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New York Health Care Announces Third Quarter Results.

Business Editors

BROOKLYN, N.Y.--(BUSINESS WIRE)--Nov. 13, 2003

New York Health Care, Inc. (the "Company") (Nasdaq:BBAL) today announced financial results for the quarter ended September 30, 2003. Net patient of revenues $11,044,365 were entirely generated from its healthcare services subsidiary. The Company's BioBalance subsidiary is a developmental stage specialty pharmaceutical company which did not generate revenues during this period. For the third quarter, the Company recorded a net loss of $1,099,192 or $.05 per share, which included net income of $51,000 from the operations of the home care segment. The net loss includes a non-cash expense in the amount of $461,000 from the issuance of stock options to consultants. Excluding this non-cash item, the net loss would have been $638,000, which is primarily related to product development and general & administrative expenses within the BioBalance subsidiary. In the prior year's third quarter, the net loss was $254,926 or $.01 per share.

On January 2, 2003, The BioBalance Corp. ("BioBalance") acquired New York Health Care in a transaction accounted for as a reverse acquisition. In accordance with the applicable accounting principles, the accompanying consolidated financial statements reflect the historical results of the predecessor entity (The BioBalance Corporation) prior to the merger date. The common stock and per share information have also been adjusted to reflect the reverse acquisition. Thus, the operations on a consolidated basis of New York Health Care and BioBalance for the third quarter of 2003 are being compared to the operations of only BioBalance for the third quarter of 2002 without regard to those of New York Health Care for that period.

Commenting, Jerry Braun, President and Chief Executive Officer of New York Health Care, stated, "While our home health care business continues to perform well, we see the real growth opportunity coming from our gastrointestinal platforms, with our first product, PROBACTRIX(TM), leading the way. Our planned timetable calls for completing the GRAS (generally recognized as safe) review process for PROBACTRIX(TM) by Q1 '04, followed by the introduction of PROBACTRIX(TM) into the United States market as a medical food for the dietary management of Irritable Bowel Syndrome ("IBS") symptoms in late 2004. In addition, our scientific and regulatory staff plans to meet with the FDA in early 2004 to discuss the clinical development requirements for a prescription formulation of its proprietary biotherapeutic agent for a number of potential indications."

Dennis O'Donnell, Chief Operating Officer of BioBalance, stated, "Much was accomplished at BioBalance in recent months. In August, we completed the acquisition of a new platform technology of clinically-validated biotherapeutic agents from NexGen Bacterium Inc. This transaction strengthens our new product pipeline well beyond PROBACTRIX(TM), our lead product for irritable bowel syndrome. The acquisition included proprietary strains of Bacillus across all gastrointestinal indications that have undergone extensive laboratory and clinical testing and have been shown to possess natural anti-inflammatory, antibacterial and anti-viral properties."

Mr. O'Donnell continued, "There have also been a number of promising PROBACTRIX(TM) trials; including studies:

-- conducted at The Moscow Center of HIV patients, in which a

formulation containing our proprietary biotherapeutic agent,

PROBACTRIX(TM), appeared to rapidly and effectively control

diarrhea and other abdominal symptoms commonly associated with

HIV infections and treatment;

-- at Moscow State Medical University, which conducted a

PROBACTRIX(TM) trial in two Moscow municipal hospitals on

patients with antibiotic-associated diarrhea; PROBACTRIX(TM)

appeared to rapidly and effectively control diarrhea commonly

associated with antibiotic usage; and,

-- performed at the Institute of Animal Research, Kibbutz Lahav,

Israel, in which a formulation containing PROBACTRIX(TM)

significantly reduced mortality rates and incidence of

diarrhea in piglets as compared to antibiotics. The study was

conducted and is the first to document the benefits of

probiotic products as a possible alternative to controversial

antibiotic use in these food animals."

He concluded, "We continue to meet or exceed our previously announced milestones for the Company. With the progress we are making and the actions we are taking, we believe that BioBalance is poised to become a science-based GI therapeutics company that will ultimately address a broad range of substantial medical and commercial opportunities worldwide."

BioBalance is a development stage specialty pharmaceutical company focused on the discovery, development and commercialization of proprietary treatments for gastrointestinal (GI) disorders. These include irritable bowel syndrome, inflammatory bowel disease, which encompasses Crohn's disease and ulcerative colitis, and various diarrheas including antibiotic-associated diarrhea, AIDS- related diarrhea and chemotherapy-induced diarrhea. BioBalance operates as a wholly owned subsidiary of New York Health Care, a home healthcare company with which it merged on January 2, 2003 in a Stock Exchange Agreement. The combined entity trades on NASDAQ under the symbol BBAL.

SAFE HARBOR STATEMENT 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 approvals and conditions applicable to the transaction described above, 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, cautionary statements made in the company's 2002 Annual Report on Form 10-K, the company's Form S-4 Registration Statement, its latest quarterly report on Form 10-Q and current reports on Form 8-K.

(See Accompanying Tables)

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

 For The Three Months Ended For The Nine Months Ended
 September 30, September 30,
 -------------------------- --------------------------
 2003 2002 2003 2002
 ------------- ------------ ------------- ------------

Net patient
 service revenue $11,044,365 $ - $ 33,859,114 $ -
 ------------- ------------ ------------- ------------

Expenses:
 Professional
 care of
 patients 8,821,090 - 27,059,757 -
 ------------- ------------ ------------- ------------
 Product
 development 211,287 24,669 476,376 171,717
 ------------- ------------ ------------- ------------
 General and
 administrative
 (excluding non
 cash
 compensation) 2,482,798 177,957 7,357,024 644,507
 Non cash
 compensation 460,845 - 1,497,021 -
 ------------- ------------ ------------- ------------

 Total general
 and
 administrative
 expenses 2,943,643 177,957 8,854,045 644,507
 ------------- ------------ ------------- ------------


 Goodwill
 impairment 17,869,339 -
 Bad debt expense 15,000 35,250 -
 Depreciation and
 amortization 165,913 52,300 394,668 157,300
 ------------- ------------ ------------- ------------

 Total
 operating
 expenses 12,156,933 254,926 54,689,435 973,524
 ------------- ------------ ------------- ------------

Loss from
 operations (1,112,568) (254,926) (20,830,321) (973,524)

Non-operating
 expenses:
 Interest income 13,376 - 37,649 -
 Interest expense - - (470) -
 ------------- ------------ ------------- ------------

Net loss $(1,099,192) $ (254,926) $(20,793,142) $ (973,524)
 ============= ============ ============= ============

Basic and diluted
 loss per share $ (0.05) $ (0.01) $ (0.86) $ (0.05)
 ------------- ------------ ------------- ------------

Weighted and
 diluted average
 shares
 outstanding 24,375,497 20,270,356 24,062,556 20,138,490
 ============= ============ ============= ============

(1) On January 2, 2003, The BioBalance Corp. ("BioBalance") acquired
New York Health Care in a transaction accounted for as a reverse
acquisition. Although New York Health Care is the name of the
surviving public corporate entity, and BioBalance is its wholly-owned
subsidiary, the Company's financial statements reflect the historical
results of BioBalance, prior to January 2, 2003 and the consolidated
results of operations of the Company subsequent to the acquisition
date of January 2, 2003. The Company's condensed consolidated
financial statements have been retroactively adjusted to give effect
to the reverse acquisition on January 2, 2003. At that time, the
Company amended its certificate of incorporation increasing the number
of authorized common stock from 50,000,000 shares to 100,000,000
shares and preferred stock from 2,000,000 shares to 5,000,000 shares.

(2) As a result of the merger early in the year, the Company
recognized goodwill of $18,750,000, related to the home care business.
Based upon an independent valuation of this business versus its
purchase price, the Company recorded a non-cash, non-recurring
impairment to goodwill charge of $17,869,339. The first quarter net
loss $18,828,915 also includes a non-cash loss of $753,000 resulting
from an accounting charge due to the issuance of variable options.
Without these two non-cash items, the consolidated net loss would be
$383,000, comprised of net income of $156,000 from the operations of
the home health care segment offset by operating losses of $539,000
from the BioBalance segment.


 NEW YORK HEALTH CARE, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 ASSETS

 September 30, December 31,
 2003 2002
 ------------- ------------
 (Unaudited) (Note 1)
Current assets:
 Cash and cash equivalents $ 6,836,091 $ 2,625,378
 Restricted cash - 100,000
 Due from lending institution 96,300 -
 Accounts receivable, net of
 allowance for uncollectible
 amounts of $378,000 6,218,802 -
 Subscriptions receivable - 290,000
 Unbilled services 114,277 -
 Prepaid expenses and other
 current assets 544,979 36,342
 ------------- ------------
 Total current assets 13,810,449 3,051,720

Property and equipment, net 161,247 -
Goodwill 900,587 -
Other intangible assets, net 6,113,685 1,936,033
Deferred merger costs - 248,363
Other assets 73,619 23,333
 ------------- ------------
 Total assets $ 21,059,587 $ 5,259,449
 ============= ============

 LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Accrued payroll $ 1,569,173 $ -
 Current portion of lease
 obligations payable 2,778 -
 Accounts payable and accrued
 expenses 4,583,067 349,182
 Due to HRA 3,163,888 -
 Due to related parties 1,540,526 -
 ------------- ------------
 Total current liabilities 10,859,432 349,182
 ------------- ------------

Commitments and contingencies

Shareholders' equity:
 Preferred stock, $.01 par value,
 5,000,000 shares authorized;
 Class A Preferred, 590,375
 authorized, issued and
 outstanding 5,904 -
 Common stock, $.01 par value,
 100,000,000 shares authorized;
 24,943,821 shares issued and
 24,938,976 outstanding as of
 September 30, 2003; 50,000,000
 shares authorized; 21,116,494
 shares issued and outstanding
 as of December 31, 2002 249,438 211,165
 Additional paid-in capital 32,599,494 6,550,328
 Deficit (22,644,368) (1,851,226)
 Less: Treasury stock (4,845
 common shares at cost) (10,313) -
 ------------- ------------
 Total shareholders' equity 10,200,155 4,910,267
 ------------- ------------
 Total liabilities and
 shareholders' equity $ 21,059,587 $ 5,259,449
 ============= ============
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Publication:Business Wire
Geographic Code:1USA
Date:Nov 13, 2003
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