SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
--------------------------------------------------------------------------------
                                    FORM 10-K
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

For the fiscal year ended July 31, 2000          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,  as amended,  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. [X]

As of October 23, 2000,  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 $16,399,529, 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 23,
2000 was 4,947,258.

Portions of the  Registrant's  Proxy  Statement  for its 2000 Annual  Meeting of
Stockholders are incorporated by reference in Part III hereof.


<PAGE>


                                     PART I

ITEM 1.    BUSINESS.

GENERAL

         National  Home  Health  Care  Corp.   (the  "Company")  is  a  Delaware
corporation  which  was  organized  in 1983 and  completed  its  initial  public
offering that year. Formerly Family Treatment Centers of America,  Inc. and then
National HMO Corp., in 1991 the Company changed its name to National Home Health
Care Corp.  The Company is a provider of home health care  services in New York,
New Jersey and Connecticut.

         The Company has four principal operating subsidiaries:

         o Health Acquisition Corp.,  formerly Allen Health Care Services,  Inc.
("Allen Health Care"), a New York  corporation.  Allen Health Care conducts home
health care operations in New York.

         o  New  England  Home  Care,  Inc.  ("New   England"),   a  Connecticut
corporation, which conducts home health care operations in Connecticut.

         o  Accredited  Health  Services,  Inc.  ("Accredited"),  a  New  Jersey
corporation which conducts home health care operations in New Jersey.

         o  Connecticut  Staffing  Works  Corp.   ("Connecticut   Staffing"),  a
Connecticut  corporation,  which  conducts  healthcare  staffing  operations  in
Connecticut.

         In  January  1996,  the  outpatient  medical  service  business  of the
Company,  formerly known as Brevard Medical Center, Inc. and First Health, Inc.,
was  reorganized  as  SunStar  Healthcare,  Inc.  ("SunStar"),  a  newly-formed,
wholly-owned  subsidiary  of the Company.  In May 1996,  SunStar  completed  its
initial public  offering (thus  reducing the Company's  ownership  percentage in
SunStar to  approximately  37.6%)  following a complete change in management and
the adoption of a business plan by new  management  for the  establishment  of a
health maintenance organization. As a result, SunStar was no longer consolidated
with the Company for  accounting  purposes  and the  Company  accounted  for its
investment in SunStar using the equity method of  accounting.  During the fiscal
year ended July 31, 1998,  the  Company's  ownership  percentage  was reduced to
30.5% as a result of  SunStar  issuing  additional  shares of its  common  stock
pursuant to a private  placement.  As of July 31, 2000, the Company's  ownership
percentage  of SunStar was 21.6% and the  Company's  value of its  investment in
SunStar  was  $0.  In  February  2000,   SunStar's  sole  operating   subsidiary
effectively discontinued operations.

Health Acquisition Corp.
------------------------
d/b/a Allen Health Care Services
--------------------------------

         In October 1986, the Company  acquired all of the  outstanding  capital
stock of Allen  Health Care.  Allen  Health Care is a provider of personal  home
health care  services in New York State.  Services  are  provided by  registered
nurses,  personal care aides,  home health aides and homemakers.  The Company is
licensed by the Public  Health  Council of the State of New York  Department  of
Health.  Allen Health Care  maintains  its  principal  administrative  office in
Jamaica,  New York and


                                      -2-
<PAGE>

has branch offices in Lindenhurst and Mount Vernon,  New York. Case coordinating
of patients is performed at these three  offices.  In addition,  the Company has
satellite offices in Brooklyn,  Islandia, Hempstead and the Bronx, New York. The
satellite  offices are primarily used for the  recruitment  and training of home
health aides.  Services are provided in the  following  counties in the State of
New York: Nassau, Suffolk, Westchester, Queens, Kings, New York and the Bronx.

         All home health care personnel are licensed or agency certified under a
New York State approved program and can be engaged on a full-time,  part-time or
live-in  basis.  Since July 1996,  Allen  Health Care has  required  residential
criminal  background  investigations for all new personnel.  In addition,  urine
drug testing is part of the  pre-employment  screening  process and is performed
annually  and  randomly  thereafter.  In February  1999,  Allen  Health Care was
re-surveyed   by  the  Joint   Commission  of   Accreditation   of  Health  Care
Organizations  ("JCAHO"),  an accrediting body for health care providers.  JCAHO
accreditation  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 re-survey resulted in Allen Health Care extending
its accredited status through the year 2002.

         Reimbursement   for  Allen  Health  Care's  services  is  primarily  by
certified home health care agencies ("CHHAs") and long-term health care provider
programs that  subcontract  their patients to Allen Health Care, as well as from
private payors and the Nassau,  Suffolk and Westchester  Counties  Department of
Social  Services   Medicaid   Programs,   for  which  Allen  Health  Care  is  a
participating provider.

         Allen  Health Care  provides  home health care  services to its clients
twenty-four  hours per day,  seven days per week.  Although  Allen Health Care'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 the
home health aide and personnel 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 professional staff.

         Allen  Health  Care has  expanded  in  recent  years  through  selected
acquisitions  of  complementary  businesses in its geographic  region.  In March
1997, Allen Health Care completed the acquisition of certain assets of C.J. Home
Care,  Inc.,  d/b/a Garden City Home Care, a New York  licensed home health care
agency that provided home health aide  services in Nassau  County,  New York. In
May 1997,  Allen Health Care completed the acquisition of certain assets of Home
Health Aides,  Inc. and H.H.A.  Aides,  Inc.,  two New York licensed home health
care agencies that provided home health aide services in both Nassau and Suffolk
Counties,  New York. The latter  acquisition gave the Company an entree into the
Shared Aide Program in Nassau  County.  The Shared Aide Program is a program for
Medicaid  patients that brings together a group of home health aides to care for
patients in one geographic  area, thus  increasing  operating  efficiencies  and
reducing costs.

         In August 1998,  Allen Health Care completed the acquisition of certain
assets of Bryan Employment Agency,  Inc., d/b/a Bryan Home Care Services,  a New
York licensed home health care agency that provided home health aide services in
Westchester  County, New York. The acquisition  expanded the geographic presence
of the Company and enabled Allen Health Care to

                                      -3-
<PAGE>

become a participating  provider in the Westchester  County Department of Social
Services Medicaid Program.

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

New England Home Care, Inc.
---------------------------

         In August 1995,  the Company  acquired New England in a stock  purchase
arrangement.  New England is a Medicare  certified and licensed home health care
company in  Connecticut.  In October 1998, New England was re-surveyed by JCAHO,
resulting in New England  extending its  accredited  status  through  2001.  New
England provides services throughout the state of Connecticut.  Services include
skilled  nursing,   physical  therapy,   occupational  therapy,  medical  social
services,  home health aide and  homemaker  services.  In addition,  New England
provides specialty services consisting of adult/geriatric, pediatric, post-acute
rehabilitation,  behavioral  medicine  and  maternal/child  health.  New England
provides full-service home health care twenty-four hours per day, seven days per
week. Weekends,  holidays and after-hours are supported by an on-call system for
each office  location  with medical  supervision  by a  registered  nurse at all
times.  All home health care personnel are licensed or agency  certified under a
Connecticut state-approved program and can be engaged on a full-time,  part-time
or live-in  basis.  Since 1995,  New England has performed  criminal  background
investigations on all new personnel.

         New England maintains its principal  administrative  office in Milford,
Connecticut.  In addition,  New England has an administrative office in Cromwell
and  satellite  offices  in  Norwalk,  Hamden,  Waterbury,   Danbury,  Branford,
Hartford, Norwich and Bridgeport,  Connecticut. Case coordinating of patients is
performed at the Milford  administrative  office. The satellite offices are used
as drop-off offices for paperwork,  recruitment,  in services and orientation of
personnel. Reimbursement for New England's services is primarily provided by the
Connecticut  Medicaid  Program,  the  Federal  Medicare  Program,  managed  care
companies,  private  payors,  hospices and other Medicare  certified home health
agencies and long-term  care providers  that  subcontract  their patients to New
England.

         New  England  has  expanded  its  operations  in the past year  through
increased  penetration of market share in Connecticut and selected  acquisitions
of complementary  assets in its geographic region. In November 1999, New England
acquired certain assets of Optimum Care Services of Connecticut,  Inc.,  Optimum
Home Health of  Connecticut,  Inc.  and Optimum Home Care of  Connecticut,  Inc.
(collectively, the "Optimum Entities"). The Optimum Entities included a Medicare
certified and licensed home health care company engaged in providing home health
care services in  Connecticut.  The assets were acquired from a  court-appointed
Chapter 7 Trustee. The final purchase price of $4,400,000 in cash was determined
through an auction process  conducted at the United States  Bankruptcy Court for
the District of Massachusetts.  The acquisition of these assets was coupled with
a successful  penetration  of the market share made available as a result of the
liquidation of the Optimum Entities.

         In April 2000, New England  acquired  certain assets of the Connecticut
operations of U.S.  HomeCare  Corp.  ("U.S.  HomeCare-Connecticut"),  a Medicare
certified and licensed home health

                                      -4-
<PAGE>

care company engaged in providing home health care services in Connecticut,  for
$300,000 in cash. The acquisition complemented the Company's existing operations
in Connecticut.

         The continued  growth of New England  depends on its ability to recruit
and retain qualified  personnel.  New England's training program for home health
aides has been approved under a Connecticut  state-approved program. New England
primarily recruits nurses through newspaper advertisements. New England believes
that it offers  competitive  salaries  and fringe  benefits and has been able to
keep its employees working on a steady basis.

Connecticut Staffing Works Corp.
--------------------------------

         Connecticut  Staffing was organized in October 1999 to operate  certain
of the assets acquired from the Optimum Entities.

         Connecticut Staffing is a full-service health care staffing company. It
provides  temporary  staffing to hospitals,  skilled  nursing  facilities,  home
health  organizations  and schools and other  institutions.  Staffing  personnel
include  registered  nurses,   licensed  practical  nurses,   certified  nursing
assistants,  home health aides, homemakers,  opticians,  medical secretaries and
emergency medical technicians.  The company maintains its administrative  office
in Cromwell,  Connecticut.  Staffing services are provided twenty-four hours per
day, seven days per week. Staffing coordinators are in the office from 6 a.m. to
10 p.m.  Weekends,  holidays and after hours are supported by an on-call  system
which pages a staffing coordinator.

         The company maintains a roster of quality professional  personnel.  The
continued  success  of  Connecticut  Staffing  is  dependent  on its  ability to
maintain  its  steady  roster  of per diem  workers  for  meeting  the  staffing
requirements  of its clients.  The company  believes that it offers  competitive
salaries and fringe benefits and has been able to keep its personnel  working on
a steady basis.

Accredited Health Services, Inc.
--------------------------------

         In October 1998, the Company  acquired all of the  outstanding  capital
stock of  Accredited.  Accredited  is a licensed  home health care  company that
provides  home health aide  services  and  skilled  nursing  services in Bergen,
Hudson,  Passaic,  Essex, Morris,  Union,  Somerset and Middlesex Counties,  New
Jersey.  Accredited maintains its principal administrative office in Hackensack,
New Jersey. In addition, it has a branch office in Verona and a satellite office
in Union,  New Jersey.  Case  coordinating  of patients is performed in both the
Hackensack and Verona offices.  The satellite office is used for recruitment and
orientation of personnel.

         Accredited   provides   home  health  care   services  to  its  clients
twenty-four  hours  per  day,  seven  days  per  week.  Weekends,  holidays  and
after-hours are supported by an on-call system for each office.  All home health
aides are licensed under a New Jersey state-approved  program and can be engaged
on a  full-time,  part-time  or  live-in  basis.  In June 2000,  Accredited  was
re-surveyed by the Commission on Accreditation for Home Care (CAHC),  one of the
accrediting  bodies  required for  participation  as a Medicaid  provider in New
Jersey.  This  accreditation was extended for an additional year.  Reimbursement
for  Accredited's  services  is  primarily  by the State of New Jersey  Medicaid
Program,  Medicare  certified home health care agencies that  subcontract  their
patients to Accredited and private payors.

                                      -5-
<PAGE>

         Accredited's  growth  depends  on its  ability  to  recruit  and retain
qualified  home health aides.  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.

         On August 25, 2000, Accredited purchased certain assets of Health Force
Owned,  Ltd. and its affiliates  ("Health  Force").  Health  Force's  operations
included  the  provision  of home health aide and  skilled  nursing  services in
northern and central New Jersey. Annual revenue for the New Jersey operations of
Health Force approximated $4,200,000 at the time of acquisition. The acquisition
complemented the Company's  existing  operations in New Jersey and also expanded
its services to include skilled nursing.

Insurance
---------

         The  Company and its  subsidiaries  maintain  professional  malpractice
liability  coverage on  professionals  employed in the  rendering of health care
services providing coverage per occurrence and in the aggregate and coverage for
the customary  risks  inherent in the  operation of business in general.  Recent
market  conditions  with  respect  to  liability   insurance  have  caused  wide
fluctuations in the cost and availability of coverage.  The Company also carries
directors  and  officers  liability  insurance.  While the Company  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 and Labor Relations
-----------------------------

         As of October 12, 2000,  the Company had  approximately  2,800 full and
part-time employees of whom approximately 21 were employed in various management
capacities and  approximately  four were employed in marketing  capacities.  The
Company has no union contracts with any of its employees.  The Company  believes
its  relationship   with  its  employees  is   satisfactory.   The  Company  has
standardized  procedures for  recruiting,  interviewing  and reference  checking
prospective  health care  personnel.  All nurses and home  health  aides must be
licensed or certified by appropriate authorities.

Competition
-----------

         The home health care field is highly competitive in each state in which
the Company  operates.  The Company is competing with numerous other licensed as
well as certified home health care agencies in each of the markets it serves. In
addition,  the Company  competes with  companies  that, in addition to providing
home health aide and skilled nursing services, also, unlike the Company, provide
pharmaceutical  products  and other home  health  care  services  that  generate
additional referrals. Competition also involves the quality of services provided
and  the  pricing  for  its  services.  As  a  result  of  changes  in  Medicare
reimbursement  and the  competitive  pressures of managed care,  the home health
care industry continues to experience  consolidation.  In addition,  the Company
believes  that  smaller,  less  financially  secure  home health  agencies  will
continue  to find it  difficult  to  compete  for market  share and comply  with
regulatory compliance standards.

         The Company'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  Company  will be
successful in maintaining or in securing additional  qualified  personnel.  Over
the past year, the strong labor market has made it more difficult to attract the
level

                                      -6-
<PAGE>

of health  care  personnel  necessary  to the  Company's  business.  The Company
recruits  personnel  principally  through newspaper  advertisements  and through
referrals from existing personnel.

Customers
---------

         The Company provides its services to four types of payor sources. These
sources include federal and state funded public  assistance  programs  (Medicare
and Medicaid), other third party payors (subcontracts),  insurance companies and
private payors.

         A  substantial  portion  of  the  Company's  revenue  is  derived  from
subcontracts  that the  Company  has with  Medicare  certified  home health care
agencies and long-term  health care provider  programs  that  subcontract  their
patients  to the  Company.  From  time to  time,  some of  these  agencies  have
requested  bids from the home care  agencies to which they  subcontract.  If the
Company is not  successful in  maintaining  these  contracts as they came up for
bid,  it could have a  materially  adverse  effect on the  Company's  results of
operations.

         One or more  customers  have  each  accounted  for more than 10% of the
Company's  revenue.  For the fiscal  years ended July 31,  2000,  1999 and 1998:
Visiting  Nurse  Service of New York,  a  non-profit  Medicare  home health care
agency, accounted for 10%, 16% and 22%, respectively,  of the Company's revenue;
the State of New York Department of Social  Services  personal care aide program
for the counties of Nassau,  Suffolk and  Westchester  accounted for 9%, 16% and
18%, respectively, of the Company's revenue; the State of Connecticut Department
of Social  Services  medical  assistance  program  accounted  for 18%, 7% and 9%
respectively,  of the  Company's  revenue;  and  the  federal  Medicare  program
accounted  for  approximately  6%, 8% and 13%,  respectively,  of the  Company's
revenue.  The  loss of any of the  foregoing  customers  would  have a  material
adverse effect on the Company.

         Although  the  Company had been  notified  in October  1999 by Visiting
Nurse  Service of New York that  commencing  with 2000 it would not  continue to
subcontract  home health  aides from Allen  Health  Care,  in January 2000 Allen
Health Care had its contract with Visiting Nurse Service of New York renewed for
an additional year.

Government Regulations and Licensing
------------------------------------

         The health care industry is highly regulated. The Company's business is
subject to substantial and frequently changing regulations by federal, state and
local  authorities.  The Company  must comply  with state  licensing  along with
federal and state  eligibility  standards  for  certification  as a Medicare and
Medicaid provider.

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

Medicare
--------

         Title  XVIII  of  the  Social  Security  Act  authorizes  Part A of the
Medicare  program,  the health insurance  program that pays for home health care
services for covered persons  (typically,  those aged 65 and older and long-term
disabled).  Home health care providers may  participate in the Medicare  program
subject to certain conditions of participation and upon acceptance of a provider
agreement

                                      -7-
<PAGE>

by the Secretary of the Department of Health and Human Services. Only enumerated
services,  upon  satisfaction  of certain  coverage  criteria,  are eligible for
reimbursement  as  a  Medicare  provider.  The  Company  is  currently  Medicare
certified in Connecticut. Approximately 6%, 8% and 13% of revenue for the fiscal
years  ended  July 31,  2000,  1999 and 1998 were  derived  under  the  Medicare
program.

         The Balanced  Budget Act of 1997,  as amended  (the "Act"),  was signed
into law in August 1997. The Act made significant  changes in the  reimbursement
system for Medicare home health  services.  The primary  change that affects the
Company is a  restructuring  of the  reimbursement  system  related to  Medicare
certified home care agencies.

         Under the Act, Medicare home care reimbursement  changes were scheduled
in two phases.  A temporary or interim  payment  system  ("IPS") took effect for
cost reports  beginning on or after  October 1, 1997.  Under IPS,  Medicare home
health care providers were reimbursed the lower of (i) their actual costs,  (ii)
cost limits based on 105% of median costs of  freestanding  home health agencies
or (iii) an  agency-specific  per patient  cost limit based on 98% of 1994 costs
adjusted for inflation. Under IPS, most Medicare providers were reimbursed under
an  agency-specific  per patient cost limit. Prior to the implementation of IPS,
Medicare   reimbursed   providers   on   reasonable   cost   basis   subject  to
program-imposed cost per visit limitations. Effective October 1, 2000, under the
prospective payment system, the last remaining phase under the Act, Medicare now
reimburses  providers a predetermined base payment.  The payment is adjusted for
the health  condition and care needs of the beneficiary and also is adjusted for
the geographic  differences in wages across the country.  Medicare provides home
health agencies with payments for 60-day  "episodes of care". The 60-day episode
is the basic unit of payment.  The 60-day  episode  coordinates  with the 60-day
physician  re-certification of the plan of care and with the 60-day reassessment
of the patient  using the Outcomes and  Assessment  Information  Set  ("OASIS").
Oasis is the outcome  study that  Medicare  utilized  over the past two years to
determine the amount of reimbursement to providers for each 60-day episode.

         As a result of the  changes to  Medicare  reimbursement  imposed by the
Act, the Company  experienced  a decline in revenue from its Medicare  certified
nursing agency. In addition, the Company's operations in New York and New Jersey
are dependent upon referrals primarily from Medicare certified  agencies,  whose
future  reimbursement may be adversely  affected.  Accordingly,  there can be no
assurance  that the  Company's  future  referrals  will not  result  in  reduced
reimbursement  rates or reduced volume in business.  As the prospective  payment
system has just recently been implemented,  the Company is unable to predict its
impact on the Company.

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 state health care program.  The federal  government has 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 Company
believes that its current  operations are not in violation of the  anti-kickback
statute.

                                      -8-
<PAGE>

Medicaid
--------

         Approximately  30%,  27% and 27% of revenue for the fiscal  years ended
July 31, 2000, 1999 and 1998,  respectively,  were derived under state sponsored
Medicaid  programs.  Reimbursement  for home  health care  services  rendered to
eligible Medicaid  recipients is made in an amount determined in accordance with
procedures  and standards  established  by state law under  federal  guidelines.
States differ as to reimbursement  policies and rates. The Company is a licensed
Medicaid  provider  in  Connecticut,  New  Jersey  and in  Nassau,  Suffolk  and
Westchester Counties,  New York. Medicaid  reimbursement rates may be reduced in
response to state economic and budgetary constraints,  as well as in response to
changes in the Medicare program.

ITEM 2.    PROPERTIES.

         The Company,  directly or through certain subsidiaries,  leases various
office  facilities under lease agreements with various  expiration dates through
the year  2005.  The  following  sets  forth the  location,  approximate  square
footage, use of each office and expiration date of each lease:
<TABLE>
<CAPTION>
                                   Approximate                                                Expiration Date
Location                           Square Feet      Use                                             of Lease
--------                           -----------      ---                                 -------     --------
<S>                                   <C>                                                        <C> <C>
Scarsdale, NY                         2,679         Corporate headquarters               October 31, 2003
Queens, NY                            7,500         Administrative office                January 31, 2001
Lindenhurst, NY                       1,250         Branch office                        July 31, 2001
Mount Vernon, NY                      2,400         Branch office                        December 31, 2001
Hempstead, NY                         3,800         Satellite office                     September 30, 2004
Islandia, NY                          2,100         Satellite office                     June 30, 2001
Brooklyn, NY                            800         Satellite office                     October 31, 2000
Bronx, NY                               648         Satellite office                     August 31, 2001
Milford, CT                          10,336         Administrative office                September 30, 2002
Cromwell, CT                         12,419         Administrative office                June 30, 2003
Norwalk, CT                           1,400         Satellite office                     September 30, 2001
Hamden, CT                              774         Satellite office                     July 31, 2001
Waterbury, CT                         2,000         Satellite office                     Month to Month
Danbury, CT                             780         Satellite office                     June 30, 2001
Branford, CT                            200         Satellite office                     August 31, 2000
Hartford, CT                            989         Satellite office                     April 30, 2002
Norwich, CT                           1,200         Satellite office                     April 30, 2001
Bridgeport, CT                          588         Satellite office                     April 30, 2001
Hackensack, NJ                        4,281         Administrative office                September 30, 2005
Verona, NJ                            1,765         Branch office                        October 31, 2001
Hackensack, NJ                        2,350         Satellite office                     October 31, 2001
Union, NJ                               800         Satellite office                     March 31, 2001
</TABLE>

         The Company  believes that its office  facilities  are adequate for the
conduct  of  its  existing  operations.  The  Company  regularly  evaluates  the
suitability  and the  overall  adequacy  of its  various  offices.  The  Company
believes that it will be able to renew or find  adequate  offices for all leases
which will expire in the current fiscal year.

                                      -9-
<PAGE>

ITEM 3.    LEGAL PROCEEDINGS.

         In the ordinary course of business,  the Company is subject,  from time
to time, to claims and legal actions.

         The Company, certain of its officers and directors (who previously were
outside directors of SunStar (the "director  defendants")) and other parties are
named as defendants in In Re SunStar  Healthcare  Securities  Litigation (United
States  District Court for Middle  District of Florida),  a  consolidated  class
action  brought on behalf of a purported  class of  shareholders  of Sunstar who
purchased  stock of Sunstar  between June 15, 1998 and  December  14, 1999.  The
Consolidated  Amended  Complaint (the  "Complaint")  (which supersedes all prior
class action  complaints)  in this  litigation  purports to assert  claims under
sections  10(b)  (and  Rule  10b-5  promulgated  thereunder)  and  20(a)  of the
Securities  Exchange  Act of  1934,  as  amended,  based  upon  alleged  acts or
omissions of the defendants which allegedly  resulted in  misrepresentations  or
omissions of material information  concerning the financial condition of SunStar
(and its  subsidiary  SunStar  Health  Plan,  Inc.,  a Florida HMO  presently in
receivership). The Complaint also alleges that the Company (which allegedly held
30.5% of SunStar's  common stock  during  SunStar's  fiscal year ending July 31,
1998 and  reduced  its  holdings  to 21.6% at July 31,  2000)  and the  director
defendants   exercised   control  over  SunStar  and  therefore  are  liable  as
"controlling  persons" thereof. On October 23, 2000 the defendants filed motions
to dismiss the Complaint.  The Company  believes that the complaints are without
merit and intends to vigorously defend them.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.

         No matters  were  submitted  to a vote of  stockholders  of the Company
during the fourth quarter of the fiscal year ended July 31, 2000.

                                      -10-
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMPANY'S COMMON STOCK
           AND RELATED STOCKHOLDER MATTERS.

(A)           Market Information
              ------------------

         The  Company's  Common  Stock is quoted on the NASDAQ  National  Market
under the symbol NHHC.  The following  table presents the quarterly high and low
bid  quotations  in the  over-the-counter  market,  as reported by the  National
Association  of Securities  Dealers for the two fiscal years ended July 31, 1999
and 2000.  These  quotations  reflect the  inter-dealer  prices,  without retail
mark-up,  mark-down  or  commission  and may not  necessarily  represent  actual
transactions.
<TABLE>
<CAPTION>
                                                                                          Market Prices
                                                                              --------------------------------------
                                                                                    High                Low
                                                                                    ----                ---
Year ended July 31, 1999
------------------------
<S>                                                                                 <C>                 <C>
1st Quarter..............................................................           $4.75               $4.00
2nd Quarter..............................................................            5.00                4.38
3rd Quarter..............................................................            5.00                2.25
4th Quarter..............................................................            4.75                3.13

Year ended July 31, 2000
------------------------
1st Quarter..............................................................           $4.75               $3.75
2nd Quarter..............................................................            4.25                3.50
3rd Quarter..............................................................            5.06                3.63
4th Quarter..............................................................            5.00                4.00
</TABLE>

(B)           Holders
              -------

         There were  approximately  135 holders of record of Common  Stock as of
October 23, 2000,  excluding  shares held by  depository  companies  for certain
beneficial owners.

(C)           Dividends
              ---------

         The Company has not  declared or paid any cash  dividends on its shares
of Common Stock during the last three fiscal years. It anticipates  that for the
foreseeable  future all earnings  will be retained for use in its business  and,
accordingly,  it does not  intend to pay cash  dividends.  The  Company  did not
declare any cash or stock dividends during the fiscal years ended July 31, 1998,
1999 and 2000.

ITEM 6.  SELECTED FINANCIAL DATA.

         The following  table,  which presents  selected  financial data for the
Company  for each of the last  five  fiscal  years,  has been  derived  from the
Company's audited Consolidated  Financial  Statements.  The data set forth below
should be read in conjunction with the Consolidated Financial Statements in Item
8 of this Report.

                                      -11-
<PAGE>
<TABLE>
<CAPTION>

                                                                Fiscal Years Ended July 31,
                                     ----------------------------------------------------------------------------------
                                            2000             1999            1998             1997            1996
                                     ----------------------------------------------------------------------------------
   STATEMENT OF OPERATIONS DATA:
<S>                                       <C>            <C>             <C>            <C>              <C>
   Revenue...........................     $55,574,000    $38,518,000     $34,313,000    $35,070,000      $38,830,000
   Operating expenses................      51,247,000     36,090,000      31,394,000     31,770,000       35,564,000
   Income from operations............       4,327,000      2,428,000       2,919,000      3,300,000        3,266,000
Other income (loss):
     Gain resulting from sale of
      stock of equity investee......        1,602,000            ---             ---            ---              ---
    Interest income..................         220,000        385,000         547,000        446,000          412,000
    (Loss) from equity investee......             ---       (674,000)     (1,630,000)      (612,000)         (10,000)
    Gain resulting from equity
     investee's stock offering......              ---            ---         331,000            ---        1,548,000
   Income before income taxes........       6,149,000      2,139,000       2,167,000      3,134,000        5,216,000
   Provision for income taxes........       2,058,000      1,001,000         964,000      1,278,000        1,859,000
   Net income........................       4,091,000      1,138,000       1,203,000      1,856,000        3,357,000
   Diluted net income per share of
   common stock......................           $0.81          $0.22           $0.23          $0.35            $0.64
</TABLE>

         The above results  include the operations of SunStar  through April 30,
1996.  Subsequent thereto,  the operations of SunStar are recorded on the equity
method and are reflected above as loss from equity investee.
<TABLE>
<CAPTION>
                                                                        At July 31,
                                     ----------------------------------------------------------------------------------
                                            2000             1999            1998              1997            1996
                                     -----------------------------------------------------------------------------------
BALANCE SHEET DATA:
<S>                                       <C>              <C>             <C>              <C>             <C>
Total assets......................        $30,856,000      $26,092,000     $25,503,000      $25,224,000     $24,421,000
Working capital...................         19,312,000       17,708,000      19,134,000       16,853,000      16,288,000
Retained earnings.................         12,274,000        8,183,000       7,045,000        5,842,000       4,789,000
Stockholders' equity..............         28,486,000       25,013,000      24,281,000       23,360,000      21,504,000
</TABLE>

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

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

         This discussion contains forward-looking statements that are subject to
a number of known and  unknown  risks that,  in  addition  to general  economic,
competitive  and  other  business   conditions,   could  cause  actual  results,
performance  and  achievements  to differ  materially  from those  described  or
implied in the forward-looking statements.

                                      -12-
<PAGE>

         The Company is subject to  external  factors  that could  significantly
impact its business,  including changes in Medicare and Medicaid  reimbursement,
government fraud and abuse  initiatives,  and other such factors that are beyond
the control of the Company.  These factors could cause future  results to differ
materially from historical results.

         The Balanced  Budget Act of 1997, as amended,  (the "Act"),  was signed
into law on August 5, 1997.  Under the Act,  until  October  1,  2000,  Medicare
certified home health agencies were  reimbursed  under an interim payment system
("IPS")  for a two-year  period  prior to the  implementation  of a  prospective
payment system.  Under IPS, home health care providers were reimbursed the lower
of (i) their  actual  costs,  (ii) cost limits  based on 105% of median costs of
freestanding home health agencies,  or (iii) an agency-specific per patient cost
limit,  based on 1994 costs adjusted for inflation.  Prior to the implementation
of IPS,  Medicare  reimbursed  providers on a reasonable  cost basis  subject to
program-imposed cost per visit limitations. Effective October 1, 2000, under the
prospective payment system, the last remaining phase under the Act, Medicare now
reimburses  providers a predetermined base payment.  The payment is adjusted for
the health  condition and care needs of the beneficiary and is also adjusted for
the geographic  differences in wages across the country.  Medicare provides home
health agencies with payments for 60-day "episodes of care".

         The IPS cost limits  were  applied to the  Company's  Connecticut-based
Medicare  certified  nursing agency for the cost period  beginning July 1, 1998.
The Company determined that these new limits would reduce  reimbursement for the
Medicare  services it provides.  Accordingly,  in May 1998, the Company combined
its operations in Connecticut by merging its Medicare certified  subsidiary with
its licensed agency subsidiary to increase operational efficiencies.

         The  implementation  of IPS resulted in a decrease in Medicare  revenue
from the  Company's  Medicare  certified  agency.  In  addition,  the  Company's
operations in New York and New Jersey are dependent  upon  referrals,  primarily
from Medicare certified home health care agencies,  whose reimbursement has been
adversely  affected.  Under  the  prospective  payment  system,  there can be no
assurance  that the  Company's  future  referrals  will not  result  in  reduced
reimbursement rates or reduced volume of business.

         On April 14,  2000,  the Company  acquired,  through  its  wholly-owned
subsidiary  New England,  certain assets of the  Connecticut  operations of U.S.
HomeCare Corp. ("U.S. HomeCare-Connecticut"),  a licensed and Medicare certified
home  health  care  company in the state of  Connecticut.  The  acquisition  was
accounted for utilizing purchase accounting principles.

         On  November  1, 1999,  the  Company  acquired,  through  wholly  owned
subsidiaries  in  Connecticut,  certain  assets  of  Optimum  Care  Services  of
Connecticut,  Inc.,  Optimum Home Health of  Connecticut,  Inc. and Optimum Home
Care of  Connecticut,  Inc. (the "Optimum  Entities").  The assets were acquired
from  a  court-appointed  Chapter  7  Trustee.  The  final  purchase  price  was
determined  through an auction process conducted at the United States Bankruptcy
Court for the District of  Massachusetts.  The Company is operating the acquired
assets under New England and Connecticut Staffing. The Optimum Entities had been
engaged in the  business of  providing  home health  care and  staffing  related
services in Connecticut.  The  acquisition was accounted for utilizing  purchase
accounting principles.

                                      -13-
<PAGE>

         On October 30, 1998, the Company  acquired all the  outstanding  common
shares of  Accredited.  Accredited  is a licensed  home health care company that
provides home health care services in Bergen,  Hudson,  Passaic,  Essex, Morris,
Union,  Somerset  and  Middlesex  Counties,  New  Jersey.  The  acquisition  was
accounted for utilizing purchase accounting principles.

         On August 10, 1998,  the Company  acquired,  through Allen Health Care,
its wholly-owned  subsidiary,  certain assets of Bryan Employment Agency,  Inc.,
d/b/a Bryan Home Care  Services  ("Bryan Home Care"),  a New York  licensed home
health care company which provides home care services in Westchester County, New
York.  The   acquisition  was  accounted  for  utilizing   purchase   accounting
principles.

         SunStar  has been a  publicly  traded  corporation  since  May of 1996.
SunStar,  formerly a wholly-owned  subsidiary of the Company,  had comprised the
Company's Florida  outpatient  medical center  operations.  In May 1996, SunStar
completed its initial public offering  following a complete change in management
and the adoption of a business plan by new management for the establishment of a
health maintenance organization. As a result, SunStar was no longer consolidated
with the Company for  accounting  purposes.  The Company has utilized the equity
method of accounting for its investment in SunStar. In February 2000,  SunStar's
sole operating subsidiary effectively  discontinued  operations.  As of July 31,
2000,  the  Company's  ownership  percentage  of SunStar was 21.6% and Company's
value of its investment in SunStar is $0.

RESULTS OF OPERATIONS
---------------------
<TABLE>
<CAPTION>
                                                                             FISCAL YEAR ENDED JULY 31,
                                                                ------------------------------------------------------
                                                                        2000              1999              1998
                                                                        ----              ----              ----
<S>                                                                    <C>               <C>                 <C>
Net patient revenue                                                    100.0%            100.0%              100.0%
Cost of revenue                                                         64.2              65.8                64.5
General and administrative                                              25.8              26.4                25.9
Bad debt expense                                                         1.0                ---                ---
Amortization of intangibles                                              1.2               1.4                 1.1
                                                                       -----             -----               -----

Total operating expenses                                                92.2              93.6                91.5
Income from operations                                                   7.8               6.4                 8.5
Gain resulting from sale of stock of equity investee
                                                                         2.9               ---                ---
Interest income                                                          0.4               1.0                 1.6
(Loss) from equity investee                                               ---             (1.8)               (4.8)
Gain resulting from equity investee's stock offering                      ---               ---               ---
                                                                       -----             -----               -----
Income before income taxes                                              11.1               5.6                 6.3
Provision for income taxes                                               3.7               2.6                 2.8
                                                                       --------          --------            -----
Net income                                                               7.4%              3.0%                3.5%
                                                                         ===               ===                 ===
</TABLE>

                                      -14-
<PAGE>

YEAR ENDED JULY 31, 2000 COMPARED TO YEAR ENDED JULY 31, 1999

         For the fiscal year ended July 31, 2000  ("fiscal  2000"),  net patient
revenue increased $17,056,000,  or 44.3% to $55,574,000 from $38,518,000 for the
fiscal year ended July 31, 1999 ("fiscal  1999").  This increase is attributable
to  $17,877,000  of net  patient  revenue  realized  from the  expansion  of the
Company's  operations in Connecticut through the opportunity  represented by the
liquidation  of the Optimum  Entities,  the  acquisition  on November 1, 1999 of
certain  assets of the  Optimum  Entities  from the  bankruptcy  trustee and the
successful  penetration of the available market share,  offset by the decline in
same source net patient  revenue of ($821,000).  As a result of such  expansion,
net  patient  revenue  from New  England  increased  $14,109,000,  or  145.7% to
$23,794,000 for fiscal 2000 from $9,685,000 for fiscal 1999. To a lesser degree,
net  patient  revenue  generated  from  New  England  also  benefited  from  the
acquisition  on April 14, 2000 of certain  assets of U.S.  HomeCare-Connecticut.
Also as a  result  of such  expansion,  net  patient  revenue  from  Connecticut
Staffing,  the Company's new subsidiary that provides  supplemental  staffing in
the state of Connecticut  generated net patient revenue of $3,768,000 for fiscal
2000 as compared to $0 for fiscal 1999.  During fiscal 2000, net patient revenue
from Allen Health Care decreased  ($1,282,000),  or (5.1%),  to $23,627,000 from
$24,909,000 for fiscal 1999. This decrease is attributable to a decline in hours
and,  in some  cases,  a  decrease  in  reimbursement  rates  from the  Medicare
certified home health care agencies with whom Allen Health Care contracts,  as a
result of the  implementation  of IPS. Net patient  revenue from  Accredited for
fiscal 2000 was  $4,385,000  as compared to  $3,924,000  for fiscal  1999.  This
increase is  attributable to twelve months of revenue in fiscal 2000 as compared
to nine months of revenue in fiscal 1999.

         Gross profit  margin  increased to 35.8% for fiscal 2000 from 34.2% for
fiscal 1999.  This increase is attributable  to the higher  reimbursement  rates
realized  in the  expansion  into the market  previously  served by the  Optimum
Entities and U.S. HomeCare-Connecticut.

         General and administrative expenses increased $4,137,000,  or 40.6%, to
$14,320,000  in fiscal 2000 from  $10,183,000  in fiscal 1999.  This increase is
attributable to the additional general and  administrative  expenses incurred in
connection with the expansion into the market  previously  served by the Optimum
Entities and U.S. HomeCare-Connecticut.  As a percentage of net patient revenue,
general and administrative expenses decreased to 25.8% in fiscal 2000 from 26.4%
in fiscal 1999.

         The  Company  recorded a provision  of $595,000 in bad debt  expense in
fiscal  2000 as  compared to $0 in fiscal  1999.  As the  Company  does not have
experience  with many of the new payor  sources with which it now contracts as a
result of the  expansion  into the new markets in  Connecticut,  the Company has
established a reserve against its accounts receivable.  In addition, the Company
has experienced  increases in accounts  receivable  balances with certain of the
Medicare certified agencies with whom it contracts.  Accordingly, the Company is
reserving  against accounts  receivable in the event that some of these accounts
will have to be written off. The Company is closely  monitoring the credit terms
being extended to these agencies.

         Amortization of intangibles  increased $110,000,  or 20% to $660,000 in
fiscal 2000 from $550,000 in fiscal 1999.  This increase is  attributable to the
amortization  of goodwill and  intangibles  associated  with the  acquisition of
certain  assets of the Optimum  Entities  and U.S.  HomeCare-Connecticut  during
fiscal 2000.

                                      -15-
<PAGE>

         As  a  result  of  the  foregoing,  income  from  operations  increased
$1,899,000,  or 78.2% to  $4,327,000  in fiscal 2000 from  $2,428,000  in fiscal
1999.

         Interest income decreased ($165,000), or (42.9%), to $220,000 in fiscal
2000 from $385,000 in fiscal 1999. This decrease is attributable to cash used in
investing  activities  resulting  from the  acquisition of certain assets of the
Optimum Entities and U.S. HomeCare-Connecticut.

         During fiscal 2000, the Company recorded a gain resulting from the sale
of stock of equity  investee of  $1,602,000  resulting  from the sale of 259,510
shares of SunStar.  During fiscal 1999, the Company  recorded a loss from equity
investee  of  ($674,000),  representing  the  Company's  share  of the net  loss
reported by SunStar for the same period.

         The Company's  effective tax rate  decreased to 33.5% in fiscal 2000 as
compared to 46.8% in fiscal 1999.  This decrease is attributable to both a lower
effective  tax rate on the  gain  resulting  from  the  sale of stock of  equity
investee  in fiscal  2000 and to no income tax  benefit  recorded in fiscal 1999
related to the loss from equity investee.  Excluding the gain resulting from the
sale of stock of an equity  investee  and the loss  from  equity  investee,  the
effective tax rate  increased to 41.3% in fiscal 2000 from 35.6% in fiscal 1999.
This  increase  is the  result  of a  benefit  recorded  in  fiscal  1999 for an
overaccrual of taxes in fiscal 1998.

         Net income increased  $2,953,000,  or 259%, to $4,091,000,  or $.81 per
share in fiscal 2000 from $1,138,000, or $.22 per share in fiscal 1999.

YEAR ENDED JULY 31, 1999 COMPARED TO YEAR ENDED JULY 31, 1998

         For fiscal 1999, net patient revenue increased  $4,205,000,  or 12%, to
$38,518,000  from  $34,313,000  for the fiscal year ended July 31, 1998 ("fiscal
1998"). During fiscal 1999, net patient revenue from Allen Health Care increased
$2,310,000,  or 10.2%,  to $24,909,000  from  $22,599,000  for fiscal 1998. This
increase is  attributable  to the revenue  generated from the purchase in August
1998 of Bryan Home Care of  $5,737,000,  offset by the  decline  in same  source
revenue of  ($3,427,000).  The decline in same source revenue is attributable to
the continued  decline in hours,  and in some cases, a decrease in reimbursement
rates from the  Medicare  certified  care  agencies  with whom Allen Health Care
contracts,  as a result of the  implementation  of IPS. Net patient revenue from
New England decreased over the periods  ($2,029,000),  or (17.3%), to $9,685,000
from  $11,714,000.  This  decrease  is  attributable  to the decline in Medicare
revenue of ($1,605,000) and a decline in non-Medicare revenue of ($424,000). The
decrease in both Medicare and  non-Medicare  revenue is the result of the change
in Medicare  reimbursement  from cost  reimbursement to IPS. Net patient revenue
from Accredited for fiscal 1999 was $3,924,000.

         Gross profit  margin  decreased to 34.2% for fiscal 1999 from 35.5% for
fiscal  1998.  This  decrease  is  attributable  to  the  decreases  in  certain
reimbursement  rates from other  existing  Medicare  certified  home health care
agencies  that the  Company  contracts  with,  as a result of the  change in the
Medicare reimbursement system.

         General and administrative expenses increased $1,297,000,  or 14.6%, to
$10,183,000  in fiscal 1999 from  $8,886,000  in fiscal 1998.  This  increase is
attributable to the additional general and administrative  expenses of the three
branch offices which the Company acquired in the acquisitions of both Bryan Home
Care and  Accredited,  offset  by the  decline  in  general  and

                                      -16-
<PAGE>

administrative  expenses  of  New  England,  as a  result  of the  combining  of
operations in Connecticut to offset the  implementation  of IPS. As a percentage
of net patient revenue,  general and administrative  expenses increased slightly
to 26.4% in fiscal 1999 from 25.9% in fiscal 1998.

         Amortization of intangibles  increased $177,000,  or 47.5%, to $550,000
in fiscal 1999 from $373,000 in fiscal 1998.  This increase is  attributable  to
the amortization of goodwill and intangibles  associated with the acquisition of
Bryan Home Care and Accredited in fiscal 1999.

         As  a  result  of  the  foregoing,  income  from  operations  decreased
($491,000),  or (16.8%),  to $2,428,000 in fiscal 1999 from $2,919,000 in fiscal
1998.

         Interest income decreased ($162,000), or (29.6%), to $385,000 in fiscal
1999 from  $547,000  in fiscal  1998.  This  decrease is  attributable  to lower
outstanding cash balances  resulting from cash used to acquire certain assets of
Bryan Home Care and the stock of Accredited.

         The Company  recorded a loss from  equity  investee  of  ($674,000)  in
fiscal 1999 as compared to a loss of  ($1,603,000)  in fiscal 1998. In addition,
in fiscal 1998,  as a result of a private  placement of common stock by SunStar,
the Company  adjusted  the carrying  value of its  investment  in SunStar  which
resulted in a gain of $331,000.  As of July 31,  1999,  the  Company's  carrying
value of its investment in SunStar was $0.

         The Company's  effective tax rate  increased to 46.8% in fiscal 1999 as
compared to 44.4 in fiscal 1998.  This increase is attributable to no income tax
benefit  recorded in fiscal 1999, as compared to  ($306,000)  recorded in fiscal
1998 related to the  Company's  share of SunStar's  net loss.  Excluding the tax
effect of loss from equity  investee and gain resulting  from equity  investee's
stock offering,  the effective tax rate decreased  slightly to 35.6% as compared
to 36.6% in fiscal 1998.

         Net income decreased ($65,000),  or (6.7%), to $1,138,000,  or $.22 per
diluted share,  in fiscal 1999 from  $1,203,000,  or $.23 per diluted share,  in
fiscal 1998.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         Current  assets  increased  to  $21,682,000  and  current   liabilities
increased to  $2,370,000,  respectively,  at July 31, 2000.  This resulted in an
increase in working capital of $1,604,000  from  $17,708,000 at July 31, 1999 to
$19,312,000 at July 31, 2000. Cash and cash equivalents  decreased  ($2,586,000)
to  $4,856,000  at July 31, 2000 from  $7,442,000  at July 31, 1999 and accounts
receivable increased $5,256,000 to $15,715,000 at July 31, 2000 from $10,459,000
at July 31, 1999.  The decrease in cash and increase in accounts  receivable  is
primarily attributable to the acquisitions made by the Company of certain assets
of the Optimum Entities and U.S.  HomeCare-Connecticut for an aggregate purchase
price of  $4,800,000  in cash,  offset by the proceeds from the sale of stock of
equity investee in the amount of $1,602,000.

         On August 25, 2000, the Company acquired certain assets of Health Force
Owned Ltd., a New Jersey licensed home health care agency located in Hackensack,
New Jersey for approximately  $1,822,000 in cash, including acquisition costs of
$42,000.

                                      -17-
<PAGE>

         Net cash provided by operating activities was $1,305,000 in fiscal 2000
as compared with $835,000 in fiscal 1999. The increase in operating cash flow of
$470,000,  or 56.3%, is attributable to an increase in cash flow from operations
of $1,075,000,  offset by the net changes in current  assets and  liabilities of
($605,000).

         Investing  activities  in  fiscal  2000 used  cash of  ($3,273,000)  as
compared to cash used of ($3,558,000) in fiscal 1999. The cash used in investing
activities for fiscal 2000 consisted of the acquisitions made by the Company and
the  purchase of  equipment,  offset by the  proceeds of sale of stock of equity
investee, proceeds of investments and sale of assets. The cash used in investing
activities in fiscal 1999 consisted of the acquisitions  made by the Company and
the purchase of  equipment,  offset by the proceeds of  investments  and sale of
assets.

         Financing activities in fiscal 2000 used cash of ($618,000) as compared
to  ($827,000) in fiscal 1999.  The cash used in financing  activities in fiscal
2000  reflects the  purchase of treasury  shares of  ($618,000)  pursuant to the
Company's stock  repurchase  plan. The purchase of treasury shares of ($406,000)
and the  repayment  of notes  payable of  ($421,000)  to the former  officers of
Accredited resulted in the cash used in financing activities in fiscal 1999.

         The nature of the Company's business requires weekly payments to health
care personnel at the time services are rendered. The Company typically receives
payment  for  these  services  on a basis  of 90 to 120  days  with  respect  to
contracted  and  insurance  business  and 15 to 45 days with  respect to certain
governmental payors, such as Medicare and Medicaid programs. Accounts receivable
turnover was 89 days in fiscal 2000 and 92 days in fiscal 1999.

         The Company has available a $2,000,000  secured line of credit with its
bank.  In addition,  a subsidiary  of the Company has a secured  advised line of
credit.  The maximum amount that can be borrowed under the secured  advised line
of  credit  may not  exceed  the  lesser  of  eligible  accounts  receivable  or
$2,000,000.   Both  credit  facilities  bear  interest  at  the  alternate  base
commercial  lending rate of the bank and expire  January 31,  2001.  At July 31,
2000, there was no outstanding  balance under either line of credit. The Company
is currently considering increasing its credit facilities to finance operations,
including continuing to make acquisitions in the home health care field.

         The  Company  intends  to meet its short  term and long term  liquidity
needs with its current cash balances, cash flow from operations and existing and
future lines of credit.

         In  October  2000,  the Board of  Directors  extended  for one year its
program to repurchase its Common Stock.  Purchases in the aggregate amount of up
to $1,000,000 in purchase price during the one-year extension would be made from
time to time in the open market and through privately  negotiated  transactions,
subject to general  market and other  conditions.  The buyback  program  will be
financed out of existing cash or cash equivalents.

         Other than set forth  herein,  the Company has no material  commitments
for capital expenditures.

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

                                      -18-
<PAGE>

INFLATION AND SEASONALITY

         The rate of inflation had no material  effect on operations  for fiscal
2000.  The effects of inflation  on personnel  costs in the future could have an
adverse  effect on  operations,  as the Company may not be able to increase  its
charges for services rendered. The Company's business is not seasonal.

YEAR 2000 COMPLIANCE

         The Year 2000 issue is the result of  date-sensitive  devices,  systems
and computer  programs that were  deployed  using two digits rather than four to
define  the  applicable  year.  Any  such  technologies  may  recognize  a  year
containing "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculation  causing disruption of operations  including,
among other things, a temporary  inability to process  transactions or engage in
similar normal business activities.

         The Company did not experience any  significant  malfunctions or errors
in its information or business  systems when the date changed from 1999 to 2000.
Based on its  operations  since January 1, 2000, the Company does not expect any
significant  problems  related to the Year 2000 issue.  However,  it is possible
that the full  impact of the date  change  has not been  fully  recognized.  For
example,  it is possible  that Year 2000 or similar  issues,  such as  leap-year
related problems,  may occur with financial closings.  The Company believes that
any such problems will be minor and easily corrected.  In addition,  the Company
could still be negatively  impacted if the Year 2000 or similar issues adversely
affect its  customers or suppliers.  Currently,  the Company is not aware of any
significant Year 2000 or similar problems that have arisen with its customers or
suppliers.

DISCLOSURE REGARDING PRIVATE LITIGATION REFORM ACT OF 1995

         Except for  historical  information  contained  in this  report on Form
10-K, certain matters set forth herein are  forward-looking  statements that are
dependent on certain risks and  uncertainties,  including  such  factors,  among
others,  as  market  acceptance,  market  demand  pricing,  changing  regulatory
environment  (including in particular the impact of recent  prospective  payment
Medicare  regulations),  changing economic conditions,  risks in new product and
service development,  the effect of the Companies accounting policies,  risks in
connection with acquisitions,  ability to attract and retain qualified personnel
in a strong labor market and other risks detailed in the Company's  filings with
the Securities and Exchange Commission.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         None.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  financial  information  required  by this item is set forth in the
Consolidated Financial Statements on pages F-1 through F-23.

                                      -19-
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
           ON ACCOUNTING AND FINANCIAL DISCLOSURE.

         There  were  no  changes  in,  or  disagreements  with,  the  Company's
accountants during fiscal 2000.


                                      -20-
<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
         ---------------------------------------------------

ITEM 11. EXECUTIVE COMPENSATION.
         -----------------------

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
         --------------------------------------------------------------

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
         -----------------------------------------------

         The  information  required  by each of the items of Part III is omitted
from this Report.  Pursuant to the General  Instruction  G(3) to Form 10-K,  the
information  is included in the  Company's  Proxy  Statement for its 2000 Annual
Meeting of  Stockholders  to be held on  December 7, 2000,  and is  incorporated
herein by reference.  The Company  intends to file such Proxy Statement with the
Securities and Exchange Commission not later than November 28, 2000.



                                      -21-
<PAGE>



                                     PART IV

ITEM 14.   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   Schedule   (see   index  to  the
consolidated financial statements).




                                      -22-
<PAGE>


                         NATIONAL HOME HEALTH CARE CORP.
                         -------------------------------
                                AND SUBSIDIARIES
                                ----------------

                        REPORT ON AUDITS OF CONSOLIDATED
                        --------------------------------
                              FINANCIAL STATEMENTS
                              --------------------

                         THREE YEARS ENDED JULY 31, 2000
                         -------------------------------


<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                ------------------------------------------------

              REPORT ON AUDITS OF CONSOLIDATED FINANCIAL STATEMENTS
              -----------------------------------------------------

                         THREE YEARS ENDED JULY 31, 2000
                         -------------------------------


                                    CONTENTS
                                    --------
<TABLE>
<CAPTION>
                                                                                                           Page

CONSOLIDATED FINANCIAL STATEMENTS:
<S>                                                                                                           <C>
   Report of Holtz Rubenstein & Co., LLP, Independent

     Certified Public Accountants                                                                           F-2

   Report of Richard A. Eisner & Company, LLP, Independent
     Certified Public Accountants                                                                           F-3

   Balance sheets                                                                                           F-4

   Statements of earnings                                                                                   F-5

   Statements of changes in stockholders' equity                                                            F-6

   Statements of cash flows                                                                                 F-7

   Notes to financial statements                                                                        F-8 - F-20


FINANCIAL STATEMENT SCHEDULE:

   Independent Auditors' Report on Schedule,
     Holtz Rubenstein & Co., LLP                                                                           F-21

   Independent Auditors' Report on Schedule,
     Richard A. Eisner & Company, LLP                                                                      F-22

   Schedule II - Valuation and qualifying accounts                                                         F-23
</TABLE>

<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

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 of July 31, 2000 and 1999 and the related
consolidated  statements of earnings,  changes in stockholders'  equity and cash
flows for the years then ended. These consolidated  financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated  financial  statements based on our audits. We did
not audit the financial statements of SunStar Healthcare, Inc., a corporation in
which the Company had a 30.5% equity interest,  which  statements  reflect a net
loss of ($1,631,000)  for the period ended December 31, 1998.  Those  statements
were audited by other auditors whose report has been furnished to us; insofar as
our  opinion  on the 1999  consolidated  financial  statements  relates  to data
included for SunStar Healthcare, Inc. it is based solely on their report.

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 and the report of other auditors provide a reasonable
basis for our opinion.

In our  opinion,  based upon our audits and the report of other  auditors,  with
respect to SunStar  Healthcare as described above,  the  consolidated  financial
statements  referred to above  present  fairly,  in all material  respects,  the
consolidated   financial  position  of  National  Home  Health  Care  Corp.  and
Subsidiaries as of July 31, 2000 and 1999, and the consolidated results of their
operations  and their  consolidated  cash  flows for the years  then  ended,  in
conformity with generally accepted accounting principles.

/s/ Holtz Rubenstein & Co., LLP
-------------------------------
Holtz Rubenstein & Co., LLP

Melville, New York
October 3, 2000

                                      F-2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated statements of earnings, changes in
stockholders'  equity and cash flows of  National  Home  Health  Care Corp.  and
subsidiaries  for the year ended July 31, 1998.  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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements enumerated above present fairly, in all
material  respects,  the  consolidated  results of operations  and cash flows of
National  Home Health Care Corp.  and  subsidiaries  for the year ended July 31,
1998, in conformity with generally accepted accounting principles.

/s/ Richard A. Eisner & Company, LLP
------------------------------------
Richard A. Eisner & Company, LLP



New York, New York
October 7, 1998

                                      F-3
<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                ------------------------------------------------

                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
<TABLE>
<CAPTION>

                                                                                           July 31,
                                                                            ------------------------------------
           ASSETS                                                                2000                  1999
           ------                                                           --------------        --------------

CURRENT ASSETS:
<S>                                    <C>
   Cash (including cash equivalents of $2,852,000
     and $6,664,000, respectively)                                          $    4,856,000        $    7,442,000
   Investments - available for sale                                                 18,000               178,000
   Accounts receivable, less allowance for doubtful
     accounts of $673,000 and $392,000, respectively                            15,715,000            10,459,000
   Income taxes receivable                                                              -                110,000
   Prepaid expenses and other assets                                               589,000               181,000
   Deferred taxes                                                                  504,000               417,000
                                                                            --------------        --------------
       Total current assets                                                     21,682,000            18,787,000

Furniture, equipment and leasehold improvements, net                               760,000               543,000
Excess of cost over fair value of net assets acquired, net                       6,945,000             5,334,000
Other intangible assets                                                          1,257,000             1,239,000
Deposits and other assets                                                          212,000               189,000
                                                                            --------------        --------------

                                                                            $   30,856,000        $   26,092,000
                                                                            ==============        ==============

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

CURRENT LIABILITIES:
   Accounts payable and accrued expenses                                    $    2,203,000        $    1,079,000
   Income taxes payable                                                            167,000                    -
                                                                            --------------        --------------
       Total current liabilities                                                 2,370,000             1,079,000
                                                                            --------------        --------------

COMMITMENTS, CONTINGENCIES
   AND OTHER MATTERS

STOCKHOLDERS' EQUITY:
   Common stock, $.001 par value, authorized
     20,000,000 shares, issued 6,228,746 shares                                      6,000                 6,000
   Additional paid-in capital                                                   18,525,000            18,525,000
   Retained earnings                                                            12,274,000             8,183,000
                                                                            --------------        --------------
                                                                                30,805,000            26,714,000
   Less treasury stock (1,276,778 and 1,124,936 shares) - at cost                2,319,000             1,701,000
                                                                            --------------        --------------

       Total stockholders' equity                                               28,486,000            25,013,000
                                                                            --------------        --------------

                                                                            $   30,856,000        $   26,092,000
                                                                            ==============        ==============
</TABLE>

                 See notes to consolidated financial statements

                                      F-4
<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                ------------------------------------------------

                       CONSOLIDATED STATEMENTS OF EARNINGS
                       -----------------------------------
<TABLE>
<CAPTION>
                                                                              Years Ended
                                                                               July 31,
                                                      ----------------------------------------------------------
                                                            2000                 1999                  1998
                                                      ---------------       --------------        --------------
<S>                                                   <C>                   <C>                   <C>
NET PATIENT REVENUE                                   $    55,574,000       $   38,518,000        $   34,313,000
                                                      ---------------       --------------        --------------
OPERATING EXPENSES:
   Cost of revenue                                         35,672,000           25,357,000            22,135,000
   General and administrative                              14,320,000           10,183,000             8,886,000
   Bad debt expense                                           595,000                   -                     -
   Amortization of intangibles                                660,000              550,000               373,000
                                                      ---------------       --------------        --------------
                                                           51,247,000           36,090,000            31,394,000
                                                      ---------------       --------------        --------------

INCOME FROM OPERATIONS                                      4,327,000            2,428,000             2,919,000

OTHER INCOME (LOSS):
   Gain resulting from sale of
     stock of equity investee                               1,602,000                   -                     -
   Interest income                                            220,000              385,000               547,000
   Loss from equity investee                                       -              (674,000)           (1,630,000)
   Gain resulting from equity investee's
     stock offering                                                -                    -                331,000
                                                      ---------------       --------------        --------------
                                                            1,822,000             (289,000)             (752,000)
                                                      ---------------       --------------        --------------

INCOME BEFORE INCOME TAXES                                  6,149,000            2,139,000             2,167,000

PROVISION FOR INCOME TAXES                                  2,058,000            1,001,000               964,000
                                                      ---------------       --------------        --------------

NET INCOME                                            $     4,091,000       $    1,138,000        $    1,203,000
                                                      ===============       ==============        ==============

NET INCOME PER COMMON SHARE:
     Basic                                                   $.81                  $.22                  $.23
                                                             ====                  ====                  ====

     Diluted                                                 $.81                  $.22                  $.23
                                                             ====                  ====                  ====

WEIGHTED AVERAGE NUMBER
   OF SHARES OUTSTANDING:
     Basic                                                  5,028,232            5,160,470             5,231,248
                                                            =========            =========             =========

     Diluted                                                5,041,362            5,215,487             5,307,158
                                                            =========            =========             =========
</TABLE>

                 See notes to consolidated financial statements

                                      F-5
<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                ------------------------------------------------

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
           ----------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                                    Treasury Stock
                                                              Common Stock                                          --------------
                                                              ------------                  Additional
                                                           Number of                          Paid-in          Retained
                                                           Shares              Amount         Capital          Earnings
                                                           ------              ------         -------          --------
<S>           <C> <C>                                       <C>           <C>          <C>                <C>
Balance, July 31, 1997                                      6,208,646     $   6,000    $    18,476,000    $   5,842,000

Net income                                                         -             -                  -         1,203,000
Acquisition of treasury shares, $4.65 per share                    -             -                  -                -
Exercise of common stock options                               20,100            -              49,000               -
                                                           ----------     ---------    ---------------    -------------

Balance, July 31, 1998                                      6,228,746         6,000         18,525,000        7,045,000

Net income                                                         -             -                  -         1,138,000
Acquisition of treasury shares, $4.23 per share                    -             -                  -                -
                                                           ----------     ---------    ---------------    -------------

Balance, July 31, 1999                                      6,228,746         6,000         18,525,000        8,183,000

Net income                                                         -             -                  -         4,091,000
-
Acquisition of treasury shares, $4.07 per share                    -             -                  -                -
                                                           ----------     ---------    ---------------    -------------

Balance, July 31, 2000                                     6,228,746,     $   6,000    $    18,525,000    $  12,274,000
                                                           ==========     =========    ===============    =============
</TABLE>
<TABLE>
<CAPTION>
                                                              Treasury Stock
                                                              --------------

                                                                       Number of
                                                                       Shares            Cost
                                                                       ------            ----

<S>                                                                   <C>            <C>
Balance, July 31, 1997                                                957,500        (964,000)

Net income                                                                 -                -
Acquisition of treasury shares, $4.65 per share                        71,379        (331,000)
Exercise of common stock options                                           -                -
                                                                 ------------              ---

Balance, July 31, 1998                                              1,028,879      (1,295,000)

Net income                                                                 -                -
Acquisition of treasury shares, $4.23 per share                        96,057        (406,000)
                                                                 ------------        --------

Balance, July 31, 1999                                              1,124,936      (1,701,000)

Net income                                                                 -
-
Acquisition of treasury shares, $4.07 per share                       151,842        (618,000)
                                                                 ------------        --------

Balance, July 31, 2000                                              1,276,778      (2,319,000)
                                                                 ============      ==========
</TABLE>

                See notes to consolidated financial statements.

                                      F-6
<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                ------------------------------------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                                   Years Ended
                                                                                    July 31,
                                                               -------------------------------------------------
                                                                     2000             1999               1998
                                                               --------------     -------------    -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>           <C>                                                           <C>               <C>
   Net income $                                                4,091,000    $     1,138,000   $    1,203,000
   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization                                  881,000           682,000          479,000
       Gain resulting from sale of equity investee stock           (1,602,000)               -                -
       Provision for doubtful accounts net of write-offs              281,000                -            32,000
       Deferred tax                                                   (87,000)               -          (375,000)
       Gain on equity investee's stock offering                            -                 -          (331,000)
       Loss from equity investee                                           -            674,000        1,630,000
       (Gain) loss on sale of assets                                    2,000            (3,000)              -
       Changes in operating assets and liabilities:
         (Increase) decrease in assets:
           Accounts receivable                                     (3,231,000)       (1,400,000)        (125,000)
           Prepaid expenses and other current assets                 (431,000)            7,000          (48,000)
         Increase (decrease) in liabilities:
           Accounts payable, accrued expenses
              and other liabilities                                 1,124,000           (62,000)        (318,000)
           Income taxes receivable (payable)                          277,000             8,000         (145,000)
           Estimated third-party payor settlements                         -           (209,000)         (14,000)
                                                               --------------     -------------    -------------
       Net cash provided by operating activities                    1,305,000           835,000        2,016,000
                                                               --------------     -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of furniture, equipment
     and leasehold improvements                                      (257,000)         (195,000)        (123,000)
   Proceeds from sale of assets                                        23,000             6,000               -
   Proceeds of investments                                            160,000           310,000           20,000
   Purchase of assets of businesses                                (4,801,000)       (1,943,000)              -
   Purchase of Accredited Health Services, Inc.,
     net of cash acquired                                                  -         (1,736,000)              -
   Proceeds from sale of equity investee stock                      1,602,000                -            37,000
                                                               --------------     -------------    -------------
       Net cash used in investing activities                       (3,273,000)       (3,558,000)         (66,000)
                                                               --------------     -------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase of treasury shares                                       (618,000)         (406,000)        (331,000)
   Proceeds from exercise of stock options                                 -                 -            49,000
   Repayment of notes payable                                              -           (421,000)              -
                                                               --------------     -------------    -------------
       Net cash used in financing activities                         (618,000)         (827,000)        (282,000)
                                                               --------------     -------------    -------------

Net (decrease) increase in cash and cash equivalents               (2,586,000)       (3,550,000)       1,668,000
Cash and cash equivalents, beginning of year                        7,442,000        10,992,000        9,324,000
                                                               --------------     -------------    -------------

Cash and cash equivalents, end of year                         $    4,856,000     $   7,442,000    $  10,992,000
                                                               ==============      ============    =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for:
     Interest                                                  $       16,000     $       4,000    $       2,000
                                                               ==============     =============    =============
     Income taxes                                              $    1,870,000     $   1,100,000    $   1,512,000
                                                               ==============     =============    =============
</TABLE>

Supplemental  disclosure of noncash investing and financing activities (see Note
6).

                 See notes to consolidated financial statements
                                      F-7
<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                ------------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                         THREE YEARS ENDED JULY 31, 2000
                         -------------------------------

1.       BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
         ---------------------------------------------------------------------

         a.       Nature of business
                  ------------------

                  National  Home  Health  Care  Corp.  and   Subsidiaries   (the
"Company") is a provider of home health care services,  including  nursing care,
personal  care and  other  specialized  therapies.  Due to the  similarities  in
services, management considers their operations to be one reportable segment.

         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 and allowance for doubtful accounts
                  -------------------------------------------------------

                  Net patient  service  revenues is  reported at  estimated  net
realizable  amounts from patients,  third-party  payors, and others for services
rendered and includes estimated  retroactive  revenue  adjustments due to future
audits,  reviews, and investigations.  Retroactive adjustments are considered in
the  recognition  of revenue  on an  estimated  basis in the period the  related
services  are  rendered,  and such  amounts are  adjusted  in future  periods as
adjustments  become  known or as years are no  longer  subject  to such  audits,
reviews  and  investigations.  A  provision  for  doubtful  accounts is made for
revenue  estimated to be uncollectible  and is adjusted based upon  management's
evaluation of current industry conditions,  historical collection experience and
other relevant factors which, in the opinion of management,  deserve recognition
in estimating the allowance for doubtful accounts.

                  Under Medicaid,  Medicare and other  cost-based  reimbursement
programs,  the Company is reimbursed  for services  rendered to covered  program
patients as determined by reimbursement formulas. Laws and regulations governing
these programs are extremely complex and subject to interpretation. As a result,
there is at least a reasonable  possibility that recorded  estimates will change
by a material amount in the near term

                  Approximately  36%, 34% and 40% of net patient revenue for the
fiscal  years ended July 31,  2000,  1999 and 1998,  respectively,  were derived
under federal and state third-party reimbursement programs

                  In December  1999,  the  Securities  and  Exchange  Commission
("SEC")  issued Staff  Accounting  Bulletin  No. 101,  "Revenue  Recognition  in
Financial Statements" ("SAB 101"). SAB 101 summarizes certain of the SEC's views
in applying generally accepted  accounting  principles to revenue recognition in
financial statements. SAB 101 is not a rule or

                                      F-8
<PAGE>
<TABLE>
<CAPTION>

<S>  <C>
1.   BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Cont'd)
     --------------------------------------------------------------------
</TABLE>

interpretation of the SEC; however, it represents  interpretations and practices
followed  by the  Division  of  Corporation  Finance and the Office of the Chief
Accountants  in  administering  the  disclosure   requirements  of  the  Federal
securities laws. The Company does not believe that the interpretations  outlined
in SAB 101 will have an impact on the Company's revenue recognition policies.

         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 acquired
                  --------------------------------------------------------

                  The excess of cost over the fair value of net assets  acquired
(goodwill)  is  being  amortized  principally  over a  period  of 20  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.

         g.       Net income per share
                  --------------------

                  The basic  calculation  is  determined  by dividing net income
attributable to common shares  outstanding (the basic numerator) by the weighted
average number of common shares outstanding (the basic  denominator)  during the
period.

                  The diluted  calculation  is determined by adjusting the basic
numerator  for any changes in income or loss that would  result from the assumed
exercise  of  potentially   issued  common  shares.   Additionally,   the  basic
denominator is increased to include the additional  number of common shares that
would be outstanding if the potentially issued common shares had been issued, if
dilutive.  Potentially  issued common  shares,  consisting  of options,  are not
included  in this  calculation  where  the  effect  of the  inclusion  would  be
antidilutive.  The treasury stock method is used to reflect the dilutive  effect
of outstanding options and warrants.

                  The reconciliation for the years ended July 31, 2000, 1999 and
1998 are as follows:

                                      F-9
<PAGE>
<TABLE>
<CAPTION>

<S>  <C>
1.   BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Cont'd)
     --------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                                              Years Ended July 31,
                                   -----------------------------------------------------------------------------
                                             2000                     1999                       1998
                                   -----------------------  -------------------------   ------------------------
                                     Income       Shares      Income         Shares        Income       Shares
                                   ----------   ----------  ------------  -----------   -----------  -----------
           Basic EPS:
<S>                                <C>           <C>         <C>            <C>         <C>            <C>
              Net income           $4,091,000    5,028,232   $ 1,138,000    5,160,470   $1,203,000    5,231,248
           Effect of dilutive
              securities -
              common
              stock options                -        13,130            -        55,017            -       75,910
                                   ----------   ----------   -----------  -----------   -----------  -----------

           Diluted EPS             $4,091,000    5,041,362   $1,138,000     5,215,487   $1,203,000    5,307,158
                                   ==========    =========   ==========     =========   ==========    =========
</TABLE>

         h.       Investments
                  -----------

                  The Company's investments are accounted for in accordance with
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.

                  Investment  securities available for sale at July 31, 2000 and
1999 are summarized as follows:
<TABLE>
<CAPTION>
                                                                                       Amortized Cost (1)
                                                                                --------------------------------
                                                                                   2000                  1999
                                                                                ----------           -----------
<S>                                                                                 <C>                   <C>
           Floating rate debentures issued by New York State,
              maturing in one to five years                                     $       -            $   145,000
           Floating rate debentures issued by New York State,
              maturing in five to ten years                                             -                 15,000
           Other                                                                    18,000                18,000
                                                                                ----------           -----------
                                                                                $   18,000           $   178,000
                                                                                ==========           ===========
</TABLE>
                  (1) Amortized  cost  approximates  market value.  Accordingly,
                  there is no unrealized holding gain or loss.

         i.       Fair value of financial instruments
                  -----------------------------------

                  The  carrying  amount  reported  in the  consolidated  balance
sheets for cash, accounts  receivable,  accounts payable and accrued liabilities
approximates  fair value because of the immediate or short-term  maturity of the
financial instruments.

         j.       Accounting for stock options
                  ----------------------------

                  The Company accounts for employee stock-based  compensation in
accordance with Accounting  Principles  Board Opinion No. 25 ("APB Opinion 25"),
"Accounting  for  Stock  Issued  to  Employees"   using  intrinsic  values  with
appropriate  disclosure in conformity  with the fair values based method of SFAS
123.

                                      F-10
<PAGE>

         k.       Recently issued accounting pronouncements
                  -----------------------------------------

                  In 1998, the Financial  Accounting Standards Board issued SFAS
No. 133,  "Accounting for Derivative  Instruments and Hedging Activities," which
was  subsequently  amended by SFAS No. 137 "Accounting for Derivative  Financial
Instruments and Hedging  Activities - Deferral of the Effective Date of SFAS No.
133" and SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain
Hedging Activities." SFAS No. 133 establishes accounting and reporting standards
requiring  that  every  derivative  instrument,   including  certain  derivative
instruments  embedded in other  contracts,  be recorded in the balance  sheet as
either an asset or  liability  measured at its fair value.  The  statement  also
requires that changes in the  derivative's  fair value be recognized in earnings
unless specific hedge  accounting  criteria are met. SFAS No. 133, as amended by
SFAS No. 137 and SFAS No. 138, is effective  for fiscal year 2001.  The adoption
of SFAS No.  133 is not  expected  to have a  material  impact on the  Company's
financial condition or results of operations.

         l.       Use of estimates
                  ----------------

                  The  preparation  of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and  assumptions  that affect the reported  amounts of assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.  Such  estimates  relate  primarily to  amortization  of goodwill and
intangibles,  third-party payor settlements and valuation  reserves for accounts
receivable and deferred tax assets.

         m.       Workers' compensation
                  ---------------------

                  The Company  self-insures up to specified limits certain risks
related to workers' compensation liability.  The estimated costs of existing and
expected  future  claims  under the  insurance  program are  accrued  based upon
historical  loss  development  trends and may be  subsequently  revised based on
developments relating to such claims.

2.       FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
         ------------------------------------------------

         Furniture,  equipment and leasehold improvements are stated at cost and
are summarized as follows:
<TABLE>
<CAPTION>
                                                                                          July 31,
                                                                             -----------------------------------
                                                                                  2000                  1999
                                                                             -------------         -------------
<S>                                                                          <C>                   <C>
       Furniture and equipment                                               $   1,539,000         $   1,104,000
       Leasehold improvements                                                      212,000               212,000
                                                                             -------------         -------------
                                                                                 1,751,000             1,316,000
       Less accumulated depreciation and amortization                              991,000               773,000
                                                                             -------------         -------------

                                                                             $     760,000         $     543,000
                                                                             =============         =============
</TABLE>

                                      F-11
<PAGE>

3.       EXCESS OF COST OVER FAIR VALUE:
         -------------------------------

         Changes in the  excess of cost over fair  value of net assets  acquired
during the two years ended July 31, 2000 are as follows:
<TABLE>
<CAPTION>
                                                                                          Years Ended
                                                                                           July 31,
                                                                             -----------------------------------
                                                                                  2000                  1999
                                                                             -------------         -------------
<S>                                                                          <C>                   <C>
       Balance, beginning of year                                            $   5,334,000         $   3,179,000
       Consideration for acquisition                                             1,978,000             2,429,000
       Amortization                                                               (367,000)             (274,000)
                                                                             -------------         -------------

       Balance, end of year                                                  $   6,945,000         $   5,334,000
                                                                             =============         =============
</TABLE>

4.       OTHER INTANGIBLE ASSETS:
         ------------------------
<TABLE>
<CAPTION>
       Other intangible assets are as follows:

                                                                                           July 31,
                                                                             -----------------------------------
                                                                                 2000                   1999
                                                                             -------------         -------------
<S>                                                                          <C>                   <C>
       Covenants not to compete                                              $     975,000         $     975,000
       Personnel files                                                           1,119,000               963,000
       Patient files                                                               792,000               637,000
                                                                             -------------         -------------
                                                                                 2,886,000             2,575,000
       Less accumulated amortization                                             1,629,000             1,336,000
                                                                             -------------         -------------

       Balance, end of year                                                  $   1,257,000         $   1,239,000
                                                                             =============         =============
</TABLE>

         Other  intangible  assets are being amortized  using the  straight-line
method over a period of three to ten years.

5.       ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
         --------------------------------------
<TABLE>
<CAPTION>

       Accounts payable and accrued expenses are as follows:

                                                                                           July 31,
                                                                             -----------------------------------
                                                                                  2000                  1999
                                                                             -------------         -------------
<S>                                                                          <C>                   <C>
       Trade accounts payable                                                $     276,000         $     213,000
       Accrued employee compensation and benefits                                1,826,000               826,000
       Other                                                                       101,000                40,000
                                                                             -------------         -------------

                                                                             $   2,203,000         $   1,079,000
                                                                             =============         =============
</TABLE>

                                      F-12
<PAGE>

6.       SUBSIDIARY STOCK OFFERING:
         --------------------------

         During fiscal 1996,  following an initial public offering and change in
management,  the Company held a 37.6%  investment  in SunStar  Healthcare,  Inc.
("SunStar"), which was accounted for under the equity method of accounting.

         In fiscal  1998,  the  Company's  ownership  percentage  of SunStar was
reduced to 30.5% as a result of SunStar issuing  additional shares of its common
stock pursuant to a private  placement in which it received  $1,318,000,  net of
expenses.  In connection  therewith,  the Company  recorded a gain before tax of
$302,000   representing  the  net  increase  in  book  value  of  the  Company's
investment.  Also in fiscal 1998,  the Company sold 10,000 shares of SunStar for
$37,000 and recorded a gain of $29,000.

         During the fiscal year ended July 31,  2000,  the Company  sold 259,510
shares of SunStar for  $1,602,000,  resulting in a financial  statement  gain of
$1,602,000.  The  Company's  carrying  value in SunStar  had been  reduced to $0
during fiscal 1999. The Company's tax basis in SunStar was $1,072,000, resulting
in a tax gain of $530,000.

         In February  2000,  SunStar's  sole  operating  subsidiary  effectively
discontinued operations. As of July 31, 2000, the Company's ownership percentage
of SunStar was 21.6% and Company's value of its investment in SunStar is $0.

7.       ACQUISITIONS:
         -------------

         Asset acquisitions
         ------------------

         (a) On November 1, 1999, the Company acquired certain assets of Optimum
Care Services of Connecticut Inc., Optimum Home Health of Connecticut,  Inc. and
Optimum  Home  Care  of  Connecticut,  Inc.  The  assets  were  acquired  from a
court-appointed  Chapter 7 Trustee for a purchase  price of  $4,490,000 in cash,
including  acquisition costs of $90,000. The final purchase price was determined
through an auction process  conducted at the United States  Bankruptcy Court for
the District of Massachusetts.  The assets acquired  included  certain,  but not
all, machinery, equipment, intangibles and accounts receivable and was allocated
as  follows:  $2,307,000  to accounts  receivable,  $205,000  to  furniture  and
equipment  and  $1,978,000  to  excess of cost  over  fair  value of net  assets
acquired.

         (b)  On  April  14,  2000,  the  Company  acquired  certain  assets  of
Connecticut  operations of U.S. Home Care Corp. for $311,000 in cash,  including
acquisition costs of $11,000. The assets purchased consisted of patient files of
$156,000 and employee files of $155,000.

                                      F-13
<PAGE>


7.       ACQUISITIONS: (Cont'd)
         ------------

         Business acquisitions
         ---------------------

         (a) On October 30, 1998,  the Company  acquired all of the  outstanding
common shares of Accredited Health Services, Inc. ("Accredited").  Accredited is
a licensed  home health care company that  provides home health aide services in
various  counties in New Jersey.  The purchase of $1,946,000  was generated from
internal funds.  The  acquisition was accounted for as a purchase.  The purchase
price was allocated as follows:  $1,117,000 to total current assets,  $58,000 to
furniture  and  equipment,  $40,000 to other  assets,  $550,000 to total current
liabilities, $4,000 to other liabilities and $1,285,000 to goodwill.

         (b) August 10,  1998,  the  Company  acquired  certain  assets of Bryan
Employment  Agency,  Inc., d/b/a Bryan Home Care, for approximately  $1,943,000,
including  acquisition  costs of  $8,000.  The  assets  purchased  consisted  of
personnel files of $285,000, patient files of $285,000,  furniture and equipment
of $30,000, a covenant not to compete of $200,000 and goodwill of $1,143,000.

         The above  acquisitions  have been  accounted  for  utilizing  purchase
accounting  principles.  Accordingly,  the results of these operations have been
included in the accompanying  consolidated  financial statements since the dates
of acquisition.

         The following  unaudited pro forma  consolidated  results of operations
for the year ended July 31, 1999 assumes the business  acquisitions  occurred as
of August 1, 1998:

       Revenues, net                                         $    39,849,000
       Net income                                                  1,181,000
       Net income per share:
         Basic                                                       $.23
                                                                     ====
         Diluted                                                     $.23
                                                                     ====

8.       INCOME TAXES:
         -------------

         The Company files a  consolidated  U.S.  federal income tax return that
includes all 100% owned subsidiaries.  State tax returns are filed on a combined
or separate basis depending on the applicable laws.

         The provision (benefit) for income taxes is summarized as follows:
<TABLE>
<CAPTION>

                                                                              Years Ended
                                                                               July 31,
                                                       ---------------------------------------------------------
                                                            2000                  1999                  1998
                                                       --------------        -------------         -------------
       Current:
<S>                                                    <C>                   <C>                   <C>
         Federal                                       $    1,504,000        $     718,000         $     920,000
         State and local                                      641,000              283,000               419,000
                                                       --------------        -------------         -------------
                                                            2,145,000            1,001,000             1,339,000
       Deferred                                               (87,000)                  -               (375,000)
                                                       --------------        -------------         -------------

                                                       $    2,058,000        $   1,001,000         $     964,000
                                                       ==============        =============         =============
</TABLE>

                                      F-14
<PAGE>

8.       INCOME TAXES: (Cont'd)
         ------------
         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 expense (benefit) are as follows:
<TABLE>
<CAPTION>

                                                                              Years Ended
                                                                               July 31,
                                                       ---------------------------------------------------------
                                                            2000                  1999                  1998
                                                       --------------         ------------          ------------
<S>                                                    <C>                    <C>                   <C>
       Loss from equity investee                       $           -          $         -           $   (316,000)
       State tax net operating
         loss carryforwards                                        -                    -                (59,000)
       Accrued liability and reserves                         (87,000)                  -                     -
                                                       --------------         ------------          ------------

                                                       $      (87,000)        $         -           $   (375,000)
                                                       ==============         ============          ============

         The deferred tax assets and liabilities are as follows:

                                                                               July 31,
                                                       ---------------------------------------------------------
                                                                   2000                          1999
                                                       ---------------------------    --------------------------
                                                           Assets      Liabilities        Assets      Liabilities

       Accrued liability and reserves                  $    294,000    $        -     $    353,000   $        -
       Amortization of intangible assets                    210,000             -               -             -
       Equity investment in subsidiary                           -              -          365,000            -
       State net operating loss carryforwards                46,000             -           64,000            -
                                                       ------------    -----------    ------------   -----------
                                                            550,000             -          782,000            -
       Valuation allowance                                  (46,000)            -         (365,000)           -
                                                       ------------    -----------    ------------   -----------

                                                       $    504,000    $        -     $    417,000   $        -
                                                       ============    ===========    ============   ===========

         One subsidiary of the Company has incurred  losses which can be used to
offset state  taxable  income  through  2019.  At July 31,  2000,  the total net
operating  loss  carryforward  as  applicable  to New  Jersey  is  approximately
$770,000.

         The  reconciliation of the statutory tax rate to the effective tax rate
for the three years ended July 31, 2000 is as follows:

                                                            2000                  1999                  1998
                                                       --------------         ------------          ------------

       Statutory rate                                         34%                   34%                   34%
       State and local taxes
         (net of federal tax effect)                          10                    11                    12
       Federal tax credit                                     (2)                   (4)                   (6)
       Permanent differences                                   1                     8                     8
       Change in valuation allowance                          (5)                    -                     -
       Adjustments to prior years tax liabilities             (2)                    -                     -
       Other                                                  (3)                   (2)                   (4)
                                                              --                    --                    --
       Effective rate                                         33%                   47%                   44%
                                                              ==                    ==                    ==
</TABLE>

                                      F-15
<PAGE>


9.       CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS:
         --------------------------------------------------

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

         The  Company  provides  temporary  health  care  personnel  to  in-home
patients and  facilities in the New York City  metropolitan  area,  the State of
Connecticut  and the State of New Jersey.  Credit  losses  relating to customers
historically have been minimal and within management's expectations.

         At July 31, 2000, the Company  maintains  approximately 49% of its cash
and cash equivalents with one financial institution.

         Under certain federal and state third-party reimbursement programs, the
Company received net patient revenues approximating $19,955,000, $13,281,000 and
$13,666,000 for the years ended July 31, 2000, 1999 and 1998, respectively.  The
Company  also  received  net  patient  revenues  of  approximately   $5,663,000,
$6,095,000  and  $7,488,000  for the years ended July 31,  2000,  1999 and 1998,
respectively,  from a private  company.  At July 31,  2000,  the  Company had an
aggregate  outstanding  receivable from federal and state agencies of $4,453,000
and an outstanding receivable of $1,484,000 from the private company.

10.      STOCK OPTION PLAN:
         ------------------

         In 1999,  the  stockholders  approved  the 1999 Stock  Option Plan (the
"1999  Plan")  designed  to  provide  incentives  to  key  employees  (including
directors and officers who are key employees) and to  non-employee  Directors of
the Company.  The 1999 Plan  authorizes  the granting of both  incentive and non
qualified stock options to purchase up to 500,000 shares of the Company's common
stock.

         The 1999 Plan is administered  by the Board of Directors  which, to the
extent  it  so  determines,   may  delegate  its  powers  with  respect  to  the
administration  of 1999 Plan to a committee  (the  "Committee")  of the Board of
Directors  consisting of not less than two  directors,  each of whom,  will be a
non-employee director. The Committee 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 exercise period.
The exercise price shall generally not be less than the fair market value on the
date of grant.  No options may be granted  under the 1999 Plan after  October 6,
2009.

         At July 31, 2000, 500,000 shares have been reserved for future issuance
pursuant to the 1999 Plan.

         The  Company  has a Stock  Option  Plan (the "1992  Plan")  designed to
provide  incentives to key employees  (including  directors and officers who are
key  employees)  and to  non-employee  Directors 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.


                                      F-16
<PAGE>


10.      STOCK OPTION PLAN: (Cont'd)
         -----------------

         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  options  may be
granted under the 1992 Plan after August 16, 2002.

         At July 31, 2000,  419,476  shares of the  Company's  common stock have
been reserved for future issuance pursuant to the 1992 Plan.

         A summary of the status of the  Company's  stock options as of July 31,
2000,  1999 and 1998 and  changes  during  the years  ending  on those  dates is
presented below:
<TABLE>
<CAPTION>
                                             2000                     1999                       1998
                                   -----------------------  -------------------------   ------------------------
                                                 Weighted                 Weighted            Weighted
                                                  Average                 Average              Average
                                                 Exercise                 Exercise            Exercise
                                     Shares        Price      Shares          Price        Shares        Price
                                   ----------   ----------  ------------  -----------   -----------  -----------
<S>                                <C>      <C>                  <C>        <C>             <C>         <C>
Outstanding, beginning
       of year                     259,556  $     4.19           241,758    $ 3.29          204,042     $ 2.77
Granted                            246,000        4.37           180,902      3.93           60,000       4.81
Exercised                                -          -                  -         -          (20,100)      2.47
Forfeited                          (29,102)       4.30          (163,104)     2.57           (2,184)      5.70
                                   -------                  ------------                -----------
Outstanding, end of year           476,454        4.27           259,556      4.19          241,758       3.29
                                   =======                  ============                ===========
Options exercisable
    at year-end                    476,454        4.27           259,556      4.19          241,758       3.29
                                   ==========               ============                ===========
Weighted average fair
value of options granted
during the year                             $     2.48                 $    1.97                        $ 1.97
                                            ==========                 =========                        ======
</TABLE>

         The  following  table  summarizes   information   about  stock  options
outstanding at July 31, 2000:
<TABLE>
<CAPTION>
                                                                  Options Outstanding and Exercisable
                                                     -----------------------------------------------------------
                                                                                Weighted-
                                                          Shares                 Average              Weighted-
                                                        Outstanding             Remaining              Average
                                                        at July 31,            Contractual            Exercise
                                                           2000                   Life                  Price
                                                     ----------------        -------------         -------------
      <S>                                             <C>                   <C>                  <C>
       $ 3.63 - $3.99                                     151,902               8.75 years           $    3.81
       $ 4.06 - $4.25                                     167,000               9.34 years                4.23
       $ 4.56 - $4.81                                     151,000               8.45 years                4.72
       $ 5.70                                               6,552               5.68 years                5.70
</TABLE>
         The fair  value of  options  at date of grant was  estimated  using the
Black-Scholes  option  pricing model  utilizing the following  assumptions as of
July 31, 2000, 1999 and 1998:

                                      F-17
<PAGE>

10.      STOCK OPTION PLAN: (Cont'd)
         -----------------
<TABLE>
<CAPTION>
                                                                              Years Ended
                                                                               July 31,
                                                       ---------------------------------------------------------
                                                            2000                  1999                  1998
                                                       --------------         ------------          ------------
<S>                                                          <C>                   <C>                   <C>
       Dividend yield                                        0.00%                 0.00%                 3.00%
       Volatility                                           35.00%                33.00%                 42.0%
       Risk-Free interest rate                               6.20%                 5.50%                 5.75%
       Expected life                                      10 years              10 years              10 years
</TABLE>

         The  Black-Scholes  option  valuation  model was  developed  for use in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.   Because  the   Company's   stock   options  have   characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its stock options.

         Since,  the Company applies APB Opinion 25 and related  interpretations
in accounting for its options,  no compensation cost has been recognized for its
stock option grants. The effect of applying SFAS No. 123 on pro forma net income
is not  necessarily  representative  of the effects on  reported  net income for
future years due to, among other things, (1) the vesting period of stock options
and (2) the fair value of  additional  stock  options in future  years.  Had the
Company  elected to recognize  compensation  cost based on the fair value of the
options at the date of grant as prescribed by SFAS 123, net income for the years
ended July 31, 2000, 1999 and 1998 would have been as follows:
<TABLE>
<CAPTION>
                                                                              Years Ended
                                                                               July 31,
                                                       ---------------------------------------------------------
                                                            2000                  1999                  1998
                                                       --------------         ------------          ------------
<S>                                                    <C>                    <C>                   <C>
       Proforma net income                             $3,843,000            $  924,000            $  1,085,000

       Proforma income per share:
         Basic                                            $.76                   $.18                  $.21
                                                          ====                   ====                  ====

         Diluted                                          $.76                   $.17                  $.20
                                                          ====                   ====                  ====
</TABLE>
11.      COMMITMENTS, CONTINGENCIES AND OTHER MATTERS:
         ---------------------------------------------

         (a)  Effective  January 1, 1999,  the Company  amended and restated its
Employee Savings and Stock Investment Plan organized under Section 401(k) of the
Internal  Revenue Code.  Under the amended plan,  employees may contribute up to
15% of their salary,  limited to the maximum amount  allowable under federal tax
regulations.  The Company  will match an amount equal to 100% of the first 3% of
employees'  contributions  and 50% of the next 2% of  employees'  contributions,
provided  that in no event  shall the  matching  contributions  on behalf of any
employee  exceed  4% of  employees'  compensation.  The  Company  may also  make
additional  contributions  at its discretion.  An employee may invest in Company
stock and several mutual funds. The Company's matching contributions for each of
the years  ended  July 31,  2000,  1999 and 1998  were  $226,000,  $143,000  and
$105,000, respectively.

                                      F-18
<PAGE>


11.      COMMITMENTS, CONTINGENCIES AND OTHER MATTERS: (Cont'd)
         --------------------------------------------
         (b) The Company has  employment  agreements  with four  officers  which
expire through  November 30, 2003.  The aggregate  commitment for future salary,
excluding  bonuses,  under the  agreements is  $2,502,000.  One  agreement  also
provides  for  increases  based on  increases  in the  consumer  price index and
additional annual  compensation  based on 5% of pre-tax income,  as defined,  in
excess of $3,000,000.  Two other agreements provide for additional  compensation
based on 3% of income from operations, as defined, in excess of $3,300,000.

         (c) The Company rents various office facilities  through 2004 under the
terms of several lease agreements which include escalation clauses.

         At  July  31,   2000,   minimum   annual   rental   commitments   under
noncancellable operating leases are as follows:

                     Year Ending
                       July 31,
                     -----------

                           2001                              $     638,000
                           2002                                    410,000
                           2003                                    289,000
                           2004                                    120,000
                           2005                                     78,000
                        Thereafter                                  12,000
                                                             -------------
                                                             $   1,547,000
                                                             =============

         Rent  expense  for the years  ended  July 31,  2000,  1999 and 1998 was
approximately $636,000, $594,000 and $527,000, respectively.

         One lease is with a company  controlled by the Chairman of the Board of
the Company. Rent expense under such lease approximates $135,000 per year.

         (d) The Company has a line of credit with its bank totaling $2,000,000.
Advances against the line are to be collateralized by the assets of the Company.
In  addition,  a  subsidiary  of the Company has a secured  line of credit.  The
maximum  amount that can be borrowed  under the secured line of credit shall not
exceed the lesser of eligible  accounts  receivable or  $2,000,000.  Both credit
facilities  bear interest at the alternate base  commercial  lending rate of the
bank and expire  January 31, 2001. At July 31, 2000,  there were no  outstanding
balances under either line of credit.

         (e) The Company and certain of its  officers  and  directors  have been
named as defendants in a consolidated  class action brought on behalf of certain
shareholders  of SunStar  Healthcare,  Inc.  ("SunStar").  The  lawsuit  asserts
alleged acts or omissions,  which resulted in misrepresentations or omissions of
material information concerning the financial condition of SunStar. In addition,
the lawsuit  alleges that the Company and certain  directors  exercised  control
over SunStar.  The Company  believes that the  complaints  are without merit and
intends to vigorously defend them.

                                      F-19
<PAGE>


12.      SUBSEQUENT EVENT:
         -----------------

         On August 25,  2000,  the Company  purchased  certain  assets of Health
Force  Owned Ltd.  and its  affiliates  in New Jersey  for  $1,822,000  in cash,
including acquisition costs of $42,000.



                                      F-20
<PAGE>

                    INDEPENDENT AUDITORS' REPORT ON SCHEDULE
                    ----------------------------------------

The audits  referred to in our report dated October 3, 2000 on the  consolidated
financial statements of National Home Health Care Corp. and Subsidiaries,  which
appears in Part II, also included  Schedule II for the years ended July 31, 2000
and 1999. This schedule is the responsibility of the Company's  management.  Our
responsibility is to express an opinion based on our audit. In our opinion,  the
financial  statement  schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material
respects the  information  set forth therein,  in compliance with the applicable
accounting regulations of the Securities and Exchange Commission.


/s/ Holtz Rubenstein & Co., LLP
-------------------------------
Holtz Rubenstein & Co., LLP
Melville, New York

October 3, 2000


                                      F-21
<PAGE>



                    INDEPENDENT AUDITORS' REPORT ON SCHEDULE
                    ----------------------------------------

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

The audit  referred to in our report dated  October 7, 1998 on the  consolidated
financial statements of National Home Health Care Corp. and subsidiaries,  which
appears in Part II, also includes  Schedule II for the year ended July 31, 1998.
This  schedule  is  the   responsibility  of  the  Company's   management.   Our
responsibility is to express an opinion based on our audit. In our opinion,  the
financial  statement  schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material
respects the  information  set forth therein,  in compliance with the applicable
accounting regulations of the Securities and Exchange Commission.

/s/ Richard A. Eisner & Company, LLP
------------------------------------
Richard A. Eisner & Company, LLP

New York, New York
October 7, 1998

                                      F-22
<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                ------------------------------------------------

                                   SCHEDULE II
                                   -----------

                        VALUATION AND QUALIFYING ACCOUNTS
                        ---------------------------------
<TABLE>
<CAPTION>
                      Column A                                       Column B                      Column C
---------------------------------------------------               --------------      ---------------------------------
                                                                                                   Additions
                                                                                      ---------------------------------
                                                                                            (1)                (2)
                                                                                      -------------       -------------
                                                                                                             Charged

                                                                     Balance,           Charged to          to Other
                                                                     Beginning           Costs and         Accounts -
                     Description                                     of Period           Expenses           Describe
---------------------------------------------------               --------------      -------------       -------------
<S>                                                                <C>                 <C>
Year ended July 31, 2000:
   Allowance deducted from asset account
   Allowance for uncollectible accounts                            $   392,000         $   595,000
                                                                   ===========         ===========

Year ended July 31, 1999:
   Allowance deducted from asset account
   Allowance for uncollectible accounts                            $   295,000                            $  196,500(b)
                                                                   ===========                            ==========

Year ended July 31, 1998:
   Allowance deducted from asset account
   Allowance for uncollectible accounts                            $   327,000         $    32,000
                                                                   ===========         ===========

                                                                        Column D            Column E
                                                                     --------------      -------------



                                                                                            Balance,
                                                                       Deductions            End
                     Description                                        Describe            of Period
---------------------------------------------------                  --------------      -------------
Year ended July 31, 2000:
   Allowance deducted from asset account
   Allowance for uncollectible accounts                                $  314,000(a)            $   673,000
                                                                       ==========               ===========

Year ended July 31, 1999:
   Allowance deducted from asset account
   Allowance for uncollectible accounts                                $   99,500(a)            $   392,000
                                                                       ==========               ===========

Year ended July 31, 1998:
   Allowance deducted from asset account
   Allowance for uncollectible accounts                                $  (64,000)(a)           $   295,000
                                                                       ==========               ===========




(a)      Represents actual write-offs.
(b)      Represents allowance acquired in acquisition of Accredited Health Services, Inc.
</TABLE>


                                      F-23
<PAGE>

                  (3)  Exhibits
EXHIBIT                                                      DOCUMENT
NUMBER                                                       --------
------

3.1                 Certificate of  Incorporation.  Incorporated by reference to
                    the  Registrant's  Registration  Statement  on Form S-1 (No.
                    2-86643) filed September 20, 1983 (the "1983 Form S-1").
3.2                 Certificate of Amendment to  Certificate  of  Incorporation.
                    Incorporated by reference to the Registrant's  Annual Report
                    on Form 10-K for the fiscal year ended July 31, 1992.
3.3                 By-laws. Incorporated by reference to the 1983 Form S-1.
10.1                1992 Stock  Option  Plan.  Incorporated  by reference to the
                    Registrant's  Annual Report on Form 10-K for the fiscal year
                    ended July 31, 1993 (the "1993 Form 10-K").
10.2                Incentive  Stock Option Plan.  Incorporated  by reference to
                    the 1993 Form 10-K.
10.3*               1999 Stock Option Plan.
10.4*               Third  Amendment,  dated as of August 1, 2000, to Employment
                    Agreement between the Registrant and Steven Fialkow.
10.5                Second Amendment, dated as of October 7, 1999, to Employment
                    Agreement   between  the  Registrant  and  Steven   Fialkow.
                    Incorporated  by  reference  to the  Registrant's  Quarterly
                    Report on Form 10-Q for the fiscal quarter ended October 31,
                    1999 (the "October 31, 1999 Form 10-Q").
10.6                First Amendment, dated as of December 1, 1998, to Employment
                    Agreement   between  the  Registrant  and  Steven   Fialkow.
                    Incorporated  by  reference  to the  Registrant's  Quarterly
                    Report on Form 10-Q for the fiscal quarter ended January 31,
                    1999 (the "January 31, 1999 Form 10-Q").
10.7                Employment  Agreement  dated as of November 1, 1997  between
                    the Registrant and Steven Fialkow. Incorporated by reference
                    to the  Registrant's  Quarterly  Report on Form 10-Q for the
                    fiscal quarter ended January 31, 1998 (the "January 31, 1998
                    Form 10-Q").
10.8*               Second Amendment, dated as of August 1, 2000, to Amended and
                    Restated  Employment  Agreement  between the  Registrant and
                    Frederick H. Fialkow.

                                       23
<PAGE>

EXHIBIT                                                      DOCUMENT
NUMBER                                                       --------
------

10.9                First  Amendment,  dated as of December 1, 1998,  to Amended
                    and Restated Employment Agreement between the Registrant and
                    Frederick  H.  Fialkow.  Incorporated  by  reference  to the
                    Registrant's  Annual Report on Form 10-K for the fiscal year
                    ended July 31, 1999.
10.10               Amended  and  Restated  Employment  Agreement  dated  as  of
                    December 1, 1998  between the  Registrant  and  Frederick H.
                    Fialkow.  Incorporated  by reference to the January 31, 1999
                    Form 10-Q.
10.11               Employment  Agreement  dated as of November 1, 1997  between
                    the  Registrant  and Frederick H. Fialkow.  Incorporated  by
                    reference to the January 31, 1998 Form 10-Q.
10.12*              Second Amendment,  dated as of August 1, 2000, to Employment
                    Agreement between the Registrant and Robert P. Heller.
10.13               First Amendment, dated as of December 1, 1998, to Employment
                    Agreement  between  the  Registrant  and  Robert P.  Heller.
                    Incorporated by reference to the January 31, 1999 Form 10-Q.
10.14               Employment  Agreement  dated as of November 1, 1997  between
                    the  Registrant  and  Robert  P.  Heller.   Incorporated  by
                    reference to the January 31, 1998 Form 10-Q.
10.15*              Second Amendment,  dated as of August 1, 2000, to Employment
                    Agreement between the Registrant and Richard Garofalo.
10.16               First Amendment, dated as of December 1, 1998, to Employment
                    Agreement  between  the  Registrant  and  Richard  Garofalo.
                    Incorporated by reference to the January 31, 1999 Form 10-Q.
10.17               Employment  Agreement  dated as of November 1, 1997  between
                    the  Registrant  and  Richard   Garofalo.   Incorporated  by
                    reference to the January 31, 1998 Form 10-Q.
10.18               Amended and Restated Asset Purchase  Agreement dated October
                    15, 1999 among Charles L. Glerum as Trustee for Optimum Care
                    Services  of  Connecticut,  Inc.,  Optimum  Home  Health  of
                    Connecticut,  Inc., Optimum Home Care of Connecticut,  Inc.,
                    New England  Home Care,  Inc.,  Connecticut  Staffing  Works
                    Corp. and the  Registrant.  Incorporated by reference to the
                    Registrant's  Current  Report on Form 8-K dated November 11,
                    1999.

                                       24
<PAGE>

EXHIBIT                                                      DOCUMENT
NUMBER                                                       --------
------

10.19               The Registrant's  Employee Savings and Stock Investment Plan
                    under Section 401(k) of the Internal Revenue Code, effective
                    as of January  1, 1999.  Incorporated  by  reference  to the
                    October 31, 1999 Form 10-Q.
10.20               Letter Agreement dated February 20, 2000 providing a Secured
                    Advised Line of Credit from the Bank of New York to National
                    Home  Health Care Corp.  Incorporated  by  reference  to the
                    Registrant's  Quarterly  Report on Form 10-Q for the  fiscal
                    quarter  ended  January 31, 2000 (the "January 31, 2000 Form
                    10-Q").
10.21               Letter Agreement dated February 20, 2000 providing a Secured
                    Advised  Line of  Credit  from  the  Bank of New York to New
                    England  Home Care,  Inc.  Incorporated  by reference to the
                    January 31, 2000 Form 10-Q.
21.1*               List of Subsidiaries.
23.1*               Report of Holtz Rubenstein & Co., LLP.
23.2*               Report of Richard A. Eisner & Company, LLP.
23.3*               Consent of Holtz Rubenstein & Co., LLP.
23.4*               Consent of Richard A. Eisner & Company, LLP.
27.1*               Financial Data Schedule.

----------
*     Filed herewith

         (b)  Reports on Form 8-K.
              -------------------

                  None.

                                       25
<PAGE>


                                   SIGNATURES
                                   ----------

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                            NATIONAL HOME HEALTH CARE CORP.

                                            /s/ Robert P. Heller
                                            -----------------------------------
                                            By:      Robert P. Heller
                                                     Vice President of Finance
                                                     and Chief Financial Officer

Dated:  October 27, 2000

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  this report has been signed on the above date by the following persons
on behalf of the Registrant and in the capacities indicated.
<TABLE>
<CAPTION>

<S>                                             <C>
/s/ Frederick H. Fialkow                          Chairman of the Board of Directors
------------------------
Frederick H. Fialkow


/s/ Steven Fialkow                                President, Chief Executive Officer,
----------------------------
Steven Fialkow                                    Secretary and Director


/s/ Robert P. Heller                              Vice President of Finance and Chief
----------------------------
Robert P. Heller                                  Financial Officer (principal financial and
                                                  accounting officer)


/s/ Ira Greifer                                   Director
----------------------------
Ira Greifer, M.D.


/s/ Bernard Levine                                Director
----------------------------
Bernard Levine, M.D.


/s/ Robert Pordy                                  Director
----------------------------
Robert Pordy, M.D.
</TABLE>


<PAGE>


                                                     Commission File No. 0-12927



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    EXHIBITS

                                       to

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
           OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, FOR THE
                         FISCAL YEAR ENDED JULY 31, 2000


                         NATIONAL HOME HEALTH CARE CORP.


<PAGE>



EXHIBIT                                                      DOCUMENT
NUMBER                                                       --------
------

3.1                 Certificate of  Incorporation.  Incorporated by reference to
                    the  Registrant's  Registration  Statement  on Form S-1 (No.
                    2-86643) filed September 20, 1983 (the "1983 Form S-1").
3.2                 Certificate of Amendment to  Certificate  of  Incorporation.
                    Incorporated by reference to the Registrant's  Annual Report
                    on Form 10-K for the fiscal year ended July 31, 1992.
3.3                 By-laws. Incorporated by reference to the 1983 Form S-1.
10.1                1992 Stock  Option  Plan.  Incorporated  by reference to the
                    Registrant's  Annual Report on Form 10-K for the fiscal year
                    ended July 31, 1993 (the "1993 Form 10-K").
10.2                Incentive  Stock Option Plan.  Incorporated  by reference to
                    the 1993 Form 10-K.
10.3*               1999 Stock Option Plan.
10.4*               Third  Amendment,  dated as of August 1, 2000, to Employment
                    Agreement between the Registrant and Steven Fialkow.
10.5                Second Amendment, dated as of October 7, 1999, to Employment
                    Agreement   between  the  Registrant  and  Steven   Fialkow.
                    Incorporated  by  reference  to the  Registrant's  Quarterly
                    Report on Form 10-Q for the fiscal quarter ended October 31,
                    1999 (the "October 31, 1999 Form 10-Q").
10.6                First Amendment, dated as of December 1, 1998, to Employment
                    Agreement   between  the  Registrant  and  Steven   Fialkow.
                    Incorporated  by  reference  to the  Registrant's  Quarterly
                    Report on Form 10-Q for the fiscal quarter ended January 31,
                    1999 (the "January 31, 1999 Form 10-Q").
10.7                Employment  Agreement  dated as of November 1, 1997  between
                    the Registrant and Steven Fialkow. Incorporated by reference
                    to the  Registrant's  Quarterly  Report on Form 10-Q for the
                    fiscal quarter ended January 31, 1998 (the "January 31, 1998
                    Form 10-Q").
10.8*               Second Amendment, dated as of August 1, 2000, to Amended and
                    Restated  Employment  Agreement  between the  Registrant and
                    Frederick H. Fialkow.
<PAGE>

EXHIBIT                                                      DOCUMENT
NUMBER                                                       --------
------

10.9                First  Amendment,  dated as of December 1, 1998,  to Amended
                    and Restated Employment Agreement between the Registrant and
                    Frederick  H.  Fialkow.  Incorporated  by  reference  to the
                    Registrant's  Annual Report on Form 10-K for the fiscal year
                    ended July 31, 1999.
10.10               Amended  and  Restated  Employment  Agreement  dated  as  of
                    December 1, 1998  between the  Registrant  and  Frederick H.
                    Fialkow.  Incorporated  by reference to the January 31, 1999
                    Form 10-Q.
10.11               Employment  Agreement  dated as of November 1, 1997  between
                    the  Registrant  and Frederick H. Fialkow.  Incorporated  by
                    reference to the January 31, 1998 Form 10-Q.
10.12*              Second Amendment,  dated as of August 1, 2000, to Employment
                    Agreement between the Registrant and Robert P. Heller.
10.13               First Amendment, dated as of December 1, 1998, to Employment
                    Agreement  between  the  Registrant  and  Robert P.  Heller.
                    Incorporated by reference to the January 31, 1999 Form 10-Q.
10.14               Employment  Agreement  dated as of November 1, 1997  between
                    the  Registrant  and  Robert  P.  Heller.   Incorporated  by
                    reference to the January 31, 1998 Form 10-Q.
10.15*              Second Amendment,  dated as of August 1, 2000, to Employment
                    Agreement between the Registrant and Richard Garofalo.
10.16               First Amendment, dated as of December 1, 1998, to Employment
                    Agreement  between  the  Registrant  and  Richard  Garofalo.
                    Incorporated by reference to the January 31, 1999 Form 10-Q.
10.17               Employment  Agreement  dated as of November 1, 1997  between
                    the  Registrant  and  Richard   Garofalo.   Incorporated  by
                    reference to the January 31, 1998 Form 10-Q.
10.18               Amended and Restated Asset Purchase  Agreement dated October
                    15, 1999 among Charles L. Glerum as Trustee for Optimum Care
                    Services  of  Connecticut,  Inc.,  Optimum  Home  Health  of
                    Connecticut,  Inc., Optimum Home Care of Connecticut,  Inc.,
                    New England  Home Care,  Inc.,  Connecticut  Staffing  Works
                    Corp. and the  Registrant.  Incorporated by reference to the
                    Registrant's  Current  Report on Form 8-K dated November 11,
                    1999.

<PAGE>

EXHIBIT                                                      DOCUMENT
NUMBER                                                       --------
------

10.19               The Registrant's  Employee Savings and Stock Investment Plan
                    under Section 401(k) of the Internal Revenue Code, effective
                    as of January  1, 1999.  Incorporated  by  reference  to the
                    October 31, 1999 Form 10-Q.
10.20               Letter Agreement dated February 20, 2000 providing a Secured
                    Advised Line of Credit from the Bank of New York to National
                    Home  Health Care Corp.  Incorporated  by  reference  to the
                    Registrant's  Quarterly  Report on Form 10-Q for the  fiscal
                    quarter  ended  January 31, 2000 (the "January 31, 2000 Form
                    10-Q").
10.21               Letter Agreement dated February 20, 2000 providing a Secured
                    Advised  Line of  Credit  from  the  Bank of New York to New
                    England  Home Care,  Inc.  Incorporated  by reference to the
                    January 31, 2000 Form 10-Q.
21.1*               List of Subsidiaries.
23.1*               Report of Holtz Rubenstein & Co., LLP.
23.2*               Report of Richard A. Eisner & Company, LLP.
23.3*               Consent of Holtz Rubenstein & Co., LLP.
23.4*               Consent of Richard A. Eisner & Company, LLP.
27.1*               Financial Data Schedule.

----------
*     Filed herewith