LIQUIDITY AND PROFITABILITY

12 Months Ended

Dec. 31, 2011

LIQUIDITY AND PROFITABILITY

LIQUIDITY AND PROFITABILITY

NOTE 2. LIQUIDITY AND PROFITABILITY

        The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. At December 31, 2011, the Company has an accumulated deficit of $18,713,000. The Company incurred a net loss attributable to the Company of approximately $6,164,000 and $2,744,000 for the years ended December 31, 2011 and 2010, respectively. The Company has negative working capital of approximately $5,367,000 at December 31, 2011. The Company's ability to sustain profitable operations and meet its current obligations is dependent on continued growth in revenue and controlling costs.

        Management's plans for increasing liquidity and profitability in future years encompass the following:

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  refinancing debt where possible to obtain more favorable terms;

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  increasing facility occupancy and improving the occupancy mix by increasing Medicare patients;

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  acquiring additional long term care facilities with existing cash flowing operations to expand our operations; and

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  adding additional management contracts.

        Management believes that the actions that will be taken by the Company provide the opportunity for the Company to improve liquidity and profitability, however, there can be no assurance that such events will occur. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.