1999, the Company was released from the commitment under the guarantee and the remaining accounts receivable reverted back to the Company. These receivables, in addition to the remaining accounts receivable of the LTCS Western operations which were closed in fiscal 1999, are included in the net liabilities remaining from discontinued operations. In conjunction with the November 11, 1999 release, the Company and Chance Murphy established an escrow account in support of indemnifications made by the Company relating to potential cost report settlements with Medicare, Medicaid and other third-party payers for the Company's services provided prior to selling the business to Chance Murphy. The escrow account was funded by Chance Murphy, up to a maximum of $3,000, from cash collections of receivables due directly from these payers. Pursuant to the agreement, the funds will remain in escrow until such time that the Company and Chance Murphy determine that all indemnification obligations and any related third-party claims have been resolved. The escrow agreement expires 30 days after the end of the period of limitations for which the filed cost reports may be subject to audit. At that time, or prior to that time, at the mutual agreement of Chance Murphy and the Company, any funds in excess of outstanding claims will be released to the Company. At December 31, 2000, the Company had $1,533 in escrow, net of reserves. Results of operations for all of the Company's discontinued operations (consisting of the outpatient services, employee services and long-term care services operating segments) were as follows for the three and six months ended December 31, 2000 and 1999.

The income tax provision for the three months ended December 31, 1999 results from state income taxes that cannot be offset by loss carryforwards. The income tax benefit for the six months ended December 31, 1999 results from the reversal of accrued income tax liabilities in conjunction with the sales of the company's operating businesses, net of state income taxes provided. The $526 gain on disposal of discontinued operations in the accompanying statement of operations for the three months ended December 31, 2000, primarily relates to changes in estimates relating to the settlement of certain legal claims and the settlements of third-party cost reports, and an additional amount provided in respect of legal costs related to outstanding litigation during the three months ended December 31, 2000. 8 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) Net (liabilities remaining from) assets of discontinued operations consist of the following:

At December 31, 2000, the accounts receivable and Medicare indemnification receivables are net of reserves amounting to $12,130 and $14,395, respectively. It is reasonably possible that established reserves may need to be adjusted based on the resolution of one or more future events for which the eventual outcome is uncertain at this time. Approximately $6,372 of the long-term care services accounts receivable, net of reserves of $3,948, have been converted into notes receivable and are included in other assets above. These notes are expected to be repaid over the next two years. Approximately 58% of the $2,141 of accounts receivable is due from 2 customers. The Company does not have any collateral with respect to the outstanding accounts receivable and Medicare indemnification receivables. Net (liabilities remaining from) assets of discontinued operations by segment consists of the following:

4. PROVISION FOR RESTRUCTURE In the fourth quarter of fiscal 1999, the Company recorded a provision for restructure of $12,260 related to a program to reduce its selling, general and administrative costs incurred at its corporate headquarters. The program involved the termination of 74 employees of which all affected employees have been terminated as of September 30, 2000. This provision consisted of the following: Employee severance and related costs........................ $ 3,060 Lease and technology agreement mitigation................... 8,515 Write-down of property and equipment........................ 685 ---------------- Total....................................................... $ 12,260 ================

9 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) In the first quarter of fiscal 2000, the Company reversed $1,987 of this provision based on the current costs expected to complete this program. The reversal is the net amount of additional severance and related costs of $2,400 and reduction of lease and technology agreement mitigation of $4,387. Activity in the accrued liability for this provision consisted of the following:

The Company expects that all of these remaining costs, primarily benefits for terminated employees, will be expended by June 30, 2001. 5. NET (LOSS) INCOME PER SHARE The following table sets forth the computation and reconciliation of net loss per share-basic and assuming dilution:

10 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) The Company did not include the common stock equivalents of a $60 convertible subordinated note because its effects are antidilutive in all periods. There were no transactions subsequent to December 31, 2000 that would have materially changed the number of shares used in computing loss from continuing operations per share - basic and assuming dilution. 6. NOTE PAYABLE On September 27, 2000, the Company issued a 10% convertible subordinated note to the Chief Executive Officer in the amount of $60. The note bears interest at a rate of 10% per annum and is payable on the earlier of demand by the officer for payment or May 1, 2006. The note is convertible into the Company's common stock and has a conversion price that ranges from $0.04, the current conversion price, to a potential $0.0025 per share. In the event that the Company's board acts to file liquidation papers, the note (and all accrued interest) shall be convertible into the Company's common stock at a conversion price of $0.0025 per share. 7. COMMITMENTS AND CONTINGENCIES The Company is subject to legal proceedings and claims which have arisen in the course of its business. Also, in conjunction with the sales of its businesses, the Company has indemnified the purchasers for certain obligations. Described below are certain claims, suits or complaints which, in the opinion of management, would have a material adverse effect on the Company's business, financial condition, results of operations and liquidity. Collectively, the damages sought to be recovered from the Company in these cases are in the hundreds of millions of dollars. BRADY V. NAHC, INC., ET AL., in the United States District Court for the Eastern District of Pennsylvania. This is a purported class action case filed on behalf of all persons who purchased the common stock of NAHC during the period between April 5, 1999 through and including November 22, 1999. Five similar actions have been filed in the Eastern District of Pennsylvania, including one that alleges a class period from May 20, 1998 through November 22, 1999. The Company expects that all similar cases will be consolidated into a single action. PricewaterhouseCoopers LLP is named as a defendant in one of the cases. The case is subject to the provisions of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). After the lead plaintiff and lead counsel are appointed by the Court, Defendants expect to file a motion to dismiss. Under the PSLRA, discovery is stayed until the motion to dismiss is resolved. The Plaintiffs asserted that the Company and certain of its directors and officers violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 by making false and misleading statements and omissions regarding the prospects of NAHC's business and NAHC's liquidation value and by failing timely to disclose the impact of the Balanced Budget Act of 1997 on the long term care services business. The Plaintiffs allege that these statements and omissions artificially inflated the value of the Company's stock during the class period. The Plaintiffs also assert a violation of Section 14(a) of the Exchange Act and Rule 14a-9 against the Company and individual Defendants as well as against Wasserstein Perella & Co. in connection with the Company's proxy statements dated August 13, 1999, as amended through September 10, 1999. The Plaintiffs allege that the Defendants were negligent in disseminating the proxy statements, which allegedly contained materially false and misleading statements. Wasserstein Perella & Co. has notified the Company that it will seek indemnification from the Company in connection with this action, pursuant to its engagement agreement with the Company. The Defendants intend to vigorously defend the action. Because of the early stage of this litigation, the Company is conducting an assessment of the merits of this case. The Company has notified its insurance carriers of this action. If the Defendants suffer an adverse judgment which the Company is required to pay, it will likely result in there being no assets for investment or liquidation; in such event, the Company will file for bankruptcy law protection. 11 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) UNITED STATES OF AMERICA, EX REL., SAUL EPSTEIN V. NOVACARE, INC., ET AL., Civil Action No. 98-CV-4185. This QUI TAM action was filed on or about August 10, 1998 by Saul R. Epstein on behalf of the United States Government, in camera and under seal in the United States District Court for the Eastern District of Pennsylvania, asserting claims against the Company for violations of the False Claims Act. On October 12, 1999, the United States Attorney for the Eastern District of Pennsylvania elected not to intervene in the matter and not to prosecute the complaint on behalf of the United States. On October 21, 1999 the complaint was unsealed. On November 26, 1999 an amended complaint was filed and subsequently served on the Company. The amended complaint alleges that the Company submitted false or fraudulent bills in connection with the provision of physical therapy to individuals covered by various health insurance programs that were provided to certain employees of the United States Government. The complaint seeks to recover, on behalf of the federal government, treble damages for each violation of the False Claims Act and a civil penalty of $5 to $10 for each violation, plus attorneys' fees, experts' fees and costs of the suit. This matter currently is in discovery. The relator plaintiff recently made a motion to the court to add as defendants Select Medical Corporation ("Select") and certain of the subsidiary corporations acquired by Select from the Company as part of the PROH transaction. That motion is before the court. Pursuant to the purchase and sale agreement for the sale of the Company's PROH division to Select, the Company has indemnified Select and the PROH subsidiaries acquired by Select for any damages that any of those entities sustain arising from this action relating to conduct prior to the sale to Select. The Company may not have sufficient assets to try this case should it proceed to trial. In the event that the plaintiff obtains an adverse judgment, there will be no assets for investment or liquidation and the Company will file for bankruptcy law protection. SABOLICH, INC., SABOLICH PROSTHETICS CENTER OF WICHITA, INC., SABOLICH TRI-STATE PROSTHETICS, INC., SABOLICH OF FLORIDA, INC. AND JOHN A. SABOLICH V. NOVACARE, INC. AND NOVACARE ORTHOTICS AND PROSTHETICS EAST, INC. This action was filed on May 18, 1999 in the United States District Court for the Western District of Oklahoma, Case No. CIV-99-670-T. The complaint alleges that the defendants breached a 1994 Agreement of Purchase and Sale involving the acquisition of the plaintiffs' orthotics and prosthetics business. Plaintiffs allege that the defendants breached the agreement by failing to pay certain sums allegedly due them under the agreement. Plaintiffs also allege that defendants tortiously breached an alleged implied covenant of good faith and fair dealing in the agreement. Plaintiffs have claimed $5,000 of compensatory damages and $5,000 for punitive damages. As part of the Company's Stock Purchase Agreement, dated as of April 2, 1999 and amended May 19, 1999 and June 30, 1999, with Hanger Orthopedic Group, Inc. ("Hanger") for the sale of the Company's orthotics and prosthetics business, the Company and Hanger agreed that each entity would be responsible for 50% of any damages arising from this action, including all costs and expenses associated with the matter. This matter currently is in discovery. In the event that the plaintiff obtains an adverse judgment, there may be no assets for investment or liquidation and the Company may file for bankruptcy law protection. HEALTHSOUTH CORPORATION V. NOVACARE, INC. AND NC RESOURCES, INC., Montgomery County Court of Common Pleas, No. 99-17155 (filed September 28, 1999). The complaint in this action alleges that, pursuant to a February 3, 1995 stock purchase agreement involving the sale of the Company's medical rehabilitation hospital subsidiary Rehab Systems Company ("RSC") to Healthsouth Corporation ("Healthsouth"), the Company agreed to reimburse Healthsouth for any payments that Healthsouth was obligated to pay Medicare, Medicaid or other cost-based reimbursement systems as a result of RSC's indebtedness to such payors. The complaint seeks damages in the amount of $12,600. Initial pleadings in this matter have been completed and it is expected that the parties will proceed to discovery in the near future. In the event that the plaintiff obtains an adverse judgment, there will be no assets for investment or liquidation and the Company will file for bankruptcy law protection. CONTINENTAL ORTHOPEDIC APPLIANCES, INC. V. HEALTH INSURANCE PLAN OF GREATER NEW YORK, ET AL., 95 Civ. 4041 (ADS). The complaint in this action was filed in the United States District Court for the Eastern District of New York as a class action, alleging that the Company's former orthotics and prosthetics subsidiary, together with the Health Insurance Plan of Greater New York and others, participated in a conspiracy to violate federal and state antitrust laws prior to the Company's acquisition of such subsidiary. The complaint seeks to recover monetary damages in excess of $500, together with costs and attorneys fees, and punitive damages. Discovery in this case 12 NAHC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 (In thousands, except per share data) (Unaudited) has ended. The case has not been certified as a class action. Pursuant to the purchase and sale agreements under which the Company acquired and later sold the former subsidiaries that are involved in this action, the Company is responsible for defending this action. This case is currently in the process of being settled, although settlement has not been finalized. In addition to the foregoing legal proceedings, the Company is a defendant in a number of other legal actions seeking monetary damages, which singularly and in the aggregate may have a material adverse effect on the Company's business, financial condition, results of operations and liquidity if such actions are adversely concluded. Also, in connection with many of the collection actions brought by the Company against third parties to collect outstanding accounts receivable, counterclaims have been made against the Company, which, in many cases, exceed the amount sought by the Company in the underlying actions. In the event that any of the material actions are concluded in a manner that is adverse to the Company, there will be no assets for investment or liquidation and the Company would likely file for bankruptcy law protection. During the three months ended December 31, 2000, the Company settled three claims that were in litigation or arbitration; COMPLETE CARE V. NOVACARE, U.S. EX. REL. GUBLO V. NOVACARE, and an action brought by a former employee. 13 NAHC, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW NAHC, Inc. ("NAHC" or the "Company"), formed in 1985, was a national leader in physical rehabilitation services and employee services prior to the sale of all of its operating segments. In order to satisfy its indebtedness, the Company sold each of its operating segments in a series of divestiture transactions commencing June 1, 1999 and ending on November 19, 1999. As a result of the completion of these transactions, the Company currently has no operating business. NAHC is a company in transition, attempting to manage its liabilities and realize its remaining assets. Any investment in the Company should be considered extremely speculative and risky. The Company's current estimate of net proceeds available for distribution per share upon liquidation of the Company is between ($0.31) (negative 31 cents) and $0.0057. See "Liquidity and Capital Resources - Liquidation Analysis and Estimates." There is a substantial risk that the Company will be forced to seek bankruptcy law protection. On July 1, 1999, the Company completed the sale of its orthotic and prosthetic ("O&P") business to Hanger Orthopedic Group, Inc. ("Hanger"). On September 21, 1999, the stockholders of the Company approved three proposals submitted as part of a Special Meeting of Stockholders. The first proposal recommended the sale of the Company's Physical Rehabilitation and Occupational Health ("PROH") division, the second proposal recommended the sale of the Company's 64% interest in NovaCare Employee Services, Inc. ("NCES") and the third proposal recommended the adoption of a plan to restructure the Company. Under the third proposal, a Plan of Restructuring was adopted whereby if, by the designated liquidation date, currently June 30, 2001, the Company is unable to find suitable acquisition candidates to reinvest any remaining net assets, it will liquidate, unless the Board of Directors, in its discretion, determines otherwise. On October 19, 1999, the Company completed the sale of its 64% interest in NCES to a subsidiary of Plato Holdings, Inc. as part of a tender offer by Plato for all of NCES's outstanding shares. On November 19, 1999, the Company completed the sale of the PROH business to Select Medical Corporation. In conjunction with the PROH sale, the "NovaCare" name was also sold and the Company changed its name to NAHC, Inc. effective March 28, 2000. The Company's former long-term care services segment was disposed in fiscal 1999 with the closing of certain of its operations in the Western United States during the third fiscal quarter and the sale of the remaining operations on June 1, 1999. The Company's former employee services segment was disposed through the Company's sale of its interest in NCES. The Company's former outpatient services segment was disposed through the sales of O&P and PROH. As a result of these transactions, the Company has disposed of all of its operating segments. The Company's remaining activities consist of managing the litigation against the Company, attempting to realize its remaining assets, general administrative matters and the preparation for potential liquidation or investment. Accordingly, the Company has reflected substantially all of its results of operations and cash flows, for the current and all prior periods as discontinued operations except for its remaining general and administrative activities which are treated as continuing operations. 14 NAHC, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2000 VS. DECEMBER 31, 1999 CONTINUING OPERATIONS The loss before income taxes from continuing operations was $1.0 million for the three months ended December 31, 2000 compared to $8.7 million for the same period last year, reflecting the wind-down of the Company's administrative functions as a result of the sale of its businesses. The primary reasons for the decrease in the loss were (i) a decrease in selling, general and administrative costs of approximately $7.5 million, principally as a result of the reduction of the Company's employee base and (ii) interest expense decreased by approximately $2.1 million as a result of the payment of the Company's line of credit and convertible debentures. There is no provision for or benefit from income taxes for the three months ended December 31, 2000 as the Company could not utilize, for income tax purposes, the loss incurred in the period. The Company has net operating loss carryforwards ("NOLs") the range of which it is currently evaluating. The ultimate amount of the NOLs is dependent on future actions. The Company will not recognize an income statement benefit for any previously incurred or future operating losses or future tax deductions until such time as management believes it is more likely than not that the Company's future operations will generate sufficient taxable income to be able to realize such benefits. Accordingly, the Company has provided a full valuation allowance against the entire net deferred tax asset at December 31, 2000. For the same period last year, the Company recognized no tax benefit. DISCONTINUED OPERATIONS There was no loss from discontinued operations for the three months ended December 31, 2000 because all the Company's businesses were sold prior to December 31, 1999. The income from discontinued operations, net of tax, for the three months ended December 31, 1999 was $0.5 million. During the three months ended December 31, 2000, the Company recorded a gain on disposal of discontinued operations of $0.6 million primarily as a result of the receipt of 401(k) forfeitures and medicare claims, partially offset by an additional accrual for legal expenses. RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 2000 VS. DECEMBER 31, 1999 CONTINUING OPERATIONS The loss before income taxes from continuing operations was $2.9 million for the six months ended December 31, 2000 compared to $23.0 million for the same period last year, which reflects the wind-down of the Company's administrative functions as a result of the sale of its businesses. The primary reasons for the decrease in the losses were (i) a decrease in selling, general and administrative costs of approximately $19.1 million, principally as a result of the reduction of the Company's employee base and (ii) interest expense decreased by approximately $6.6 million as a result of the payment of the Company's line of credit and convertible debentures. There is no provision for or benefit from income taxes for the six months ended December 31, 2000, as the Company could not utilize, for income tax purposes, the loss incurred in the period. For the same period last year, the Company recognized no tax benefit. DISCONTINUED OPERATIONS There was no loss from discontinued operations for the six months ended December 31, 2000 because all the Company's businesses were sold prior to December 31, 1999. The income from discontinued operations, net of tax, for the six months ended December 31, 1999 was $11.9 million, due primarily to the results of the PROH and NCES business and the reversal of accrued income tax liabilities in conjunction with the sales of the Company's operating businesses. During the six months ended December 31, 2000, the Company recorded a gain on disposal of 15 NAHC, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) discontinued operations of $2.2 million, primarily as a result of settlements of certain legal claims, 401(k) forfeitures and medicare claims, partially offset by an additional accrual for legal expenses. LIQUIDITY AND CAPITAL RESOURCES CASH FLOWS At December 31, 2000, cash and cash equivalents totaled $4.3 million compared to $10.0 million at June 30, 2000. The net decrease in cash and cash equivalents from June 30, 2000 of $5.7 million resulted principally from the payment of accrued liabilities related to the PROH, NCES and O&P dispositions, partially offset by the release of restricted cash and 401(k) forfeitures. The Company's cash position is extremely uncertain and risky. The Company's cash position, after satisfaction of its contractual obligations and operating expenses, will vary based on the amount and timing of cash flows. Cash inflows primarily consist of collections (through litigation and arbitration) of LTCS related receivables and Medicare related receivables. The Company is also a defendant in numerous lawsuits. Collectively, these lawsuits are seeking hundreds of millions of dollars form the Company. As discussed elsewhere, cash inflows and outflows from litigation are inherently extremely uncertain. The Company's assumptions with respect to incoming and outgoing cash flows include, without limitation, assumptions that certain litigation will be settled and not actually litigated, that the settlements will be for certain minimum amounts and that the settlements will occur within certain timeframes. These assumptions are uncertain and the actual timing and amounts may differ materially from amounts assumed herein. The Company's cash position may very likely be materially different from that estimated here - either materially better or materially worse. If certain of the lawsuits do not settle and instead proceed to trial, or if certain of the lawsuits do not settle for the amounts that the Company has assumed, this will have a material, probably adverse, impact on the Company's liquidity and cash flow and will likely require the Company to seek bankruptcy law protection. Furthermore, if certain of these lawsuits are not settled within the timeframes assumed by the Company, the Company will be required to incur additional costs and expenses, which may force the Company to seek bankruptcy law protection. There is a substantial risk that the Company will be forced to seek bankruptcy law protection. LIQUIDATION ANALYSIS AND ESTIMATES For purposes of determining the available assets, if any, that may be distributed to stockholders, in the event of a liquidation of the Company, management made the following estimates of the assets and liabilities of the Company, as of December 31, 2000. Stockholders should note that the current minimum estimate (i.e., the least amount available for stockholders) is a negative number - approximately negative $19.3 million or negative thirty-one cents (($.31)) per share. If the assumptions made by management in estimating the minimum estimated liquidation amount come true, management estimates that the Company's liabilities will exceed its assets by approximately $19.3 million, in which case there would be no assets available for distribution to stockholders. Furthermore, the current minimum estimate includes only estimates of potential settlements of the pending lawsuits against the Company, but does not include estimates of an adverse ruling or judgment against the Company in any of these lawsuits. If the Company suffers an adverse ruling or judgment in any of these cases, the Company will be forced to seek bankruptcy law protection. Any estimate of the Company's possible net assets, if any, available for distribution is extremely uncertain. This uncertainty, in general, is due to the fact that the Company's assets consist primarily of delinquent or disputed accounts receivable that are in litigation and the Company's liabilities consist of certain fixed obligations and many contingent liabilities that depend upon the outcome of legal proceedings against the Company. In connection with many of the collection actions brought by the Company against third parties to collect outstanding accounts receivable, counterclaims have been made against the Company which, in many cases, exceed the amount sought by the Company in the underlying actions. Moreover, some of the cases brought against the Company are fairly recent and, therefore, 16 NAHC, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) management is unable to assess the likely outcome of the proceeding. In establishing these estimates, management has made certain assumptions regarding the outcome of these cases and there can be no assurances that these assumptions will prove to be accurate. Other significant assumptions that have been made by management in establishing these estimates include (i) certain assumptions regarding the buyer of NCES continuing to satisfy certain workers compensation funding obligations over the next four to five years relating to former Company employees, which obligations are collateralized by Company deposits, and (ii) certain assumptions regarding the extent of indemnification claims made against the escrow account established by the Company with Chance Murphy, Inc. for Medicare settlements in connection with the LTCS sale. The estimated operating costs for the period from January 1, 2001 through June 30, 2001, the assumed liquidation date, have been based on the Company's internal estimates. It is possible that the actual liquidation date, if any, could be later if the Board of Directors, in its discretion, deems it appropriate and that the actual operating costs may differ materially from the estimates included herein.

The calculation for estimated net proceeds available for distribution per share includes the dilutive effect of a conversion into common stock of the note payable as described in Note 6. The following table sets forth a reconciliation of the low end of the range of the estimates set forth above under "Liquidation Analysis and Estimates" with the Company's shareholders' equity, as set forth in its unaudited Consolidated Balance Sheet as of September 30, 2000:

17 NAHC, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) IN DETERMINING THE ESTIMATED NET PROCEEDS AVAILABLE FOR DISTRIBUTION PER OUTSTANDING COMMON SHARE UPON THE LIQUIDATION OF THE COMPANY OF ($0.31) TO $0.0057, THE METHODS USED BY MANAGEMENT IN ESTIMATING THE VALUES AND VALUE RANGES OF THE COMPANY'S ASSETS WERE INEXACT AND MAY NOT APPROXIMATE VALUES ACTUALLY REALIZED. THESE ESTIMATES ARE SUBJECT TO NUMEROUS UNCERTAINTIES AND ALSO DO NOT REFLECT ALL CONTINGENT LIABILITIES THAT MAY MATERIALIZE. FOR THESE REASONS, THERE CAN BE NO ASSURANCE THAT THE ACTUAL NET PROCEEDS DISTRIBUTED TO STOCKHOLDERS IN LIQUIDATION WILL NOT BE SIGNIFICANTLY LESS THAN THE AMOUNT ESTIMATED. MOREOVER, NO ASSURANCE CAN BE GIVEN THAT ANY AMOUNTS TO BE RECEIVED BY THE COMPANY'S STOCKHOLDERS IN LIQUIDATION WILL EQUAL OR EXCEED THE PRICE OR PRICES AT WHICH THE COMMON STOCK HAS RECENTLY TRADED OR MAY TRADE IN THE FUTURE. THERE IS A SIGNIFICANT RISK, AS CAN BE SEEN IN THE CURRENT ESTIMATES, THAT THERE WILL BE NO ASSETS FOR DISTRIBUTION TO STOCKHOLDERS OR TO INVEST AND THAT THE COMPANY WILL BE FORCED TO SEEK BANKRUPTCY LAW PROTECTION. CAUTIONARY STATEMENT Except for historical information, matters discussed above including, but not limited to, statements concerning future operations and estimates of values to be received in liquidation, are forward-looking statements that are based on management's estimates, assumptions and projections. Important factors that could cause results to differ materially from those expected by management include the outcome and costs of pending legal actions against the Company, potential claims related to businesses sold, the ability of the Company to realize its remaining assets in cash, the cost to wind up the Company's affairs in preparation for a potential liquidation or investment and the Company's ability to retain management and professional employees during its transition period. Management's estimate of the Company's possible net assets, if any, available for distribution is extremely uncertain. This uncertainty, in general, is due to the fact that the Company's assets consist primarily of delinquent or disputed accounts receivable that are in litigation and the Company's liabilities consist of certain fixed liabilities and many contingent liabilities that depend upon the outcome of legal proceedings against the Company. All legal proceedings are inherently uncertain. Any investment in the Company should be considered extremely speculative and risky. Prior to making any investment decision regarding the Company, stockholders and prospective stockholders are urged to read in its entirety the Company's Annual Report on Form 10-K for the year ended June 30, 2000, and the Form 10-Q for the quarter ended September 30, 2000, both of which are on file with the Securities and Exchange Commission, in conjunction with this Form 10-Q. 18 NAHC, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK The Company does not engage in trading market risk sensitive instruments and does not purchase as investments, as hedges or for purposes "other than trading" instruments that are likely to expose the Company to market risk, whether it be from interest rate, foreign currency exchange or commodity price risk. The Company has entered into no forward or futures contracts, purchased no options and entered into no swap arrangements. 19 NAHC, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS The Company is subject to legal proceedings and claims which have arisen in the course of its business. Also, in conjunction with the sales of its businesses, the Company has indemnified the purchasers for certain obligations. Described below are certain claims, suits or complaints which, in the opinion of management, would have a material adverse effect on the Company's business, financial condition, results of operations and liquidity. Collectively, the damages sought to be recovered from the Company in these cases are in the hundreds of millions of dollars. BRADY V. NAHC, INC., ET AL., in the United States District Court for the Eastern District of Pennsylvania. This is a purported class action case filed on behalf of all persons who purchased the common stock of NAHC during the period between April 5, 1999 through and including November 22, 1999. Five similar actions have been filed in the Eastern District of Pennsylvania, including one that alleges a class period from May 20, 1998 through November 22, 1999. The Company expects that all similar cases will be consolidated into a single action. PricewaterhouseCoopers LLP is named as a defendant in one of the cases. The case is subject to the provisions of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). After the lead plaintiff and lead counsel are appointed by the Court, Defendants expect to file a motion to dismiss. Under the PSLRA, discovery is stayed until the motion to dismiss is resolved. The Plaintiffs asserted that the Company and certain of its directors and officers violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 by making false and misleading statements and omissions regarding the prospects of NAHC's business and NAHC's liquidation value and by failing timely to disclose the impact of the Balanced Budget Act of 1997 on the long term care services business. The Plaintiffs allege that these statements and omissions artificially inflated the value of the Company's stock during the class period. The Plaintiffs also assert a violation of Section 14(a) of the Exchange Act and Rule 14a-9 against the Company and individual Defendants as well as against Wasserstein Perella & Co. in connection with the Company's proxy statements dated August 13, 1999, as amended through September 10, 1999. The Plaintiffs allege that the Defendants were negligent in disseminating the proxy statements, which allegedly contained materially false and misleading statements. Wasserstein Perella & Co. has notified the Company that it will seek indemnification from the Company in connection with this action, pursuant to its engagement agreement with the Company. The Defendants intend to vigorously defend the action. Because of the early stage of this litigation, the Company is conducting an assessment of the merits of this case. The Company has notified its insurance carriers of this action. If the Defendants suffer an adverse judgment which the Company is required to pay, it will likely result in there being no assets for investment or liquidation; in such event, the Company will file for bankruptcy law protection. UNITED STATES OF AMERICA, EX REL., SAUL EPSTEIN V. NOVACARE, INC., ET AL., Civil Action No. 98-CV-4185. This QUI TAM action was filed on or about August 10, 1998 by Saul R. Epstein on behalf of the United States government, in camera and under seal in the United States District Court for the Eastern District of Pennsylvania, asserting claims against the Company for violations of the False Claims Act. On October 12, 1999, the United States Attorney for the Eastern District of Pennsylvania elected not to intervene in the matter and not to prosecute the complaint on behalf of the United States. On October 21, 1999 the complaint was unsealed. On November 26, 1999 an amended complaint was filed and subsequently served on the Company. The amended complaint alleges that the Company submitted false or fraudulent bills in connection with the provision of physical therapy to individuals covered by various health insurance programs that were provided to certain employees of the United States government. The complaint seeks to recover, on behalf of the federal government, treble damages for each violation of the False Claims Act and a civil penalty of $5 to $10 for each violation, plus attorneys' fees, experts' fees and costs of the suit. This matter currently is in discovery. The relator plaintiff recently made a motion to the court to add as defendants Select Medical Corporation ("Select") and certain of the subsidiary corporations acquired by Select from the Company as part of the PROH transaction. That motion is before the court. Pursuant to the purchase and sale agreement for the sale of the Company's PROH division to Select, the Company has indemnified Select and the PROH subsidiaries acquired by Select for any damages that any of those entities sustain 20 NAHC, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION (CONTINUED) arising from this action relating to conduct prior to the sale to Select. The Company may not have sufficient assets to try this case should it proceed to trial. In the event that the plaintiff obtains an adverse judgment, there will be no assets for investment or liquidation and the Company will file for bankruptcy law protection. SABOLICH, INC., SABOLICH PROSTHETICS CENTER OF WICHITA, INC., SABOLICH TRI-STATE PROSTHETICS, INC., SABOLICH OF FLORIDA, INC. AND JOHN A. SABOLICH V. NOVACARE, INC. AND NOVACARE ORTHOTICS AND PROSTHETICS EAST, INC. This action was filed on May 18, 1999 in the United States District Court for the Western District of Oklahoma, Case No. CIV-99-670-T. The complaint alleges that the defendants breached a 1994 Agreement of Purchase and Sale involving the acquisition of the plaintiffs' orthotics and prosthetics business. Plaintiffs allege that the defendants breached the agreement by failing to pay certain sums allegedly due them under the agreement. Plaintiffs also allege that defendants tortiously breached an alleged implied covenant of good faith and fair dealing in the agreement. Plaintiffs have claimed $5,000 of compensatory damages and $5,000 for punitive damages. As part of the Company's Stock Purchase Agreement, dated as of April 2, 1999 and amended May 19, 1999 and June 30, 1999, with Hanger Orthopedic Group, Inc. ("Hanger") for the sale of the Company's orthotics and prosthetics business, the Company and Hanger agreed that each entity would be responsible for 50% of any damages arising from this action, including all costs and expenses associated with the matter. This matter currently is in discovery. In the event that the plaintiff obtains an adverse judgment, there may be no assets for investment or liquidation and the Company may file for bankruptcy law protection. HEALTHSOUTH CORPORATION V. NOVACARE, INC. AND NC RESOURCES, INC., Montgomery County Court of Common Pleas, No. 99-17155 (filed September 28, 1999). The complaint in this action alleges that, pursuant to a February 3, 1995 stock purchase agreement involving the sale of the Company's medical rehabilitation hospital subsidiary Rehab Systems Company ("RSC") to Healthsouth Corporation ("Healthsouth"), the Company agreed to reimburse Healthsouth for any payments that Healthsouth was obligated to pay Medicare, Medicaid or other cost-based reimbursement systems as a result of RSC's indebtedness to such payors. The complaint seeks damages in the amount of $12,600. Initial pleadings in this matter have been completed and it is expected that the parties will proceed to discovery in the near future. In the event that the plaintiff obtains an adverse judgment, there will be no assets for investment or liquidation and the Company will file for bankruptcy law protection. CONTINENTAL ORTHOPEDIC APPLIANCES, INC. V. HEALTH INSURANCE PLAN OF GREATER NEW YORK, ET AL., 95 Civ. 4041 (ADS). The complaint in this action was filed in the United States District Court for the Eastern District of New York as a class action, alleging that the Company's former orthotics and prosthetics subsidiary, together with the Health Insurance Plan of Greater New York and others, participated in a conspiracy to violate federal and state antitrust laws prior to the Company's acquisition of such subsidiary. The complaint seeks to recover monetary damages in excess of $500, together with costs and attorneys fees, and punitive damages. Discovery in this case has ended. The case has not been certified as a class action. Pursuant to the purchase and sale agreements under which the Company acquired and later sold the former subsidiaries that are involved in this action, the Company is responsible for defending this action. This case is currently in the process of being settled, although settlement has not been finalized. In addition to the foregoing legal proceedings, the Company is a defendant in a number of other legal actions seeking monetary damages, which singularly and in the aggregate may have a material adverse effect on the Company's business, financial condition, results of operations and liquidity if such actions are adversely concluded. Also, in connection with many of the collection actions brought by the Company against third parties to collect outstanding accounts receivable, counterclaims have been made against the Company which, in many cases, exceed the amount sought by the Company in the underlying actions. In the event that any of the material actions are concluded in a manner that is adverse to the Company, there will be no assets for investment or liquidation and the Company would likely file for bankruptcy law protection. After September 30, the Company settled three claims that were in litigation or arbitration; COMPLETE CARE V. NOVACARE, U.S. EX. REL. GUBLO V. NOVACARE, and an action brought by a former employee. 21 NAHC, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION (CONTINUED) ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS NONE ITEM 3 - DEFAULTS UPON SENIOR SECURITIES NONE ITEM 4 - SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE ITEM 5 - OTHER INFORMATION NONE ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(B) Reports on Form 8-K There were no reports on Form 8-K during the three months ended December 31, 2000. 22 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. NAHC, INC. ----------------------------- (REGISTRANT) DATE: FEBRUARY 14, 2001 BY /s/ David R. Burt -------------------------- David R. Burt Chief Executive Officer, Principal Financial and Accounting Officer and Director 23

NAHC INC 10-Q