SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549



                         Amendment No. 2 on FORM 10-K/A


                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: July 31, 1995.         Commission File Number 0-12927

                         NATIONAL HOME HEALTH CARE CORP.
            -------------------------------------------------------
             (Exact name of registrant as specified in its charter)

       Delaware                                                  22-2981141
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

  700 WHITE PLAINS ROAD, SCARSDALE, NEW YORK                       10583
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code: 914-722-9000

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.001 per share


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  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                     Yes    [X]                       No   [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge in definitive  proxy or information  statements,
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of October 25, 1995,  the  aggregate  market value of the Common Stock of the
Registrant,  its only class of voting securities,  held by non-affiliates of the
Registrant was approximately $10,258,540, calculated on the basis of the average
closing  bid and  asked  prices of such  stock on the  National  Association  of
Securities  Dealers Automated  Quotation System on that date, as reported by the
National Association of Securities Dealers, Inc.

The number of shares outstanding of the Registrant's Common Stock on October 25,
1995 was 4,722,576.



<PAGE>



Portions of the  Registrant's  Proxy  Statement  for its 1995 Annual  Meeting of
Stockholders  (which  Proxy  Statement  will be filed  with the  Securities  and
Exchange  Commission  on or  before  November  28,  1995)  are  incorporated  by
reference in Part III hereof.








                                       -2-

<PAGE>




                                     PART I

ITEM  1.   BUSINESS

GENERAL

     National  Home  Health  Care  Corp.   ("the   Registrant")  is  a  Delaware
corporation  which was  incorporated  on July 27,  1983 under the name of Family
Medical  Treatment  Centers of America,  Inc.  Effective  December 14, 1984, the
Registrant  changed its name to National HMO Corp.  and  effective  December 20,
1991,  the  Registrant  changed its name to National Home Health Care Corp.  The
Registrant   completed  its  initial  public  offering  in  December  1983.  The
Registrant is a provider of home health care and outpatient medical services.

     The Registrant has four operating subsidiaries:

     *    Health Acquisition Corp., formerly Allen Health Care Services, Inc., a
          New York  corporation,  of which Allen  Health Care  Services  ("Allen
          Health Care") is the sole operating division. The operations of Hitech
          Home Care,  formerly another operating  division of Health Acquisition
          Corp., were  discontinued  during the fiscal year ended July 31, 1993.
          Accordingly,  all operations relating to Hitech Home Care are shown as
          discontinued  operations in the financial statements and notes thereto
          appearing elsewhere herein.

     *    Brevard Medical Center, Inc., a Delaware corporation ("Brevard Medical
          Center"),  which conducts  business in Brevard County,  Florida.  Boro
          Medical Corp., a Florida corporation,  is a wholly-owned subsidiary of
          Brevard Medical Center.

     *    First Health,  Inc., a Florida  corporation  ("First  Health"),  which
          conducts business in Volusia County, Florida.

     *    New  England  Home  Care,  Inc.,  a  Connecticut   corporation   ("New
          England"), which conducts business in the State of Connecticut.


HEALTH ACQUISITION CORP.

Allen Health Care Services
--------------------------

     Allen Health Care maintains its principal administrative office in Jamaica,
New York and has satellite offices in New York City,  Farmingdale and Hempstead,
New York. The company  provides  personal home health care  services,  including
registered nurses,  licensed practical nurses,  personal care aides, home health
aides and homemakers in the following counties in the State of New York:



                                      -3-

<PAGE>



Nassau,  Suffolk,  Queens,  Kings,  New York and the Bronx.  All  personnel  are
licensed or are agency certified under a New York State approved program and can
be engaged on a full-time,  part-time or live-in  basis.  Allen Health Care is a
participating  provider in both the Nassau and Suffolk  Counties  Department  of
Social Services Medicaid Programs. The Public Health Council of the State of New
York  Department of Health has approved the  application for licensure of Health
Acquisition Corp. d/b/a Allen Health Care with no limited life restrictions.

     Allen Health Care received Joint  Commission on Accreditation of Healthcare
Organizations  (JCAHO) status in New York State. JCAHO, which is the accrediting
body for all  health  care  providers,  is  associated  with  providing  quality
services.  This  status is required  by many of the  certified  home health care
agencies that Allen Health Care currently services. The company's  accreditation
expires in May 1996, at which time a resurvey  will be commenced.  Reimbursement
for the  division's  services is primarily  provided by the Department of Social
Services of both Nassau and Suffolk Counties,  New York, as well as by certified
home health care  agencies  and long term health care  provider  programs  which
contract  with the  division.  In  addition,  in April  1995,  services  of this
subsidiary  were  expanded to include home care  pediatric  skilled  nursing for
medically fragile children and their families.

     Allen  Health  Care  provides  home health  care  services to its  clients,
twenty-four  hours per day, seven days per week.  Although the company's offices
are open during normal business hours, personnel are available twenty-four hours
per day to respond to  emergencies  and to provide other service  requests.  The
registered  nurses of Allen  Health  Care,  in  accordance  with New York  State
Department  of Health  Regulations  and Contract  Requirements,  visit  patients
regularly  and review the records of service  which are completed by home health
and personal  care aides daily.  These  records are  maintained  by Allen Health
Care. In addition,  the home care coordinator ensures that appropriate  coverage
is  maintained  for all patients and acts as the liaison  among family  members,
aides and the professional staff.

     To a large extent,  Allen Health Care's growth  potential  depends upon its
ability to recruit and maintain  qualified  personnel.  The  company's  training
programs for home health aides and  personnel  care aides have been  approved by
the New York State  Department  of Health.  The company  believes that it offers
competitive  salaries  and  fringe  benefits  and has been able to keep its home
health aides working on a steady basis.

Hitech Home Care
----------------

     In May 1992, Health  Acquisition Corp.  purchased  substantially all of the
assets of Hitech Registered Nurses of New Jersey,  Inc.  ("Hitech"),  a licensed
nursing  agency that  provided  home  intravenous  infusion  therapy and skilled
nursing in the adult,  pediatric and high risk  maternity  areas in the State of
New Jersey.  In addition,  Health  Acquisition  Corp.  entered into a three-year
employment  agreement with each of the two former  shareholders of Hitech.  Each
employment



                                       -4-

<PAGE>



agreement called for  compensation to the employee during the three-year  period
in the  aggregate  amount  of  $255,000,  with an  additional  signing  bonus of
$225,000 to each employee.

     In July 1993,  the  Registrant  discontinued  the operations of Hitech Home
Care after determining that the time and financial commitment required to expand
its  operations  and to make it  profitable  would be too  great to  pursue.  In
connection with such  discontinuation,  Health  Acquisition  Corp.  entered into
agreements  relating to the termination of the employment  agreements of each of
the two key  Hitech  Home Care  employees  and the  termination  of the lease of
Hitech Home Care's office in Valhalla,  New York.  The  agreements  required the
payment  of  $30,000  in  accrued  bonuses  and  severance  to one  employee  of
approximately  $13,000.  The lease termination  required the one-time payment of
$75,000 and the forfeiture of a $30,000  security  deposit in order to terminate
the lease,  which would have required monthly payments of $5,687 per month until
April 1995. See "Notes to Financial Statements - Discontinued Operations."

NEW ENGLAND HOME CARE

     On August 4, 1995, the Registrant  consummated  the  acquisition of 100% of
the capital stock of Nurse Care, Inc. ("Nurse Care"),  the parent company of New
England Home Care, Inc. ("New England") for $3,150,000 in cash. In addition, one
of the two former  shareholders  entered into a one-year  employment contract as
the  Administrator  of New  England  with a base salary of  $125,000.  The other
former  shareholder  entered  into a one-year  consulting  agreement  to provide
certain  consulting  services  with respect to the  operations of New England in
consideration of $20,000 in consulting fees.

     New England is a Medicare  certified  and licensed home health care company
in the State of Connecticut.  The company provides a wide variety of home health
care  services  consisting  of home  health  aides,  skilled  nursing,  physical
therapy,  speech  therapy,  occupational  therapy and social  work.  New England
maintains its principal  administrative  office in Milford,  Connecticut and has
branch offices in Norwalk, Hamden, Waterbury, Seymour and Danbury,  Connecticut.
Although the company is currently  undertaking  the  necessary  steps to achieve
JCAHO status in the State of  Connecticut,  there can be no assurance  that this
status will be obtained.  Reimbursement for New England's services is  primarily
provided by the Federal Medicare  Program and the State of Connecticut  Medicaid
Programs. Additional sources of revenue are from managed care programs, hospices
and commercial insurance carriers.

BREVARD MEDICAL CENTER

     Brevard Medical Center  provides  out-patient  multi-specialty  and primary
medical care through its five  outpatient  medical  offices  located  throughout
Brevard  County,  Florida.  The company  maintains its principal  administrative
office in Melbourne, Florida.





                                      -5-

<PAGE>



     The services of the company include  primary and specialty  physician care,
diagnostic  testing,  laboratory  and  x-ray  services,  minor  office  surgery,
follow-up  care relating to specific  treatments  as well as continuous  care to
patients.

     The company  enters into  contracts  with primary care  physicians  who are
either Board Certified or Board Eligible in their primary care  discipline.  The
physician  is also  required to obtain and  maintain  local  hospital  admitting
privileges to provide  continuity of care to Brevard Medical Center's  patients,
both in and out of the hospital.  The physicians  render  services in accordance
with quality assurance standards set by the American Medical Association and are
monitored by the company's Quality Improvement Committee.  In addition,  Brevard
Medical  Center  enters into  agreements  with  specialty  physicians to provide
Brevard Medical Center's patients with in-house consultations,  consultations in
their own offices as well as acute care in the hospital for advanced  diagnostic
testing and major surgery.

     Brevard  Medical  Center  contracts  with  employer  groups,  health plans,
preferred  provider  organizations  and community  health  purchasing  alliances
consisting  of  local  health  maintenance   organizations.   The  company  also
participates with various indemnity coverage programs.

     In addition,  Brevard Medical Center provides  out-patient medical services
for its  wholly-owned  subsidiary,  Boro Medical Corp. Boro Medical Corp. is the
holder of a prepaid cost reim bursement  contract with the Health Care Financing
Administration of the Federal Government to provide certain  out-patient medical
services to Medicare subscribers.  In addition, Boro Medical Corp. is the holder
of a prepaid health clinic  license  (PHC),  which is a certificate of authority
issued by the Florida  Department  of  Insurance to provide  certain  outpatient
medical services to subscribers.

     Although Brevard Medical Center has been able to recruit physicians,  there
can be no  assurance  that  it will  successfully  continue  to do so.  If it is
unsuccessful, it will then be necessary for the company to use temporary medical
personnel,  which will increase the company's costs for physicians,  the Company
believes, by approximately fifty (50%) percent.

FIRST HEALTH, INC.

     First Health, which was incorporated in the State of Florida in April 1994,
provides  outpatient  medical  services  through  its three  outpatient  medical
offices in Volusia County,  Florida.  In 1994,  First Health  purchased  certain
fixed and intangible assets of Healthmark, P.A. and Atlantic Medical Associates,
P.A.,  which were engaged in providing  outpatient  medical  services in Volusia
County.

     First Health is a preferred provider for a health maintenance  organization
under both  Medicare  and  commercial  provider  agreements  in all three of its
outpatient  medical centers.  The company contracts with primary care physicians
who are  either  Board  Certified  or  Board  Eligible  in  their  primary  care
discipline. The physician is also required to obtain and maintain local hospital
admitting  privileges to provide  continuity of care to First Health's patients,
both in and out of the hospital. The




                                       -6-

<PAGE>



physicians render services in accordance with quality assurance standards set by
the American Medi cal  Association  and are  monitored by the company's  Quality
Improvement Committee.

     Although First Health has been able to recruit physicians,  there can be no
assurance that it will successfully continue to do so. If it is unsuccessful, it
will then be necessary for the company to use temporary medical personnel, which
will increase the  company's  costs for  physicians,  the Company  believes,  by
approximately fifty (50%) percent.

NATIONAL HMO (NEW YORK), INC.

     On April 30, 1994, Boro Medical,  P.C. and Boro Health Care of Union,  P.C.
(collectively  "Boro  Medical"),  a medical  provider to which National HMO (New
York),  Inc.  ("National  New York") and National HMO Corp. of  Elizabeth,  Inc.
("National  Elizabeth")  provided  non-medical  and  administrative   management
services,  terminated  its  relationship  with  National  New York and  National
Elizabeth.  In  addition,  on April 30,  1994,  National  New York and  National
Elizabeth entered into an asset purchase agreement with Boro Medical.  Under the
terms of the agreement,  as consideration  for the sale by National New York and
National  Elizabeth of certain  assets,  Boro  Medical  agreed to pay a purchase
price of $750,000,  as well as all  outstanding  management fees due to National
New York  through  April 30,  1994 in the  aggregate  amount of  $500,000.  Boro
Medical  delivered at closing  five-year and three-year  promissory notes in the
aggregate  amounts of $750,000 and $500,000,  respectively,  each at an interest
rate of seven percent.  The leases at all of the medical  offices subject to the
former  relationship  were  assumed by Boro  Medical and  National  New York and
National  Elizabeth  were  released  from  any  further  obligations  under  the
applicable lease agreements. In addition,  National New York, National Elizabeth
and  certain of its  officers  and Boro  Medical  and  certain  of its  officers
delivered mutual releases with respect to all prior claims that may have existed
between them  relating to their former  relationship  and further  agreed not to
compete with one another in certain operations and in specific areas relating to
their respective businesses.

     For the fiscal year ended July 31, 1993, the revenue  associated  with Boro
Medical represented  approximately 21% of the Registrant's consolidated revenues
from continuing  operations for such year. In addition,  in July 1994,  National
New York  terminated its management  agreement with the dental  practitioner  to
which it also provided administrative and management services.  Accordingly, the
Registrant  has  reclassified  its financial  statements to show  separately the
results of the  discontinued  operations.  See "Notes to Financial  Statements -
Discontinued Operations".

INSURANCE

     The Registrant  maintains  professional  malpractice  liability coverage on
professionals  employed in the  rendering of health care services in addition to
coverage for the  customary  risks  inherent in the  operation of  businesses in
general.  Health  Acquisition Corp. and New England carry corporate  malpractice
insurance  policies  providing  coverage  in an amount of up to  $1,000,000  per
occurrence  and up to $6,000,000 in the aggregate.  Both Brevard  Medical Center
and First Health carry a




                                       -7-

<PAGE>



corporate  malpractice  insurance  policy  providing  coverage  in an  amount of
$1,000,000  per  occurrence  and  $3,000,000  in the  aggregate.  Recent  market
conditions with respect to liability  insurance have caused wide fluctuations in
the cost and  availability  of  coverage.  While  the  Registrant  believes  its
insurance  policies  are  adequate  in the amount and  coverage  for its current
operations,  there  can  be no  assurance  that  coverage  will  continue  to be
available in adequate amounts or at a reasonable cost.

EMPLOYEES

     As of October 27, 1995, the Registrant  employed  approximately  1,600 full
and  part-time  employees  of  whom  18  were  employed  in  various  management
capacities and 3 were employed in marketing activities.

     Health  Acquisition  Corp.,  New England,  Brevard Medical Center and First
Health  recruit  health  service  personnel  principally  through  referral from
existing  personnel and through  newspaper  advertisements.  The  Registrant has
standardized  procedures for  recruiting,  interviewing  and reference  checking
prospective health care personnel. All nurses and physicians must be licensed by
the appropriate  licensing  authorities.  Employees  receive  instruction in the
procedures and policies of the respective subsidiary corporations.

     The Registrant's  ability to attract a staff of highly trained personnel is
a material element of its business.  There currently is intense  competition for
qualified  personnel and there can be no assurance that the  Registrant  will be
successful in maintaining or in securing  additional  qualified  personnel.  The
Registrant  has no union  contracts  with any of its employees and believes that
its relationship with its employees is satisfactory.

COMPETITION

     The home  health  care  field is  highly  competitive.  The  Registrant  is
competing  with numerous  other  licensed as well as certified  home health care
agencies. In addition,  the Registrant competes with companies that, in addition
to  providing  health  aid  and  skilled  nursing  services,  also,  unlike  the
Registrant,  provide  pharmaceutical  products and other home care services that
generate additional referrals.

     The out-patient medical field is highly competitive as well. The Registrant
faces  competition in securing  patients and in recruiting  qualified  personnel
from hospitals,  health  maintenance  organizations and other medical providers.
Many of the Registrant's  competitors are larger and have greater experience and
financial  resources  which  facilitates  their  ability to secure  patients and
recruit personnel.





                                       -8-

<PAGE>



CUSTOMERS

     One or  more  customers  have  each  accounted  for  more  than  10% of the
Registrant's  revenues. For the fiscal years ended July 31, 1995, 1994 and 1993,
VNS Home  Care,  a  non-profit  Medicare  certified  home  health  care  agency,
accounted  for  40%,  39% and 34%,  respectively,  and the  State  of New  York,
Department  of Social  Service  personal  care aide  program for the counties of
Suffolk  and  Nassau  accounted  for  13%,  17% and  21%,  respectively,  of the
Registrant's consolidated revenues from continuing operations. The total loss of
any of the  foregoing  customers  would  have a material  adverse  effect on the
Registrant.

GOVERNMENT REGULATIONS

General
-------

     The  health  care  industry  is  highly   regulated,   and  the  regulatory
environment in which the  Registrant  operates may change  significantly  in the
future,  particularly  in light  of the many  proposed  changes  of the  current
administration.   These  changes  include   proposals  to  increase   government
involvement in health care, lower Medicare and Medicaid  reimbursement rates and
otherwise  change  the  environment  in  which  the  Registrant  operates.   The
Registrant cannot predict with any certainty what impact, if any,  proposals for
health  care  reforms  might have on the  Registrant's  business.  In  addition,
certain  third  party  payors  of health  care  services  (insurance  companies,
Medicare and  Medicaid)  have  significantly  revised  payment  procedures in an
effort to contain  health  care costs.  Although a majority of the  Registrant's
revenues are currently  generated through the provision of non-skilled  services
(personal  care aide and home health  aide),  factors  affecting the health care
industry may have a significant impact on the Registrant's operating results.

     Significant  aspects of the  Registrant's  businesses are subject to local,
state and  federal  statutes  and  regulations  governing,  among  other  areas,
licensing,  fee  splitting,   reimbursement  under  federal  and  state  medical
assistance programs,  financial  relationships  between healthcare providers and
potential referral sources,  workplace health and safety and other matters.  The
Registrant's  businesses  may also be affected by changes in ethical  guidelines
and operating standards of professional and trade associations.

     Many states require regulatory  approval,  including  certificates of need,
before  establishing  certain types of health care facilities,  offering certain
health care services or making  expenditures  in excess of statutory  thresholds
for health care equipment, facilities or programs.

     The ability of the  Registrant  to operate  profitably  will depend in part
upon  the  Registrant   obtaining  and  maintaining   all  necessary   licenses,
certificates  of need and other  approvals  and  operating  in  compliance  with
applicable health care regulations.





                                      -9-

<PAGE>



State Regulation
----------------

     State laws impose licensing requirements on health care professionals,  and
on facilities  operated by such professionals.  In addition,  state laws specify
who may practice  medicine and limit the scope of relationships  between medical
practitioners  and other  parties.  Violations of these laws may result in civil
and criminal penalties.

     Several  states  have  adopted  or are  considering  legislation  that,  if
enacted,  would  restrict or prohibit  referrals by  physicians to facilities in
which the  physicians  have an  ownership  interest  or with  which  they have a
financial  relationship.  Violations  of these  laws may  result  in the loss of
healthcare provider licenses as well as fines and criminal  penalties.  On April
8, 1992, the State of Florida enacted a patient  Self-Referral Act that severely
restricts patient referrals for certain services,  prohibits mark-ups of certain
procedures,  requires  disclosure  of  ownership  requirements  and places other
regulations on health care providers.  The Registrant  believes that its Florida
offices fit within the group  practice  exemption  contained in the Florida Act;
however, certain relationships are not explicitly sanctioned by the Act, but are
not believed to be prohibited.  There can be no assurance that other states will
not adopt similar legislation or that the Registrant's offices will in all cases
be able to comply with such laws. Such statutes could restrict  expansion of the
Registrant's operations into those jurisdictions.

Medicare Fraud and Abuse
------------------------

     Provisions of the Social Security Act under Medicare and Medicaid generally
prohibit soliciting,  receiving, offering or paying, directly or indirectly, any
form of remuneration in return for the referral of Medicare or state health care
program patients or patient care  opportunities,  or in return for the purchase,
lease or order of any facility  item or service that is covered by Medicare or a
state  health  care  program.  In July 1991,  the federal  government  published
regulations   that  provide   exceptions,   or  "safe   harbors,"  for  business
transactions  that will be deemed  not to  violate  the  anti-kickback  statute.
Violations  of the  statute  may  result in civil  and  criminal  penalties  and
exclusion from participation in the Medicare and Medicaid programs.

     The Registrant believes that its current operations are not in violation of
the anti-kickback statute.  However, judicial decisions interpreting the statute
and the  regulations  promulgated  thereunder,  have  resulted  in  varying  and
ambiguous  interpretations of the statute.  Thus, the scope of the anti-kickback
statute is unclear. A determination that the contracts and relationships entered
into by the Registrant violated the anti-kickback  statute would have a material
adverse impact on the business of the Registrant.

     As medical  providers,  both  Brevard  Medical  Center and First Health are
subject to the above mentioned regulations.  If these companies were found to be
in violation of such regulations,  the Registrant would be materially  adversely
affected.





                                      -10-

<PAGE>



Regulatory Compliance
---------------------

     The  Registrant  believes  that health care  regulations  will  continue to
change and, therefore,  regularly monitors  developments in health care law. The
Registrant  expects to modify its agreements and operations from time to time as
the business and regulatory  environment changes.  While the Registrant believes
it will be able to structure  all its  agreements  and  operations in accordance
with applicable law, there can be no assurance that its arrangements will not be
successfully challenged.

ITEM 6.              SELECTED FINANCIAL DATA.

     The  following  table,  which  presents  selected  financial  data  for the
Registrant  for each of the last five fiscal  years,  has been  derived from the
Consolidated Financial Statements of the Registrant,  which have been audited by
Richard A. Eisner & Company, LLP, independent auditors.

     The  data  set  forth  below  should  be  read  in  conjunction   with  the
Consolidated Financial Statements in Item 8 of this Report.

<TABLE>
<CAPTION>

                                   1995             1994            1993           1992            1991
                                   ----             ----            ----           ----            ----

<S>                             <C>              <C>             <C>            <C>             <C>        
Revenues                        $24,556,000      $20,116,000     $18,059,000    $16,230,000     $11,396,000

Net Income from
  continuing
  operations                      1,426,000        1,218,000       1,309,000      1,189,000         968,000

Net income from
  continuing
  operations per
  share                                 .30              .26             .27            .25             .20

Net income
  (loss) from
  discontinued
  operations-                           -0-       (3,472,000)       (461,000)       658,000         641,000

Net income
  (loss) per share
  from dis-
  continued
  operations                            -0-             (.73)           (.09)           .14             .14

Total Assets                     18,865,000       17,926,000      20,309,000     19,106,000      17,356,000

Long Term    
  Obligations                        14,000           40,000          77,000        146,000          ---


</TABLE>



                                      -11-

<PAGE>






ITEM 7.    MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS.

     The  following  discussion  and  analysis  provides  information  which the
Registrant's  management believes is relevant to an assessment and understanding
of  the  Registrant's  results  of  operations  and  financial  condition.  This
discussion  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes thereto appearing elsewhere herein.

     On April 30, 1994, Boro Medical,  a medical  provider to which National New
York and National Elizabeth provided  non-medical and administrative  management
services,  terminated  its  relationship  with  National  New York and  National
Elizabeth.  In  addition,  in  July  1994,  National  New  York  terminated  its
relationship with the dental  practitioner to which it also provided  management
services. See "Business - National HMO (New York), Inc."

     In July 1993,  the  Registrant  discontinued  the operations of Hitech Home
Care, the division of Health Acquisition Corp. that provided skilled nursing and
home  intravenous  therapy  services.  In  management's  opinion,  there was not
sufficient  growth potential in this market to make any further  expenditures of
working capital.

     The above  transactions have been reflected in the financial  statements as
discontinued  operations.   See  "Notes  to  Financial   Statements-Discontinued
Operations."  The  results  of  operations  as  discussed  below  relate  to the
continuing operations of the Registrant.

RESULTS OF OPERATIONS
---------------------
YEAR ENDED JULY 31, 1995 AS COMPARED TO YEAR ENDED JULY 31, 1994
----------------------------------------------------------------

     Revenues  increased by approximately  $4,440,000,  or 22%, from $20,116,000
for the fiscal year ended July 31, 1994 ("fiscal  1994") to $24,556,000  for the
fiscal year ended July 31, 1995 ("fiscal 1995"). Approximately $3,270,000 or 74%
of this increase is attributable  to Health  Acquisition  Corp.,  the subsidiary
that provides home health care  services.  Health  Acquisition  Corp.  was again
successful  in increasing  volume with existing  customers and secured eight (8)
new provider  agreements  during fiscal 1995.  Services of this  subsidiary were
also expanded in April 1995 to include home care pediatric  skilled  nursing for
medically  fragile  children and their  families.  Revenues  generated from this
expansion of services  approximated  $293,000 for the period from April  through
July 1995.  Revenues from Brevard Medical  Center,  the subsidiary that operates
outpatient medical centers in Brevard County,  Florida,  increased approximately
$358,000,  or 9% from  fiscal  1994.  As a result of the  health  care  industry
shifting  toward  managed care,  Brevard was  successful  in becoming  preferred
providers  for new managed care plans coming into the county.  This  increase in
revenues is the direct result of additional  capitation  business generated from
managed care




                                      -12-

<PAGE>



plans,  primarily from health  maintenance  organizations  (HMO's),  offset by a
reduction in traditional  fee-for-service business. The Registrant expects these
trends to continue in the future.  Although revenues increased over the previous
fiscal year,  the loss of any of these new managed care  contracts  would have a
material  adverse  effect on the  Registrant.  Revenue  from First  Health,  the
subsidiary that operates  outpatient medical centers in Volusia County, Florida,
increased  approximately  $812,000 from the previous  fiscal year, as only three
months were  included in fiscal July 31, 1994  operations.  The major  source of
revenue is from a large health maintenance  organization,  to which First Health
is a preferred provider.

     Revenues  from home care  services  accounted  for 79% of the  Registrant's
consolidated revenues in the current fiscal year and has historically  generated
the greatest  operating  margins for the  Registrant.  The  Registrant's  recent
acquisition of Nurse Care,  Inc. and its  wholly-owned  subsidiary,  New England
Home Care,  Inc.,  is an  example of the  Registrant's  commitment  to  devoting
significant  resources  to the  expansion  of home  health  care  services.  See
"Business -- New England Home Care."

     Cost of revenue as a percentage of revenue was 61% for both fiscal 1995 and
1994. In preparation for becoming preferred providers for new managed care plans
in Florida,  the Registrant  increased its medical provider costs in fiscal 1995
in expectation of securing  additional  managed care revenues.  The increase was
less than  expectated,  resulting in a higher cost of revenue as a percentage of
revenues from those operations.  However, this higher percentage was offset by a
decline in the cost of revenue as a percentage of revenues from home health care
operations.  General and administrative  expenses increased to 29% of revenue in
fiscal  1995 from 28% of  revenue  in  fiscal  1994.  This  slight  increase  is
primarily  attributable to the added  operating costs of the outpatient  medical
centers.

     Interest income increased  approximately $249,000 or 155% from the previous
fiscal year.  This increase is attributable to interest earned on both the notes
receivable  from Boro Medical and the federal income tax refund  received in the
current fiscal year of approximately $2,100,000 as a result of carryback claims.

     The Registrant's  effective tax rate decreased to approximately  44% in the
current  fiscal  year as  compared  to 47% in the  previous  fiscal  year.  This
decrease is primarily attributable to federal income tax credits utilized in the
current fiscal year.

     As a result of the  foregoing,  net  income for fiscal  1995  increased  to
$1,426,000 from $1,218,000 for fiscal 1994.

YEAR ENDED JULY 31, 1994 COMPARED TO YEAR ENDED JULY 31, 1993
-------------------------------------------------------------

     Revenues  increased by approximately  $2,057,000,  or 11%, from $18,059,000
for the fiscal  year ended July 31,  1993  ("fiscal  1993") to  $20,116,000  for
fiscal  1994.   Health   Acquisition   Corp.,   the  subsidiary   that  provides
paraprofessional home health care services accounted for $1,759,000,  or 85%, of
the increase in revenues.  This increase is attributable  to Health  Acquisition
Corp.  securing six (6) new provider  contracts  from certified home health care
agencies and other long-term  provider  programs,  as well as additional  volume
with existing  contracts.  Revenues from Brevard Medical Center,  the subsidiary
that operates outpatient




                                      -13-

<PAGE>



medical centers in Brevard County, Florida, increased approximately $116,000, or
3%, from the previous  fiscal year.  This  increase is  attributable  to Brevard
Medical Center securing additional revenue from preferred provider  arrangements
offset by the decrease in fee-for-service  revenue.  As the health care industry
has been changing  towards a managed care network,  Brevard  Medical  Center has
secured  additional  prepaid  or  capitation  revenue by  becoming  a  preferred
provider for various health care alliances. It expects this trend to continue in
the future.  In addition,  in May 1994,  the  Registrant  through a wholly-owned
subsidiary,  First Health,  commenced operations in Volusia County, Florida with
the acquisition of certain assets of three outpatient medical centers.  Revenues
for the three months were approximately $182,000. Currently, the major source of
revenue is from a large health maintenance  organization,  to which First Health
is a preferred provider.

     Cost of revenue as a percentage of revenue was 61% for both fiscal 1994 and
1993. In fiscal 1994, general and administrative expenses increased by $868,000,
or 18%,  from  fiscal  1993 as a result  of the  expansion  of the  Registrant's
outpatient medical center operations and the opening of three additional offices
in Florida of $279,000,  additional  administrative  support  services of Health
Acquisition Corp. of $389,000 and non-recurring legal fees of $200,000.

     Interest income increased  approximately  $45,000, or 38%, from $116,000 in
fiscal  1993 to  $161,000  in  fiscal  1994 as a result of an  increase  in cash
provided by operating activities.

     As a result of the  foregoing,  net  income for fiscal  1994  decreased  to
$1,218,000 from $1,309,000 for fiscal 1993.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
----------------------------------------------------

     At July 31, 1995 and prior to the  acquisition of Nurse Care,  Inc. and New
England Home Care,  Inc., as described below, the Registrant had working capital
of $15,306,000  as compared to working  capital of $13,484,000 at July 31, 1994.
The  Registrant  has  historically  financed  its working  capital  requirements
through cash flow from operating activities.

     Net cash provided by operating activities was $3,526,000 for fiscal 1995 as
compared to $2,855,000 for fiscal 1994. This increase was primarily attributable
to the decrease in income taxes  receivable  of  $2,553,000,  as a result of the
refund on tax carryback  claims,  offset by the state income tax provision which
used $300,000 of cash, an increase in accounts receivable which used $688,000 of
cash,  (as a result of the  increase  in  revenues)  and an  increase in prepaid
expenses  and other  assets  which used cash of  $130,000  of cash,  principally
resulting from the payment of legal fees in connection  with the  acquisition of
Nurse Care, Inc.

     In fiscal 1995, the Registrant generated $681,000 from investing activities
as a result of the sale of  investments,  that were  converted to highly  liquid
investments  which  resulted in  $1,000,000  in  proceeds  and was offset by the
purchase of assets of  businesses  of $225,000 and the purchase of furniture and
equipment  of  $94,000.  In fiscal  1994,  the  Registrant  used  $1,262,000  in
investing activities as a result of the purchase



                                      -14-

<PAGE>



of investments of $865,000,  the purchase of assets of business of $147,000, the
purchase of furniture  and  equipment  of $76,000 and cash used by  discontinued
operations of $174,000.

     In fiscal 1995, the Registrant  generated $13,000 from financing activities
as a result of principal  payments  received on notes receivable of $243,000 and
the proceeds  from the exercise of stock  options of $8,000,  offset by the cash
used for the principal  payments under  capitalized lease obligations of $30,000
and the purchase of treasury shares of $208,000.  In fiscal 1994, the Registrant
used $40,000 in financing  activities  as a result of principal  payments  under
capitalized lease obligations.

     A  majority  of the  Registrant's  business  (home  health  care  services)
requires  weekly  payments to health care  personnel  at the time  services  are
rendered. Payment for these services is typically on a contracted basis of 90 to
120 days.  However,  reimbursement  for the other  portion  of the  Registrant's
business  (outpatient  medical  services) is received  each month in the form of
capitation  payments.  Accounts receivable  represented 33% of current assets at
both July 31,  1995 and July 31,  1994.  See "Notes to  Financial  Statements  -
Acquisitions."  For the  fiscal  year ended July 31,  1995  accounts  receivable
turnover decreased to 79 days from 88 days in the previous fiscal year.

     The Registrant  has available a $2,000,000  secured line of credit with its
bank at the  alternate  base  commercial  lending rate of the bank.  The line of
credit expires November 30, 1995 and is subject to renewal. As of July 31, 1995,
the Registrant had no outstanding balance under the line of credit.

     The Registrant intends to meet both its short and long term liquidity needs
with its current cash  balances,  cash flow and  available  line of credit.  The
acquisition  on August 4, 1995 of Nurse Care,  Inc.  and New England  Home Care,
Inc. for $3,150,000 was made in cash generated from internal funds. In addition,
New England Home Care,  Inc. is currently  seeking to secure a line of credit to
finance its own accounts receivable.

     The  Internal  Revenue  Service  (the  "IRS") is  currently  conducting  an
examination  of the Federal Tax Return  filed by the  Registrant  for the fiscal
year ended July 31, 1993.  The  Registrant  has been advised that it is standard
procedure  for refund claims in excess of $1,000,000 to be reviewed by the IRS's
Joint  Committee  on Taxation  after the IRS has  conducted  an  examination  to
determine  that the refund amount is correct.  Therefore,  since the  Registrant
received a refund claim  approximating  $2,100,000  as a result of net operating
loss carryback claims relating to the fiscal year ended July 31, 1994, the years
affected by the  carryback  (fiscal  years ended July 31, 1991 through 1994) are
now being examined. No assessment has been made to date.

IMPACT OF INFLATION
-------------------
     The impact of inflation on the Registrant was not material  during the year
ended July 31, 1995.





                                      -15-

<PAGE>


ECONOMIC OUTLOOK
----------------

     The home health  care  industry  has become  increasingly  competitive  and
management believes this trend will continue in the future. This competition has
lead to mergers between large well  diversified  home health care companies over
the past  year.  Further,  such  companies  have  more  acquisition  and  growth
opportunities available to them.  Additionally,  there is tremendous competition
for qualified  personnel in the home health care industry.  Management  believes
that it  offers  competitive  salaries  and  benefit  packages.  There can be no
assurance,  however,  that the  Registrant  will be successful in attracting and
retaining  qualified  personnel.  If  unsuccessful,  this  could have a material
adverse effect on the Registrant's business.

     There is also  increased  competition  in Florida where the Registrant is a
provider  of  out-patient  medical  services.   Competition  comes  from  health
maintenance   organizations,   independent   doctors'  offices  and  out-patient
satellite  offices of  hospitals  which  have  established  networks  of medical
treatment offices. In addition,  as the delivery of medical services has shifted
to a managed care system,  there is increased  competition in becoming preferred
providers  for many of the new  health  care  alliances  that are being  formed.
Furthermore,  there  is  tremendous  competition  in  recruiting  and  retaining
qualified Board Certified  primary care physicians.  Primary care physicians are
the  gatekeepers  in a  managed  care  network  and are  vital in  securing  and
maintaining  managed  care  contracts.  If the  Registrant  is  unsuccessful  in
attracting  and  retaining  such  physicians,  it could have a material  adverse
effect on the Registrant's business.

     Other than as set forth herein, the Registrant has no material  commitments
for capital expenditures as of July 31, 1995.

     In the  opinion  of  management  there  will be no  material  impact on the
financial  statements  of the  Registrant  from any recently  issued  accounting
standards.



                                      -16-

<PAGE>




ITEM 3. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a)  The  following  represents  a  listing  of all  financial  statements,
financial statement schedules and exhibits filed as part of this Report.

     (1)  Financial   Statements  (see  index  to  the  consolidated   financial
          statements).

     (2)  Financial Statement Schedules (see index to the consolidated financial
          statements).

     (3)  Exhibits

Exhibit
Number        Exhibit to this Report                  Method of Filing
-------       ----------------------                  ----------------

3.1           Certificate of Incorporation            Incorporated by
              of the Registrant                       reference to Exhibit
                                                      3(a) to Registration
                                                      Statement on Form S-1
                                                      (No. 2-86643) filed
                                                      September 20, 1983 (the
                                                      "1983 Registration
                                                      Statement").

3.2           Certificate of Amendment                Incorporated by
              to Certificate of                       reference to Exhibit 3.2
              Incorporation of the                    to the Registrant's
              Registrant                              Annual Report on Form
                                                      10-K for the year ended
                                                      July 31, 1992 (the "1992
                                                      Form 10-K").

3.3           By-Laws of the Registrant               Incorporated by
                                                      reference to Exhibit
                                                      4(a) to the 1983
                                                      Registration Statement.

4.1           Specimen Stock Certificate              Incorporated by
                                                      reference to Exhibit
                                                      4(a) to the 1983
                                                      Registration Statement.


                                      -17-

<PAGE>



Exhibit
Number        Exhibit to this Report                  Method of Filing
-------       ----------------------                  ----------------

10.1          1992 Stock Option Plan of               Incorporated by
              the Registrant                          reference to Exhibit
                                                      10.1 to the Registrant's
                                                      Annual Report on Form
                                                      10-K for the year ended
                                                      July 31, 1993 (the "1993
                                                      Form 10-K").

10.2          Incentive Stock Option Plan             Incorporated by
              of the Registrant                       reference to Exhibit
                                                      10(b) to the 1983
                                                      Registration Statement.

10.3         Agreement between Allen                  Incorporated by reference
             Health Care Services                     to Exhibit 10.3 to the
             and VNS Home Care dated                  Registrant's Annual Report
             January 1, 1994                          on Form 10-K forthe fiscal
                                                      year ended July 31, 1994
                                                      (the "1994 Form 10-K").

10.4         Agreement between Boro                   Incorporated by
             Medical Corp. and Brevard                reference to Exhibit
             Medical Center dated                     10.25 to the
             September 11, 1991                       Registrant's Annual
                                                      Report on Form 10-K for
                                                      the year ended July 31,
                                                      1991 (the "1991 Form
                                                      10-K").

10.5          Employment Agreement                    Incorporated by
              between the Registrant                  reference to Exhibit 10.7
              and Steven Fialkow                      to the 1993 Form 10-K.
              dated August 1993

10.6          Employment Agreement                    Incorporated by
              between the Registrant                  reference to Exhibit 10.8
              and Richard Garofalo                    to the 1993 Form 10-K.
              dated August 1993






                                      -18-

<PAGE>

Exhibit
Number        Exhibit to this Report                  Method of Filing
-------       ----------------------                  ----------------

10.7          Employment Agreement                    Incorporated by
              between the Registrant                  reference to Exhibit 10.9
              and Gerald Kline                        to the 1993 Form 10-K.
              dated August 1993

10.8          Employment Agreement                    Incorporated by
              between the Registrant                  reference to Exhibit
              and Thomas Smith                        10.10 to the 1993 Form
              dated August 1993                       10-K.

10.9          Employment Agreement between            Incorporated by reference
              the Registrant and Robert               to Exhibit 10.9 to the 
              Heller dated August 1994                1994 Form 10-K.

10.10         Agreement between Division              Incorporated by
              of Social Services of                   reference to Exhibit
              County of Suffolk and                   10.35 to the 1991 Form
              Health Acquisition Corp.                10-K.
              d/b/a A Round The Clock
              Temporary Services

10.11         Agreement between Nassau                Incorporated by reference
              County Department of Social             to Exhibit 10.9 to the
              Care Services and Allen Health          1992 Form 10-K.
              Care Services

10.12         Agreement between Catholic              Incorporated by reference
              Medical Center of Brooklyn              to Exhibit 10.14 to the
              and Queens, Inc. on behalf              1994 Form 10-K.
              of Mary Immaculate
              Hospital Home Health
              Agency and Allen Health
              Care Services, dated
              January 1, 1994


                                      -19-

<PAGE>

Exhibit
Number        Exhibit to this Report                  Method of Filing
-------       ----------------------                  ----------------

10.13         Letter Agreement dated                  Previously filed.
              March 15, 1995 securing
              line of credit from the
              Bank of New York

10.14         Letter dated June 1, 1992               Incorporated by reference
              from Public Health Council              to Exhibit 10.13 to the
              of the State of New York                1992 Form 10-K.
              Department of Health to
              Health Acquisition Corp.
              d/b/a Allen Health Care
              Services

10.15         Employment Agreement                    Incorporated by
              between the Registrant                  reference to Exhibit
              and Frederick H. Fialkow                10.20 to the 1993
              dated April 30, 1993;                   Form 10-K.
              First Amendment to
              Employment Agreement
              dated August 1, 1993

10.16         Letter from Joint Commission            Incorporated by
              on Accreditation of                     reference to Exhibit
              Healthcare Organizations                10.24 to the 1993
              awarding accreditation to               Form 10-K.
              Allen Health Care,
              dated September 20, 1993

10.17         1993 401(k) Plan                        Incorporated by
              of the Registrant                       reference to Exhibit
                                                      10.25 to the 1993
                                                      Form 10-K.

10.18         Letter Agreement between                Incorporated by
              National HMO (New York),                reference to Exhibit
              Inc. and Boro Medical,                  10.26 to the 1993
              P.C. dated November 12,                 Form 10-K.
              1993



                                      -20-

<PAGE>



Exhibit
Number        Exhibit to this Report                  Method of Filing
-------       ----------------------                  ----------------

10.19         Asset Purchase Agreement                Incorporated by reference
              among National HMO (New                 to Exhibit 10.24 to the
              York), Inc., National HMO               1994 Form 10-K.
              Corp. of Elizabeth, Inc.,
              Boro Medical, P.C. and Boro
              Health Care of Union, P.C.
              dated April 30, 1994

10.20         Asset Purchase Agreement                Incorporated by reference
              between First Health, Inc.              to Exhibit 10.25 to the
              and Healthmark P.A. and                 1994 Form 10-K.
              Cesar N. Abiera, Jr., M.D.
              dated April 29, 1994

10.21         Asset Purchase Agreement                Incorporated by reference
              between First Health, Inc. and          to Exhibit 10.26 to the
              Atlantic Medical Associates,            1994 Form 10-K.
              P.A. and Ernest Cook, Jr.,
              M.D. dated June 1, 1994

10.22         Agreement for the Purchase of           Incorporated by reference
              the Stock of Nurse Care, Inc.           to Exhibit 10.1 to the
              and Related Transactions                Registrant's Current 
                                                      Report on Form 8-K dated
                                                      August 4, 1995.

10.23         Employment Agreement between            Incorporated by reference
              New England and Aileen                  to Exhibit 10.2 to the
              O'Connell dated as of                   Registrant's Current
              August 1, 1995                          Report on Form 8-K dated
                                                      August 4, 1995.

10.24         Form of Employment Agreement            Previously filed.
              between Brevard Medical Center, Inc.
              and Warren D. Stowell dated as of
              November 1, 1995

22.1          List of Subsidiaries                    Previously filed.

23.1          Consent of Richard A. Eisner & Co.      Filed herewith.


     (b)  Reports  on Form 8-K.  None have been  filed  during  the last  fiscal
quarter.



                                      -21-


<PAGE>
                         NATIONAL HOME HEALTH CARE CORP.

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

            FILED WITH THE ANNUAL REPORT OF THE COMPANY ON FORM 10-K



PART II ITEM 8:

   REPORT OF INDEPENDENT AUDITORS                              F- 2

   CONSOLIDATED BALANCE SHEETS AS AT JULY 31, 1995
   AND 1994                                                    F- 3

   CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
   YEARS ENDED JULY 31, 1995, 1994 AND 1993                    F- 4

   CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
   EQUITY FOR THE YEARS ENDED JULY 31, 1995, 1994
   AND 1993                                                    F- 5

   CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS
   ENDED JULY 31, 1995, 1994 AND 1993                          F- 6

   NOTES TO FINANCIAL STATEMENTS                               F- 7

PART IV ITEM 14:

   REPORT OF INDEPENDENT AUDITORS ON SCHEDULE                  F-21

   II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS
        ENDED JULY 31, 1995, 1994 AND 1993                     F-22

Schedules Omitted

Other  schedules have been omitted as the conditions  requiring their filing are
not present or the information  required  therein has been included in the notes
to consolidated financial statements.



                                       F-1

<PAGE>



                         REPORT OF INDEPENDENT AUDITORS



Board of Directors and Stockholders
National Home Health Care Corp.
Scarsdale, New York


     We have audited the  accompanying  consolidated  balance sheets of National
Home Health Care Corp. and  subsidiaries  as at July 31, 1995 and July 31, 1994,
and the related consolidated statements of operations,  changes in stockholders'
equity and cash flows for each of the years in the three-year  period ended July
31, 1995.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial  statements  enumerated above present fairly,
in all material respects,  the consolidated  financial position of National Home
Health Care Corp. and  subsidiaries  at July 31, 1995 and July 31, 1994, and the
consolidated  results of their operations and their  consolidated cash flows for
each of the years in the  three-year  period ended July 31, 1995,  in conformity
with generally accepted accounting principles.





New York, New York
October 6, 1995

                                       F-2

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                                  Pro Forma                    July 31,
                                                                                   July 31,          ----------------------------
                     A S S E T S                                                     1995              1995                1994
                     -----------                                                    ------            ------              ------
                                                                                   (Note 1)
                                                                                 (Unaudited)
Current assets:
<S>                                                                             <C>               <C>                 <C> 
   Cash (including cash equivalents of $5,272,000 (pro forma), $8,422,000
     and $4,568,000) (Note 10) . . . . . . . . . . . . . . . . . . . . . . .     $ 6,704,000       $ 9,237,000         $ 5,017,000
   Investments - available for sale. . . . . . . . . . . . . . . . . . . . .         813,000           813,000           1,553,000
   Accounts receivable - (less allowance for doubtful accounts of $439,000
     (pro forma), $99,000 and $84,000) (Note 10) . . . . . . . . . . . . . .       8,266,000         5,338,000           4,823,000
   Notes receivable (Note 3) . . . . . . . . . . . . . . . . . . . . . . . .         349,000           349,000             271,000
   Income taxes receivable (Note 7). . . . . . . . . . . . . . . . . . . . .         352,000            72,000           2,625,000
   Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . .         298,000           354,000             193,000
   Deferred taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         190,000            80,000             200,000
                                                                                ------------      ------------         -----------

          Total current assets . . . . . . . . . . . . . . . . . . . . . . .      16,972,000        16,243,000          14,682,000

Furniture, equipment and leasehold improvements (Notes 1 and 2). . . . . . .         510,000           445,000             512,000
Notes receivable - noncurrent (Note 3) . . . . . . . . . . . . . . . . . . .         690,000           690,000           1,011,000
Investment in certificate of deposit . . . . . . . . . . . . . . . . . . . .                                               260,000
Excess of cost over fair value of net assets of
   businesses acquired (Notes 1 and 4) . . . . . . . . . . . . . . . . . . .       2,905,000         1,036,000           1,073,000
Other intangible assets (Note 5) . . . . . . . . . . . . . . . . . . . . . .         342,000           342,000             248,000
Deposits and other assets. . . . . . . . . . . . . . . . . . . . . . . . . .         116,000           109,000             140,000
                                                                                ------------      ------------         -----------

          T O T A L. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $21,535,000       $18,865,000         $17,926,000
                                                                                ============      ============         ===========


              LIABILITIES AND STOCKHOLDERS' EQUITY
              ------------------------------------

Current liabilities:
   Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . .     $ 1,708,000       $   910,000         $   867,000
   Capital lease obligations - current (Note 6). . . . . . . . . . . . . . .          27,000            27,000              31,000
   Reserve for state income tax settlement (Note 9). . . . . . . . . . . . .                                               300,000
   Estimated third-party payor settlements . . . . . . . . . . . . . . . . .       1,872,000
                                                                                ------------      ------------         -----------

          Total current liabilities. . . . . . . . . . . . . . . . . . . . .       3,607,000           937,000           1,198,000

Capital lease obligations - noncurrent (Note 6). . . . . . . . . . . . . . .          14,000            14,000              40,000
                                                                                ------------      ------------         -----------

          Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . .       3,621,000           951,000           1,238,000
                                                                                ------------      ------------         -----------

Commitments, contingencies and other matters (Notes 9 and 12)

Stockholders' equity (Note 11):
   Common stock, $.001 par value; authorized 20,000,000 shares, issued
     5,673,075 (pro forma), 5,673,075 and 5,670,075 shares . . . . . . . . .           6,000             6,000               6,000
   Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . .      15,552,000        15,552,000          15,544,000
   Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . .       3,307,000         3,307,000           1,881,000
                                                                                ------------      ------------         -----------

                                                                                  18,865,000        18,865,000          17,431,000
   Less treasury stock (955,000 (pro forma), 955,000 and
     891,000 shares) - at cost . . . . . . . . . . . . . . . . . . . . . . .        (951,000)         (951,000)           (743,000)
                                                                                ------------      ------------        ------------

          Total stockholders' equity . . . . . . . . . . . . . . . . . . . .      17,914,000        17,914,000          16,688,000
                                                                                ------------      ------------        ------------

          T O T A L. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $21,535,000       $18,865,000         $17,926,000
                                                                                ============      ============         ===========
</TABLE>


                 See accompanying notes to financial statements.


                                       F-3

<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                 Year Ended July 31,
                                   ----------------------------------------------
                                       1995             1994             1993
                                   ------------     ------------     ------------
<S>                                 <C>              <C>              <C>        
Revenue:
   Net patient fee income
      (Note 10) . . . . . . . .     $24,556,000      $20,116,000      $18,059,000
                                   ------------     ------------     ------------

Operating expenses:
   Cost of revenue. . . . . . .      15,032,000       12,178,000       10,849,000
   General and administrative .       7,213,000        5,618,000        4,750,000
   Amortization of intangibles.         169,000          186,000          196,000
                                   ------------     ------------     ------------

          Total operating
            expenses. . . . . .      22,414,000       17,982,000       15,795,000
                                   ------------     ------------     ------------

Income from operations. . . . .       2,142,000        2,134,000        2,264,000

Interest income . . . . . . . .         410,000          161,000          116,000
                                   ------------     ------------     ------------

Income from continuing
   operations before taxes. . .       2,552,000        2,295,000        2,380,000

Provision for income taxes
   (Note 9) . . . . . . . . . .       1,126,000        1,077,000        1,071,000
                                   ------------     ------------     ------------

Income from continuing
   operations . . . . . . . . .       1,426,000        1,218,000        1,309,000
                                   ------------     ------------     ------------

Discontinued operations (Note 7):
     Income (loss) from
       operations (net of
       income taxes of $40,000
       and $290,000). . . . . .                          (32,000)          53,000

     Loss on disposals (net of
       income tax benefit of
       $2,734,000 in 1994 and
       deferred income tax
       benefit of $319,000)
       in 1993) . . . . . . . .                       (3,440,000)        (514,000)
                                                    ------------     ------------

          T o t a l . . . . . .                       (3,472,000)        (461,000)
                                                    ------------     ------------

NET INCOME (LOSS) . . . . . . .     $ 1,426,000      $(2,254,000)     $   848,000
                                   ------------     ------------     ------------

Net income (loss) per share of
 common stock (Note 1):
     Continuing operations. . .            $.30            $ .26            $ .27
     Discontinued operations. .                             (.73)            (.09)
                                   ------------     ------------     ------------

     Net income (loss). . . . .            $.30            $(.47)           $ .18
                                   ============     ============     ============
</TABLE>

                 See accompanying notes to financial statements.

                                       F-4

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>

                                                  Common Stock                                          Treasury Stock
                                             ---------------------     Additional                    ---------------------
                                             Number of                   Paid-In        Retained    Number of
                                               Shares       Amount       Capital        Earnings     Shares        Cost
                                             ----------    -------    ------------    -----------    -------     ---------
<S>                                           <C>           <C>        <C>            <C>            <C>         <C>       
Balance at July 31, 1992. . . . . . . . . .   5,670,075     $6,000     $15,544,000    $ 3,287,000    891,000     $(743,000)


Net income. . . . . . . . . . . . . . . . .                                               848,000
                                             ----------    -------    ------------    -----------    -------     ---------


Balance at July 31, 1993. . . . . . . . . .   5,670,075      6,000      15,544,000      4,135,000    891,000      (743,000)


Net (loss). . . . . . . . . . . . . . . . .                                            (2,254,000)
                                             ----------    -------    ------------    -----------    -------     ---------


Balance at July 31, 1994. . . . . . . . . .   5,670,075      6,000      15,544,000      1,881,000    891,000      (743,000)


Net income. . . . . . . . . . . . . . . . .                                             1,426,000

Acquisition of treasury shares, $3.25
   per share. . . . . . . . . . . . . . . .                                                           64,000      (208,000)


Exercise of common stock options. . . . . .       3,000                      8,000
                                             ----------    -------    ------------    -----------    -------     ---------


BALANCE AT JULY 31, 1995. . . . . . . . . .   5,673,075     $6,000     $15,552,000    $ 3,307,000    955,000     $(951,000)
                                             ----------    -------    ------------    -----------    -------     ---------
</TABLE>


                 See accompanying notes to financial statements.


                                       F-5

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                                            Year Ended July 31,
                                                                               -----------------------------------------------
                                                                                  1995              1994              1993
                                                                               -----------      ------------       -----------
<S>                                                                            <C>               <C>               <C>        
Cash flows from operating activities:
   Income from continuing operations . . . . . . . . . . . . . . . . . . . .   $ 1,426,000       $ 1,218,000       $ 1,309,000
   Adjustments to reconcile income from continuing operations to net
     cash provided by operating activities:
       Depreciation and amortization . . . . . . . . . . . . . . . . . . . .       329,000           327,000           304,000
       (Settlement) provision for state income taxes . . . . . . . . . . . .      (300,000)           50,000
       Provision for doubtful accounts . . . . . . . . . . . . . . . . . . .       173,000           141,000            76,000
       Deferred tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . .       120,000           (20,000)          (14,000)
       Changes in operating assets and liabilities:
         (Increase) decrease in management fee receivable. . . . . . . . . .                         (52,000)           22,000
         (Increase) in accounts receivable . . . . . . . . . . . . . . . . .      (688,000)         (323,000)       (1,141,000)
         (Increase) in prepaid expenses and other assets . . . . . . . . . .      (130,000)         (146,000)          (56,000)
         Increase (decrease) in accounts payable, accrued expenses and
           other liabilities . . . . . . . . . . . . . . . . . . . . . . . .        43,000           230,000           (97,000)
         (Increase) decrease in income taxes receivable/payable. . . . . . .     2,553,000           445,000          (455,000)
         Cash provided by discontinued operations. . . . . . . . . . . . . .                         985,000           832,000
                                                                               -----------      ------------       -----------
           Net cash provided by operating activities . . . . . . . . . . . .     3,526,000         2,855,000           780,000
                                                                               -----------      ------------       -----------

Cash flows from investing activities:
   Purchase of furniture, equipment and leasehold improvements . . . . . . .       (94,000)          (76,000)          (81,000)
   Proceeds (purchase) of investments. . . . . . . . . . . . . . . . . . . .     1,000,000          (865,000)         (250,000)
   Purchase of assets of businesses. . . . . . . . . . . . . . . . . . . . .      (225,000)         (147,000)
   Cash (used) by discontinued operations. . . . . . . . . . . . . . . . . .                        (174,000)          (34,000)
                                                                               -----------      ------------       -----------
           Net cash provided by (used in) investing activities . . . . . . .       681,000        (1,262,000)         (365,000)
                                                                               -----------      ------------       -----------

Cash flows from financing activities:
   Decrease in notes receivable. . . . . . . . . . . . . . . . . . . . . . .       243,000
   Principal payments under capital lease obligations. . . . . . . . . . . .       (30,000)          (40,000)          (24,000)
   Purchase of treasury shares . . . . . . . . . . . . . . . . . . . . . . .      (208,000)
   Payments under capital lease obligations by discontinued operations . . .                                           (21,000)
   Proceeds from exercise of stock options . . . . . . . . . . . . . . . . .         8,000
                                                                               -----------      ------------       -----------
           Net cash provided by (used in) financing activities . . . . . . .        13,000           (40,000)          (45,000)
                                                                               -----------      ------------       -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . . . . . . . . . . .     4,220,000         1,553,000           370,000
Cash and cash equivalents - beginning of year *. . . . . . . . . . . . . . .     5,017,000         3,464,000         3,094,000
                                                                               -----------      ------------       -----------

CASH AND CASH EQUIVALENTS - END OF YEAR. . . . . . . . . . . . . . . . . . .    $9,237,000       $ 5,017,000       $ 3,464,000
                                                                               -----------      ------------       -----------

Supplemental  disclosures  of cash flow  information:
  Cash paid during the year for:
     Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $   13,000       $    12,000       $    25,000
     Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       618,000           651,000         1,562,000

</TABLE>

*  Includes cash of discontinued operations in 1994 and 1993.


                 See accompanying notes to financial statements.

                                       F-6

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 1) - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
           POLICIES AND ACQUISITION:

     [a] Nature of business and acquisition:


     National  Home Health Care Corp.  and  subsidiaries  (the  "Company")  is a
provider of home health care services and outpatient medical services.

     On August 4, 1995,  the  Company  acquired  all of the  outstanding  common
shares of Nurse Care,  Inc., the parent  company of New England Home Care,  Inc.
(New  England).  New England is a licensed  Medicare  certified home health care
agency  providing  services in Fairfield and New Haven  counties in the State of
Connecticut. The purchase price of $3,150,000 was generated from internal funds.
The  acquisition  will be  accounted  for as a  purchase  and the  excess of the
purchase price over the fair value of the assets acquired,  $1,869,000,  will be
allocated to goodwill.

     The  following  unaudited  pro forma  consolidated  statement of operations
information  gives effect to the  acquisition  described  above as though it had
occurred  on  August 1,  1994,  after  giving  effect  to  certain  adjustments,
including  amortization  of goodwill of $93,000,  decrease in interest income of
$189,000,  elimination of former shareholder  compensation of $250,000,  benefit
from  additional  third-party  reimbursement  of  $200,000  and income  taxes of
$104,000.  The unaudited pro forma  financial  information  may not  necessarily
reflect the results of operations  that would have occurred had the  acquisition
occurred on August 1, 1994.

                                                        Unaudited

            Patient fee income . . . . . . . . . . .  $ 40,547,000
            Operating expenses . . . . . . . . . . .   (37,777,000)

            Income from continuing operations. . . .  $  2,770,000

            Net income . . . . . . . . . . . . . . .  $  1,632,000
                                                      ============

            Net income per share . . . . . . . . . .      $.34
                                                          ====
     The unaudited pro forma  balance sheet gives effect to the  acquisition  as
though it had  occurred on July 31, 1995,  after  giving  effect to the purchase
price of  $3,150,000,  estimated  costs of the  acquisition  of $63,000  and the
excess of purchase price over the fair value of assets acquired of $1,869,000.

(continued)


                                       F-7

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 1) - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
           POLICIES:  (continued)

     [b] Principles of consolidation:

     The consolidated financial statements include the accounts of National Home
Health  Care  Corp.  and  its  wholly  owned   subsidiaries.   All   significant
intercompany  accounts and transactions have been eliminated in the consolidated
financial statements.

     [c] Revenue recognition:

     Net patient fee income represents the estimated net realizable amounts from
third  party  payors  and  patients.  Certain  revenues  are  based  on  a  cost
reimbursement program and are subject to retroactive adjustment.  In the opinion
of  management,  retroactive  adjustments,  if any, would not be material to the
financial position or results of operations of the Company.

     [d] Cash equivalents:

     For the purposes of the statements of cash flows, the Company considers all
highly liquid investment  instruments  purchased with a maturity of three months
or less to be cash equivalents.

     [e] Furniture, equipment and leasehold improvements:

     Furniture,  equipment  and  leasehold  improvements  are  stated  at  cost.
Depreciation  is being provided on the  straight-line  method over the estimated
useful  lives of the  assets  (generally  five to ten  years).  Amortization  of
leasehold  improvements is being provided on the  straight-line  method over the
various lease terms or estimated useful lives, if shorter.

     [f] Excess of cost over fair value of net assets of business acquired:

     The excess of cost over the fair value of net assets acquired (goodwill) is
principally being amortized over a period of 40 years on a straight-line  basis.
Goodwill is  evaluated  periodically  and adjusted if  necessary,  if events and
circumstances  indicate  that a  permanent  decline in value  below the  current
unamortized historical cost has occurred.

(continued)


                                       F-8

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 1) - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
           POLICIES:  (continued)

     [g] Earnings per common share:

     Earnings per common share are computed using the weighted average number of
common shares and dilutive common stock equivalents (options) outstanding during
each period.  During the three years ended July 31,  1995,  the options were not
dilutive. The number of shares used in the calculation of earnings per share are
4,760,705  for the year ended July 31,  1995 and  4,779,075  for the years ended
July 31, 1994 and July 31, 1993.

     [h] Investments:

     During  1995,  the  Company  adopted  Statement  of  Financial   Accounting
Standards  No.  115,  "Accounting  for  Certain  Investments  in Debt and Equity
Securities"  which  requires  that,  except for debt  securities  classified  as
"held-to  maturity  securities",  investments  in debt and equity  securities be
reported at fair value.  Its  implementation  had no  significant  effect on the
results of operations of the Company.

     Investment securities available for sale at July 31, 1995 are summarized as
follows:
                                                                Amortized
                                                                 Cost (1)
                                                                ---------

            Certificate of deposit, maturing within one year .  $260,000
            Floating rate debentures issued by New York
               State, maturing in one to five years. . . . . .   160,000
            Floating rate debentures issued by New York
               State, maturing in five to ten years. . . . . .   180,000
            Floating rate debentures issued by New York
               State, maturity after ten years . . . . . . . .   195,000
            Other. . . . . . . . . . . . . . . . . . . . . . .    18,000
                                                                --------
                                                                $813,000
                                                                ========
     (1)  Amortized cost  approximates  market value.  Accordingly,  there is no
          unrealized holding gain or loss.

     There  were no  significant  realized  gains or  losses  from the  sales of
available-for-sale  securities in 1993, 1994 and 1995. Proceeds from the sale of
available-for-sale  securities in 1995 was $1,000,000.  Realized gain or loss is
determined on a specific identification basis.

(continued)


                                       F-9

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 1) - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
           POLICIES:  (continued)

     [i] Reclassifications:

     Certain  items  in  the  1993  and  1994  financial  statements  have  been
reclassified to conform to the 1995 presentation.


(NOTE 2) - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS:

     Furniture,  equipment and leasehold improvements are stated at cost and are
summarized as follows:
                                                      July 31,
                                                 1995         1994

            Equipment, furniture and fixtures . . .  $1,562,000   $1,475,000
            Leasehold improvements. . . . . . . . .     368,000      362,000
                                                     ----------   ----------
                                                      1,930,000    1,837,000
            Less accumulated depreciation and
               amortization . . . . . . . . . . . .   1,485,000    1,325,000
                                                     ----------   ----------

                      B a l a n c e . . . . . . . .  $  445,000   $  512,000
                                                     ==========   ==========

The net book value of furniture  and  equipment  held under  capital  leases was
$79,000  and  $126,000  at July  31,  1995  and  July  31,  1994,  respectively.
Depreciation expense includes depreciation on assets held under capital leases.


(NOTE 3) - NOTES RECEIVABLE:

     In April 1994,  as a result of the sale of assets  discussed in Note 7, the
Company  received  promissory  notes  aggregating  $750,000.  The  Company  also
received a  promissory  note for  $500,000  for the balance of  management  fees
previously due it. The notes bear interest at 7% and principal  payments are due
in equal  monthly  installments  over 30 months (for the  $500,000  note) and 66
months (for the  $750,000  notes),  beginning  November 1, 1994.  The  aggregate
principal  balance  of the notes at July 31,  1995 and July 31,  1994  amount to
$1,025,000  and  $1,250,000,  respectively,  $336,000  and  $252,000 of which is
included  as current in the balance  sheet at July 31,  1995 and July 31,  1994,
respectively.  The notes are  collateralized  by all present and future personal
property of the payor.





(continued)


                                      F-10

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 4) - EXCESS OF COST OVER FAIR VALUE:

            Changes  in the  excess  of cost over  fair  value of net  assets of
businesses  acquired and discontinued during the three years ended July 31, 1995
are as follows:

                                       Year Ended July 31,
                              --------------------------------------
                                  1995         1994         1993
                              -----------  ------------  -----------
Balance - beginning of
   year. . . . . . . . . . .  $1,073,000   $ 6,868,000   $7,102,000
Consideration for
   acquisition . . . . . . .                     5,000
Write-off due to
   discontinued operations .                (5,671,000)     (12,000)
Amortization . . . . . . . .     (37,000)     (129,000)    (222,000)
                              -----------  ------------  -----------

Balance - end of year. . . .  $1,036,000   $ 1,073,000   $6,868,000
                              ===========  ============  ==========


(NOTE 5) - OTHER INTANGIBLE ASSETS:

     Other intangible assets are as follows:

                                                  July 31,
                                               1995       1994

     Covenants not to compete. . . . . . .  $485,000   $ 285,000
     Personnel files . . . . . . . . . . .   478,000     453,000
     Other . . . . . . . . . . . . . . . .     2,000       2,000
                                            ---------  ---------

                                             965,000     740,000
     Less accumulated amortization . . . .   623,000     492,000
                                            ---------  ---------

                                            $342,000   $ 248,000
                                            =========  =========

     Other intangible  assets increased during fiscal 1995 and 1994 primarily as
a result of the noncompetition  agreements described in Note 8. Other intangible
assets are being amortized using the straight-line  method over a period of 3 to
5 years.




(continued)

                                      F-11

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 6) - CAPITAL LEASE OBLIGATIONS:

     At  July  31,  1995   approximate   future  minimum  lease  payments  under
capitalized lease obligations were as follows:

          Year Ending
            July 31,                                  Amount

             1996 . . . . . . . . . . . . . . . . .  $30,000

             1997 . . . . . . . . . . . . . . . . .   15,000
                                                     -------

             Total minimum lease payments . . . . .   45,000

             Less amounts representing interest . .    4,000
                                                     -------

             Present value of future lease payments
               at end of year . . . . . . . . . . .   41,000

             Less amount due within one year. . . .   27,000
                                                     -------

             Amounts due after one year . . . . . .  $14,000
                                                     =======

(NOTE 7) - DISCONTINUED OPERATIONS:

     [a] The Company's National HMO (New York), Inc. ("HMO") subsidiary provided
administrative  and  nonmedical  management  services for a medical  group and a
dental group.  In March 1994 the medical group  informed the Company that it was
terminating  the management  arrangement  between the parties.  As a result,  in
April 1994, the Company sold to the medical provider,  the assets related to the
management business for notes receivable  aggregating $750,000 (see Note 3). The
parties  mutually  agreed not to compete  with one  another  for a period of two
years. Subsequently,  the Company made a determination to discontinue all of its
management operation.  The loss on disposal consists primarily of a write-off of
goodwill  of  approximately  $5,700,000  net of a federal  income tax benefit of
approximately $2,550,000.




(continued)


                                      F-12

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 7) - DISCONTINUED OPERATIONS:  (continued)

     [a] (continued)

     Results from discontinued operations related to HMO are as follows:

                                         Year Ended July 31,
                                      -------------------------
                                          1994         1993
                                          ----         ----

     Net revenue . . . . . . . . . .  $ 3,521,000   $5,011,000
                                      ============  ==========

     Income from operations
               before taxes. . . . .  $     8,000   $  806,000
     Income tax provision. . . . . .       40,000      467,000

     Income (loss) from
        operations . . . . . . . . .      (32,000)     339,000

     Loss on disposal. . . . . . . .   (6,174,000)

     Income tax benefit. . . . . . .    2,550,000

     Deferred income tax
        benefit. . . . . . . . . . .       80,000
                                      ------------  ----------
     Income (loss) from
        discontinued
        operations . . . . . . . . .  $(3,576,000)  $  339,000
                                      ============  ==========

     [b] In May 1992, the Company  purchased  certain assets and assumed certain
liabilities  of Hitech  Registered  Nurses of New Jersey,  Inc.,  ("Hitech") for
$250,000.  In July 1993, the Company made a determination  to discontinue  these
operations,  after concluding that the time and financial  commitment  needed to
turn around Hitech's operations  (skilled nursing and home intravenous  therapy)
would be too great for it to pursue.  During the year  ended July 31,  1993,  in
connection with the decision to discontinue the operation,  the Company recorded
a charge of $514,000 (net of a deferred tax benefit of $319,000),  consisting of
a provision for estimated loss on disposition of Hitech's assets and a provision
for estimated operating losses through the expected time of disposition.



(continued)


                                      F-13

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 7) - DISCONTINUED OPERATIONS:  (continued)

     [b] (continued)

     Results from discontinued operations related to Hitech are as follows:

                                               Year Ended July 31,
                                               -------------------
                                               1994           1993
                                               ----           ----
            Net revenue . . . . . . . . . .              $3,503,000
                                                         ==========

            (Loss) from operations
               before income taxes. . . . .              $ (463,000)
            Income tax benefit. . . . . . .                 177,000
                                                         ----------

            (Loss) from operations. . . . .                (286,000)

            Provision for loss on
        disposal . . . . . . . . . .                       (833,000)
            Income tax benefit. . . . . . .  $ 423,000
            Deferred income tax . . . . . .   (319,000)     319,000
                                             ---------   ----------
            Income (loss) from
               discontinued
        operations . . . . . . . . .         $ 104,000   $ (800,000)
                                             =========   ==========


(NOTE 8) - Acquisitions:

     See Note 1[a] for acquisition subsequent to year end.

     In April and June 1994,  the Company,  through a newly formed  wholly owned
subsidiary  purchased  certain  assets of two  companies  engaged  in  providing
outpatient medical services in Volusia County, Florida for an aggregate purchase
price of $147,000.

     In March 1995, the Company purchased certain assets of a company engaged in
home health care services for an aggregate purchase price of $250,000.



(continued)


                                      F-14

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 8) - ACQUISITIONS:  (continued)

     The purchase price for the above acquisitions were allocated as follows:
                                                       1995         1994
                                                   Acquisition  Acquisition

            Furniture and equipment. . . . . . . .   $ 25,000     $ 57,000
            Excess of cost over fair value of
               net assets of businesses acquired .                   5,000
            Covenant not to compete. . . . . . . .    200,000       85,000
            Personnel files. . . . . . . . . . . .     25,000
                                                     --------

                      T o t a l. . . . . . . . . .   $250,000     $147,000
                                                     =========    ========

     The  above   acquisitions  have  been  accounted  for  utilizing   purchase
accounting  principles.  Accordingly,  the results of operations of the acquired
companies  are included in the Company's  consolidated  statements of operations
since the dates of acquisition.

     Had the  operations  of the company  acquired  in 1994 been  acquired as of
August 1,  1992 and had the  operations  of the  company  acquired  in 1995 been
acquired as of August 1, 1993,  there would have been no material  effect on the
consolidated  operations of the Company for the years ended July 31, 1995,  July
31, 1994 and July 31, 1993.


(NOTE 9) - INCOME TAXES:

            The provision for income taxes for 1995, 1994 and 1993 applicable to
continuing operations is summarized as follows:

                                           Year Ended July 31,
                                     ------------------------------
                                     1995         1994         1993
                                     ----         ----         ----
            Current:
               Federal . . . . .  $  515,000   $  688,000   $  673,000
               State . . . . . .     491,000      409,000      412,000
                                  -----------  -----------  ----------

                                   1,006,000    1,097,000    1,085,000

            Deferred . . . . . .     120,000      (20,000)     (14,000)
                                  -----------  -----------  ----------

                 T o t a l . . .  $1,126,000   $1,077,000   $1,071,000
                                  ===========  ===========  ==========



(continued)


                                      F-15

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 9) - INCOME TAXES:  (continued)

     Deferred  income  taxes  reflect  the tax impact of  temporary  differences
between the amounts of assets and liabilities for financial  reporting  purposes
and such amounts as measured by tax laws and  regulations.  The principal  items
making up the deferred income tax expenses (benefit) are as follows:

                                       Year Ended July 31,
                                 -------------------------------
                                   1995       1994        1993
                                 ---------  ---------  ---------

          State tax . . . . . .  $120,000   $(20,000)

          Depreciation. . . . .                        $(14,000)
                                 ---------  ---------  ---------
                                 $120,000   $(20,000)  $(14,000)
                                 =========  =========  =========

     The deferred tax assets as of July 31, 1995, are as follows:

                                                    Assets
                                                   ---------

      Accrued liability and reserves. . . . . . .  $  80,000

      State net operating loss carryforwards. . .    348,000
                                                   ---------
                                                     428,000
      Valuation allowance . . . . . . . . . . . .   (348,000)
                                                   ---------
                                                   $  80,000
                                                   =========
     Two  subsidiaries  of the Company have incurred losses which can be used to
offset their state  taxable  income  through 2010.  Total net  operating  losses
applicable to New York State and Florida amount to approximately  $7,700,000 and
$3,700,000, respectively.



(continued)


                                      F-16

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 9) - INCOME TAXES:  (continued)

     The  reconciliation of the statutory tax rate to the effective tax rate for
the three years ended July 31, 1995 is as follows:

                                          Year Ended July 31,
                                          ------------------
                                          1995   1994   1993
                                          ----   ----   ----
          Statutory rate . . . . . . . .   34%    34%    34%

          State and local taxes (net of
             federal tax effect) . . . .   12     12     11

          Federal tax credit . . . . . .   (5)

          Other. . . . . . . . . . . . .    3      1
                                           ---    ---    ---

          Effective rate . . . . . . . .   44%    47%    45%
                                           ===    ===    ===

     In 1995,  the Company  and the New York State  Department  of Taxation  and
Finance entered into a Stipulation of Discontinuance  regarding all open taxable
years for which the Company previously had been assessed. In consideration for a
payment  of  approximately  $333,000,  this  matter  was  settled.  The  Company
previously established a provision to cover the payment and interest.

     The Internal  Revenue  Service is currently  conducting an  examination  of
federal tax returns for the years ended July 31, 1991 through July 31, 1994. The
Company  received  a refund  of  approximately  $2,100,000  as a  result  of net
operating loss carryback  claims made in fiscal year ended July 31, 1994 and the
years affected by the claims are now being examined. No assessment has been made
to date.


(NOTE 10) - CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS:

     Most of the Company's business is with customers and governmental  agencies
who are in the health care industry.

     The Company provides temporary health care personnel to in-home patients in
the New York City metropolitan area and outpatient  services in Florida.  Credit
losses  relating  to  customers   historically  have  been  minimal  and  within
management's expectations.



(continued)


                                      F-17

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 10) - CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS:
            (continued)

     At July 31, 1995, the Company maintained  approximately 58% of its cash and
cash equivalents with one financial institution.

     Under  certain  third  party  contracts  the  Company   received   revenues
approximating,  $3,125,000,  $3,427,000  and $3,762,000 for the years ended July
31,  1995,  1994  and  1993,  respectively,  from  a  governmental  agency  and,
$9,933,000,  $7,842,000 and  $6,188,000 for the years ended July 31, 1995,  1994
and 1993, respectively, from a private company. At July 31, 1995 the Company had
an outstanding receivable from the private company of $2,473,000.


(NOTE 11) - STOCK OPTION PLAN:

     In 1992,  the  stockholders  approved the 1992 Stock Option Plan (the "1992
Plan")  designed to provide an incentive to key employees  (including  directors
and officers who are key  employees)  and to Directors  who are not employees of
the  Company.  The 1992 Plan  authorizes  the  granting  of both  incentive  and
nonqualified  stock  options to purchase up to 500,000  shares of the  Company's
common stock.

     The 1992 Plan is administered by the  Compensation  Committee which has the
authority to determine when options are granted, the term during which an option
may be  exercised  (provided  no option has a term  exceeding  ten  years),  the
exercise price and the exercise  period.  The exercise price shall generally not
be less  than the fair  market  value on the date of  grant.  No  option  may be
granted under the 1992 Plan after August 16, 2002.

     During 1995,  283,502 options previously granted under another stock option
plan were  cancelled  upon  termination  of that plan and replaced  with 283,502
options granted under the 1992 Plan.

     At July 31, 1995,  497,000  shares of the Company's  common stock have been
reserved for future issuance pursuant to the 1992 Plan.




(continued)

                                      F-18

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 11) - Stock Option Plan:  (continued)

            Listed  below is a summary of stock  option  activity  for the three
years ended July 31, 1995.

                              Number of Shares         Exercise
                           1995     1994     1993       Price
                        --------- -------- -------- ---------
     Outstanding -
        beginning of
        period . . . . . .  300,502   313,502   196,000  $2.63 - $4.75
     Options granted . . .  286,502             120,002   2.63 -  4.15
     Options exercised . .   (3,000)                          2.63
     Options forfeited . . (288,502)  (13,000)   (2,500)  2.63 -  4.75
                           ---------  --------  -------
     Options
        outstanding. . . .  295,502   300,502   313,502   2.63 -  4.75
                           =========  ========  =======

     Options
        exercisable. .      295,502   300,502   262,627
                           =========  ========  =======


(NOTE 12) - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS:

     [a] The Company has an Employee Savings and Stock Investment Plan organized
under Section 401(k) of the Internal Revenue Code. Under the plan, employees may
contribute  up to 10% of their  salary  into the plan,  limited  to the  maximum
amount allowable under federal tax regulations.  The Company will match employee
contributions invested in Company common stock up to 5% of the employee's salary
and may also make additional  contributions  at its  discretion.  In addition to
investing in Company stock, an employee may invest in several mutual funds.  The
Company's  contribution for each of the years ended July 31, 1995, July 31, 1994
and July 31, 1993 was $59,000, $74,000 and $99,000, respectively.

     [b] The Company and its subsidiaries  have employment  agreements with five
officers which provide for aggregate annual salaries of $681,000. The employment
agreements  expire  through  April  1998.  One of the  agreements  provides  for
additional  compensation  of up to $150,000  based on 5% of pre-tax  income,  as
defined, in excess of $3,000,000.

     [c] The Company rents various  medical and office  facilities  through 1999
under the terms of several lease agreements which include escalation clauses.




(continued)


                                      F-19

<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


(NOTE 12) - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS:
            (continued)

     At July 31, 1995,  minimum annual rental  commitments under  noncancellable
operating leases are as follows:

               Year Ending
                 July 31,
               -----------
                  1996. . . . . . . . . . . . .  $585,000
                  1997. . . . . . . . . . . . .   176,000
                  1998. . . . . . . . . . . . .    99,000
                  1999. . . . . . . . . . . . .    26,000
                                                 --------
                            T o t a l . . . . .  $886,000
                                                 ========

     Rent expense (including  discontinued  operations) for the years ended July
31, 1995,  1994 and 1993 was  approximately  $584,000,  $859,000 and $1,066,000,
respectively.

     One lease is with a company  controlled  by the Company's  Chief  Executive
Officer. Rent expense under such lease approximates $108,000 per year.

     [d] The  Company has a line of credit  with its bank  totalling  $2,000,000
available  until  November  30,  1995.  Advances  against  the  line  are  to be
collateralized by the assets of the Company. At July 31, 1995 the Company has no
outstanding balance under the line of credit.

     [e] The Company is party to certain claims  arising in the ordinary  course
of business. In the opinion of management,  all such claims are without merit or
involve  amounts  which  would  not have a  significant  adverse  effect  on the
financial position of the Company.

                                      F-20

<PAGE>



                   REPORT OF INDEPENDENT AUDITORS ON SCHEDULE



Board of Directors and Stockholders
National Home Health Care Corp.
New York, New York


     The  audits  referred  to in  our  report  dated  October  6,  1995  on the
consolidated  financial  statements  of  National  Home  Health  Care Corp.  and
subsidiaries,  which  appears in Part II,  includes  Schedule II for each of the
years in the  three-year  period  ended  July 31,  1995.  In our  opinion,  such
schedule  presents  fairly the  information set forth therein in compliance with
the applicable accounting regulation of the Securities and Exchange Commission.





Richard A. Eisner & Company, LLP

New York, New York
October 6, 1995

                                      F-21

<PAGE>



                                                                     SCHEDULE II

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
       FOR THE YEARS ENDED JULY 31, 1995, JULY 31, 1994 AND JULY 31, 1993


<TABLE>
<CAPTION>

            Column A                         Column B             Column C               Column D             Column E
                                                                 Additions   
                                             Balance         (1)            (2)
                                                at                       Charged to                            Balance
                                            beginning     Charged to        other                                at
                                                of        costs and       accounts -    Deductions -           end of
          Description                         period       expenses       describe        describe             period
<S>                                           <C>          <C>                           <C>        <C>        <C>    

Year ended July 31, 1995:
   Reserve and allowance deducted from
   asset account and allowance for
   uncollectible accounts . . . . . . . .     $84,000      $173,000                      $(158,000) (1)        $99,000
                                             ========     =========                     ==========             =======

Year ended July 31, 1994:
   Reverse and allowance deducted from
   asset account and allowance for
   uncollectible accounts . . . . . . . .     $54,000      $141,000                      $(111,000) (1)        $84,000
                                             ========     =========                     ==========             =======

Year ended July 31, 1993:
   Reserve and allowance deducted from
   asset account and allowance for
   uncollectible accounts . . . . . . . .     $74,000      $ 76,000                      $ (96,000) (1)        $54,000
                                             ========     =========                     ==========             =======



</TABLE>





(1)  Represents actual write-offs.












                 See accompanying notes to financial statements.

                                      F-22

<PAGE>




                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                                   NATIONAL HOME HEALTH CARE CORP.


                                   By:/S/ ROBERT P. HELLER
                                      ----------------------------
                                       Robert P. Heller
                                       Vice President of Finance and
                                       Chief Financial Officer
Dated:  March 22, 1996



                                     

<PAGE>

                                                     Commission File No. 0-12927







                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    EXHIBITS

                                       to

                                 AMENDMENT NO. 2

                                   FORM 10-K/A

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
                         FISCAL YEAR ENDED JULY 31,1995

                         NATIONAL HOME HEALTH CARE CORP.





<PAGE>

<TABLE>

Exhibit
Number   Exhibit to this Report              Method of Filing                      Page No.
-------  ----------------------              ----------------                      --------

<S>      <C>                                 <C>
3.1      Certificate of Incorporation        Incorporated  by reference to
         of the Registrant                   Exhibit 3(a) to Registration 
                                             Statement on Form S-1 (No.2-86643)
                                             filed September 20, 1983 (the "1983
                                             Registration Statement").

3.2      Certificate  of Amendment to        Incorporated by reference to 
         Certificate  of  Incorporation      Exhibit 3.2 to the  Registrant's
         of the  Registrant                  Annual Report on Form 10-K for the
                                             year ended July 31, 1992 (the "1992
                                             Form 10-K").

3.3      By-Laws of the Registrant           Incorporated by reference to 
                                             Exhibit 4(a) to the 1983 
                                             Registration Statement.

4.1      Specimen Stock Certificate          Incorporated by reference to 
                                             Exhibit 4(a) to the 1983 
                                             Registration Statement.

10.1     1992 Stock Option Plan              Incorporated  by reference to 
         of the Registrant                   Exhibit 10.1 to the Registrant's
                                             Annual Report on Form 10-K for the
                                             year ended July 31, 1993 (the "1993
                                             Form 10-K).

10.2     Incentive Stock Option Plan         Incorporated by reference to 
         of the Registrant                   Exhibit 10(b) to the 1983 Registration
                                             Statement.

10.3     Agreement between Allen             Incorporated by reference to
         Health Care and VNS Home Care       Exhibit 10.3 to the Registrant's
         dated January 1, 1994               Annual Report on Form 10-K for the
                                             year ended July 31, 1994
                                             (the "1994 Form 10-K").


                                       -2-

<PAGE>


Exhibit
Number   Exhibit to this Report              Method of Filing                      Page No.
-------  ----------------------              ----------------                      --------

10.4     Agreement  between Boro             Incorporated  by reference to
         Medical Corp. and Brevard           Exhibit  10.25 to the Report on
         Medical Center dated                Form 10- K for the year ended July
         September 11,  1991                 31, 1991 (the "1991 Form 10-K").

10.5     Employment Agreement                Incorporated  by reference to
         between the Registrant and          Exhibit 10.7 to the 1993 Form 10-K.
         Steven Fialkow dated August 1993   

10.6     Employment Agreement                Incorporated by reference to 
         between the Registrant and          Exhibit 10.8 to the 1993 Form 10-K.
         Richard Garofalo dated
         August 1993

10.7     Employment Agreement                Incorporated by reference to
         between the Registrant and          Exhibit 10.9 to the 1993 Form 10-K
         Gerald Kline dated 
         August 1993

10.8     Employment Agreement                Incorporated  by reference to 
         between the Registrant and          Exhibit 10.10 to the 1993 Form 10-K.
         Thomas Smith dated 
         August 1993 


10.9     Employment Agreement                Incorporated by reference to
         between the Registrant and          Exhibit 10.9 to the
         Robert Heller dated                 1994 Form 10-K.
         August 1994  

10.10    Agreement between Division          Incorporated by reference to 
         of Social Services of County        Exhibit 10.35 to the 
         of Suffolk and Health               1991 Form 10-K.
         Acquisition Corp. d/b/a A
         Round The Clock Temporary
         Services  

                                       -3-

<PAGE>


Exhibit
Number   Exhibit to this Report              Method of Filing                      Page No.
-------  ----------------------              ----------------                      --------

10.11    Agreement  between Nassau           Incorporated by reference to
         County Department of Social         Exhibit 10.9 to the 
         Services and Allen Health           1992 Form 10-K.
         Care 

10.12    Agreement between Catholic          Incorporated by reference to
         Medical Center of Brooklyn          Exhibit 10.14 to the
         and Queens, Inc. on behalf of       1994 Form 10-K.
         Mary Immaculate Hospital
         Home Health Agency and
         Allen Health Care, dated
         January 1, 1994

10.13    Letter  Agreement dated             Previously filed.
         March 15, 1995  providing 
         secured line of credit
         from The Bank of New York 

10.14    Letter dated June 1, 1992           Incorporated by reference to 
         from Public  Health  Council of     Exhibit 10.13 to the 
         the State of New York Department    1992 Form 10-K.
         of Health to Health  Acquisition
         Corp.  d/b/a Allen Health Care

10.15    Employment Agreement                Incorporated by reference to 
         between the Registrant and          Exhibit 10.20 to the 
         Frederick H. Fialkow dated          1993 Form 10-K.
         April 30, 1993; First
         Amendment to Employment
         Agreement dated August 1,
         1993

10.16    Letter from Joint Commission        Incorporated by reference to 
         on Accreditation  of Healthcare     Exhibit 10.24 to the 
         Organizations  awarding             1993 Form 10-K.
         accreditation to Allen Health
         Care, dated September 20, 1993  

                                       -4-

<PAGE>


Exhibit
Number   Exhibit to this Report              Method of Filing                      Page No.
-------  ----------------------              ----------------                      --------

10.17    1993 401(k) Plan of the             Incorporated  by reference to 
         Registrant                          Exhibit 10.25 to the 1993 Form 10-K.

10.18    Letter Agreement between            Incorporated by reference to 
         National HMO (New York),            Exhibit 10.26 to the 
         Inc. and Boro Medical, P.C.         1993 Form 10-K.
         dated November 12, 1993

10.19    Asset Purchase Agreement            Incorporated by reference to
         among National HMO (New             Exhibit 10.24 to the 
         York), Inc., National HMO           1994 Form 10-K.
         Corp. of Elizabeth, Inc., Boro
         Medical, P.C. and Boro 
         Health Care of Union, P.C.
         dated April 30, 1994

10.20    Asset Purchase Agreement            Incorporated by reference to 
         between First Health, Inc. and      Exhibit 10.25 to the
         Healthmart P.A. and Cesar N.        1994 Form 10-K.
         Abiera, Jr., M.D. dated April
         29, 1994
 

10.21    Asset Purchase Agreement            Incorporated by reference to
         between First Health, Inc. and      Exhibit 10.26 to the 
         Atlantic Medical Associates,        1994 Form 10-K.
         P.A. and Ernest Cook, Jr.,
         M.D. dated June 1, 1994

10.22    Agreement for the Purchase          Incorporated by reference to 
         of the Stock of Nurse Care,         Exhibit 10.1 to the Registrant's
         Inc. and Related Transaction.       Current Report on Form
                                             8-K dated August 4, 1995.

10.23    Employment Agreement between        Incorporated by reference to 
         New England and Arleen O'Connell    Exhibit 10.2 to the Registrant's
         dated as of August 11, 1995.        Current Report on Form 8-K 
                                             dated August 4, 1995.

                                       -5-

<PAGE>


Exhibit
Number   Exhibit to this Report              Method of Filing                      Page No.
-------  ----------------------              ----------------                      --------

10.24    Form of Employment                  Previously filed.
         Agreement between Brevard
         Medical Center, Inc. and
         Warren D. Stowell dated as
         of November 1, 1995.

22.1     List of Subsidiaries                Previously filed.

23.1     Consent of Richard A. Eisner        Filed herewith.
         & Co.


</TABLE>

                                       -6-