| **UNITED        STATES**                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **SECURITIES        AND EXCHANGE COMMISSION**                                                                                                                                                                                                                                                                                                                                                                                                       |
| **Washington,        DC 20549**                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **FORM        10-KSB**                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| [X] Annual Report pursuant        to Section 13 or 15(d) of the Securities Exchange Act of        1934 for the fiscal year ended December 31, 2001                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| or                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| [    ]        Transition Report pursuant to Section 13 or 15(d) of the        Securities Exchange Act of 1934 for the transition period        from ______________ to _____________.                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Commission File Number        33-11863                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **HEALTHCARE        INVESTORS OF AMERICA, INC.**(Exact name of small business issuer as        specified in its charter)                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Maryland**(State or other jurisdiction of         incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                  | **86-0576027**(IRS Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
| **2940 N.        Swan Rd., Suite 212****Tucson, Arizona**(Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                   | **85712**(Zip Code) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
| **(520)        326-2000**(Issuer’s telephone number, including        area code)                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **2940 N.        Swan Rd., Suite 212****Tucson, Arizona 85712**(Former name, former address and former        fiscal year, if changed since last report)                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Check whether the issuer (1)        filed all reports required to be filed by Section 13 or        15(d) of the Securities Exchange Act of 1934 during the        preceding 12 months (or for such shorter period that the        registrant was required to file such reports), and (2)        has been subject to such filing requirements for the past        90 days. Yes [X]     No        [    ] |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Indicate the number of        shares outstanding of each of the issuer’s classes        of common stock, as of the latest practical date.                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Common stock, $.01 Par Value        – 397,600 shares as of __________, 2002.                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

 

| **ITEM 1. BUSINESS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **General Development of        Business**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 1.     Overview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|         Healthcare        Investors of America, Inc. (the "Trust") is a        Maryland corporation formed on February 6, 1987. The        Trust changed its name from Harbor American Healthcare        Trust, Inc. effective December 18, 1996. The principal        office of the Trust is located at 2940 North Swan Road,        Suite 212, Tucson, Arizona 85712. The Trust's present        advisor is Harbor American Capital Group, a California        limited partnership ("HACG" or the        "Advisor").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         During        2001, the Trust owned the real property, fixtures and        improvements used in connection with the operation of a        long term care facility located in Florida known as        Bayshore Convalescent Center ("Bayshore" or the        "Florida Property"), a 150-bed skilled and        intermediate care nursing home facility located at 16650        West Dixie Highway in North Miami Beach, Florida, which        was acquired in March 1988 and sold on August 6, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.     Sale        of Bayshore and Related Lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|         At        January 1, 2001, the Trust hereinafter referred to as the        "Seller", and Abraham Shaulson,        ("Shaulson") sometimes hereinafter referenced        as the "Buyer", had entered into a Purchase and        Sale Agreement (the "Original Agreement"),        dated as of June 3, 1999, which was subsequently amended        six times. Under the Agreement, Seller agreed to sell all        of the real estate, personal property, inventory,        trademarks and other intangibles, and patient contracts        (collectively, the "Assets") to Buyer with        respect to Bayshore. Excepted from the Asset sale was all        cash, accounts receivables, prepaid expenses, notes        receivable and personal property of the residents at        Bayshore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Buyer        agreed to pay Seller $5,750,000 (the "Purchase        Price") for Sellers' Assets as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | $350,000 (the        "Deposit") from Buyer to Seller as a        nonrefundable deposit except in the event of a default by        Seller under the Agreement; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | The balance of        the purchase price due on the closing date scheduled on        or before October 31, 2000 (the "Closing        Date"). The Closing Date was by multiple amendments        subsequently extended to August 6, 2001. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         With        the execution of an Amendment dated August 31, 1999, the        Buyer deposited $150,000 into a separate interest bearing        account of Seller. The proceeds in this account were for        capital improvements to Bayshore, as described in the        Agreement. Buyer completed these improvements and the        funds were remitted to Buyer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Pending        the closing of the sale under the Agreement, Seller        agreed to have the Registrant lease Bayshore to a Buyer        affiliate. The terms of the Lease (the "Watercrest        Lease"), dated as of July 30, 1999, from the        Registrant to Watercrest Nursing and Rehabilitation        Center, Inc. (the "Lessee"), are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        initial term of the Watercrest Lease commenced September        1, 1999 and ended October 31, 2000, which the parties        extended to July 31, 2001. The base rent for Bayshore was        $48,314 per month payable on the 20th day of each        calendar month plus such additional amounts that would be        necessary to cover the debt service under the loan        agreement between the Registrant and any mortgagee of        Bayshore. Lessee assumed the obligation to pay all taxes        and other charges which arose out of Bayshore. Lessee was        responsible for all utilities, insurance premiums related        to the premises including a $2,000 monthly insurance        administration fee due the Registrant for monitoring the        insurance coverage of Bayshore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         In        the event of a partial condemnation or damage to or        destruction of Bayshore, which would not render Bayshore        unsuitable for its primary intended use, the rent was to        be abated to the extent that it was fair, just and        equitable to both the Registrant and Lessee. The primary        intended use of the property is as a health care facility        licensed for skilled and intermediate long-term nursing        services. Lessee covenanted in the Lease to operate        Bayshore in accordance with the primary intended use and        to maintain its qualifications for licensure and        accreditation. Under the Watercrest Lease, Lessee could        enter into a management agreement with the prior written        consent of the Registrant and any mortgagee of Bayshore,        subject to the payment of the management fees being        subordinate to all sums due under the Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Watercrest Lease required the Lessee to maintain Bayshore        in good order and repair. Lessee was responsible for the        cost of any capital additions to Bayshore which were        deemed a leasehold improvement. The Watercrest Lease        further required the Lessee to spend the $150,000        referred to above on improvements to Bayshore. As of        December 31, 2000, Lessee had spent the full $150,000        primarily on computer equipment, floor coverings, window        frame and glass replacements and exterior painting.        Lessee was not to create or allow to remain on the        premises of Bayshore any lien or encumbrance on Bayshore.        Lessee could, however, contest any taxes, insurance        requirements, liens or encumbrances so long as Lessee        provided reasonable security in the event any such lien,        taxes, insurance requirements or encumbrance exceeded        $50,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Lessee        was required to maintain all-risk insurance in an amount        equal to the replacement costs of Bayshore, boiler        insurance, business interruption insurance covering the        Registrant's risk of loss, comprehensive public liability        insurance in an amount not less than $4 million per        occurrence for injuries and $2 million for property        damage, malpractice insurance in an amount of not less        than $5 million for each person and $10 million for each        occurrence, and flood insurance as Bayshore lies in a        flood plain area. Effective November 1, 2000, the        required liability insurance has become unavailable in        the state of Florida at any cost less than that which        would be considered self-insurance. Thus, liability        coverage was not provided for the property with the risk        that any significant judgment related to the property        would not be able to be satisfied by the Lessee or the        Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Insurance        proceeds as a result of loss or damage to Bayshore were        payable to the Registrant for reconstruction or repair of        Bayshore. If Bayshore were totally or substantially        destroyed from a risk covered by insurance, Lessee,        subject to the rights of any mortgagee, would have the        option to restore Bayshore or acquire Bayshore at fair        market value or terminate the Watercrest Lease. If        Bayshore were destroyed from a risk not covered by        insurance, the Registrant could elect to restore Bayshore        or absent such an election Lessee could terminate the        Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         A        partial condemnation of Bayshore so long as Bayshore was        not rendered unsuitable for its primary intended use,        would not cause a termination of the Watercrest Lease. If        the condemnation caused Bayshore to be rendered        unsuitable for its primary intended use, then Lessee had        the right to restore Bayshore at its own expense, to        acquire Bayshore for fair market value or terminate the        Watercrest Lease. In the event Lessee or its affiliate        purchased Bayshore, any condemnation award would belong        to Lessee, otherwise the award would belong to the        Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         An        event of default would occur upon:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | the existence of        an event of default under any other lease between the        Registrant and Lessee; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | failure of        Lessee to make a rental payment under the Watercrest        Lease and such failure were to continue for a period of        10 days after receipt of written notice; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iii) | Lessee's failure        to observe or perform any other term, covenant or        condition of the Watercrest Lease and such failure was        not cured within 30 days after receipt of notice; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iv) | bankruptcy of        Lessee; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (v) | voluntary        cessation of operations by Lessee at Bayshore for a        period of longer than 30 days; or |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (vi) | failure of        Lessee to provide financial statements or copies of        required licensing information, to maintain quarterly        cash flow of not less than 125% of minimum rent or to        operate Bayshore for its primary intended use. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         If        an event a default would have occurred and be continuing,        the Registrant could terminate the Watercrest Lease. The        Registrant could not remove Lessee from Bayshore until        the Registrant provided for a substitute operator        acceptable to any Bayshore mortgagee. Notwithstanding        termination of the Watercrest Lease, Lessee was        responsible for all rent due and payable with respect to        Bayshore. In addition, if an event of default would have        occurred and be continuing the Registrant could require        Lessee to purchase Bayshore for the Purchase Price plus        all rent then due and payable. If Lessee had failed to        perform under the Watercrest Lease and was removed from        Bayshore, such action by the Registrant would not be        deemed an eviction of Lessee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Lessee        agreed to indemnify the Registrant against all        liabilities arising from the operation of Bayshore.        Lessee could not, without the prior written consent of        the Registrant and any mortgagee, assign the Lease or        sublet any part of Bayshore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Effective        August 31, 1999, the Registrant purchased from BHS all        the personal property used at Bayshore. The Lessee did        not pay any consideration for the personal property and        upon termination of the Watercrest Lease, all the        personal property would be deemed owned by the        Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Registrant agreed to indemnify the Lessee from:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | any liability        arising from any breach of representations, warranties,        covenants or agreements made in the Lease; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | any overpayment        or assessment relating to Bayshore from the Medicare or        Medicaid programs; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iii) | any claims by        any creditor incurred by Bayshore prior to the effective        date of the Watercrest Lease; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iv) | any claim        arising out of operation of Bayshore prior to the        effective date of the Watercrest Lease. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         In        the event either Medicaid or Medicare withheld, recouped        or offset any payment due the Lessee for claims arising        prior to the effective date of the Watercrest Lease, the        Registrant agreed to immediately reimburse Lessee for        such withholding, recoupment or offset. Notwithstanding        other terms of the Watercrest Lease, the Lessee could        offset any payments that the Registrant failed to make in        this situation from the monthly rent and insurance        administration fee. Any amounts due to the Lessee from        the Registrant as a result of the unreimbursed Medicaid        or Medicare payments would bear interest at 10% per annum        until paid by the Registrant to the Lessee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         One        of the principal conditions to the closing of the sale of        Bayshore was the shareholder approval of the sale by the        Registrant's shareholders. If Sellers had not obtained        shareholder approval at least six (6) months prior to the        end of the Watercrest Lease, Buyer had the option to        extend the Watercrest Lease for three one-year renewal        terms with a rent increase equal to the consumer price        index increase for the preceding twelve (12) months. Such        shareholder approval was received and on February 10,        2000, the Trust Board of Directors accepted the Inspector        of Elections count of 271,162.4806 shares voted for as an        appropriate number of votes in excess of the required        two-thirds super majority.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Under        the terms of the Agreement, Buyer was required to file        applications for the appropriate licenses to operate        Bayshore with the applicable licensing agencies by        September 30, 1999, with all licenses to be issued on or        before December 31, 1999. This was accomplished effective        September 1, 1999. Buyer further agreed to indemnify and        hold Seller harmless from all liabilities arising in        connection with the operation of Bayshore from and after        the date of the Watercrest Lease until the Closing Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Agreement contained Seller’s representations and        warranties related to, among others:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | due organization        and existence; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | authorization of        the Agreement; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iii) | good title to        the real and personal property of Bayshore; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iv) | the operating        condition of the buildings and appurtenances on the real        estate; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (v) | proper licensing        for operation of Bayshore as a 150 bed nursing home; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (vi) | payment of real        estate taxes; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (vii) | fair        presentation of the financial condition and results of        operations of Bayshore as contained in the financial        statements Seller had delivered to Buyer; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (viii) | no pending labor        problems with the existing union at Bayshore; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ix) | no material and        adverse litigation with respect to Bayshore; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (x) | proper filing of        all taxes, tax returns and cost reports; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (xi) | sufficient        insurance coverage with respect to Bayshore; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (xii) | no environmental        claims. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Agreement contained Buyer's warranties and        representations related to due organization and        existence, and proper authorization of the Agreement,        among others.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Conditions        to the Buyer's obligation to consummate the Agreement        included:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | no adverse        change in Bayshore and the Seller’s Assets; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | Seller’s        compliance with the terms of the Agreement; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iii) | Buyer's receipt        of a commitment to finance the Assets on terms reasonably        acceptable to Buyer; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iv) | no material and        adverse litigation affecting Bayshore or the Sellers'        Assets; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (v) | the patient        census were not to be less than 113 with Medicaid        certified beds to be 115 and Medicare certified beds to        be 16; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (vi) | Buyer's receipt        of evidence that all cost reports of Seller required to        be filed prior to the Closing Date were timely filed. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Conditions        to the Seller’s obligation to close the sale of        Bayshore included Buyer's continuing compliance with the        Agreement, no litigation pending against Buyer        questioning the legality of the transactions under the        Agreement, and Seller’s receipt of shareholder        approval of the sale of Seller’s Assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Closing        adjustments to the Purchase Price were to include        proration of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | real estate        taxes; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | water, sewage        and electricity charges; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iii) | fees for        customer annual or periodic licenses and permits; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iv) | employee wages        and related payroll taxes and expenses; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (v) | charges on        service and maintenance agreements. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Seller        was also to be responsible for the payment of real estate        brokerage commissions. Buyer and Seller were to pay        equally all closing costs including documentary stamp        taxes, county surtax, recording fees and title insurance        premiums.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Seller        indemnified Buyer for, among others items:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | liabilities and        obligations of Seller arising prior to the Closing Date        unless otherwise expressly assumed by Buyer; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | damages or        deficiencies resulting from any misrepresentation, breach        of warranty or nonfulfillment of any obligation on the        part of Seller; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iii) | any retroactive        payments due to the State of Florida or the United States        for periods prior to the closing unless specifically        assumed by Buyer; and |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (iv) | liabilities        arising out of the transfer of funds or property by any        patient to the Seller prior to the Closing Date. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Buyer        indemnified Seller for, among other items:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i) | liabilities of        Seller arising after the Closing Date and expressly        assumed by Buyer or relating to the operation of Bayshore        by Buyer; or |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii) | any damage or        deficiency resulting from any misrepresentation, breach        of warranty or nonfulfillment of any obligation on the        part of Buyer under the Agreement. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Effective        August 6, 2001, the sale of Bayshore was completed.        Modifications to the original contract included the        following: (1) The sale price was reduced from $5,750,000        to $5,600,000 and the Purchaser agreed to pay the real        estate commission of $150,000 direct and outside of        escrow; (2) Purchaser accepted title subject to the two        mortgages due PNC Bank in the amount of $3,989,666 and        agreed to make payments as they came due on the 20th of        each month beginning August 20, 2001. Further, the        Purchaser agreed to pay the PNC loans in full on or        before July 31, 2002. (3) Purchaser agreed to assume and        pay the Trust debt due the State of Florida, Agency for        Health Care Administration in the amount of $249,599. (4)        Purchaser acknowledged that a transfer of title and        placing of new Trust subordinate debt against the        property would constitute a default under the terms of        the PNC mortgage documents. The Purchaser agreed to        accept title with these conditions of default and hold        Seller harmless from any damages that may result from        acceleration of the debt and foreclosure on the property        by PNC Bank. By letter dated September 5, 2001, PNC Bank        notified the Trust and Prime Investments, LLC, the        purchaser, ("Prime") of which Shaulson is a        member, (i) that there was a default under the terms of        the Forbearance Agreement by reason of the sale without        securing the prior written consent of PNC Bank; (ii) that        the cash proceeds of the sale were diverted and not        applied to amortize the mortgage indebtedness of PNC,        irrespective of PNC’s rights as lender; (iii) that        PNC will consider all appropriate means of recovering        from the Trust, or recouping from its shareholders, any        misapplied funds or improper distributions; (iv) that PNC        reserved its rights to initiate legal action and take        other steps, including investigating the possibility of a        criminal action, if determined by counsel to be        appropriate. Prime has made, on a timely basis, the PNC        mortgage payments due on August 20, 2001 and through        March 20, 2002. Following receipt of the September 5,        2001 letter from PNC, Trust management and Prime each        contacted PNC and requested that no default action be        taken by PNC in consideration of (x) the strong cash        equity expended by Prime (approximately $1,000,000); (y)        the assurance by Prime that it would pay PNC in full on        or before July 31, 2002; and (z) Trust management’s        offer to monitor Bayshore operations and financial        statements and report regularly on same to PNC. (5)        Purchaser agreed to offer as additional collateral to the        Trust third mortgage property it intends to purchase        adjacent to the subject property, subject to a maximum of        $150,000 first lien debt. To date, Purchaser has not        purchased such additional property. (6) Purchaser also        agreed to provide periodic financial and operating        reports to the Trust for its use, including forwarding        such reports, together with appropriate comments, to PNC        Bank. The financial terms of the sale in rounded amounts        follows: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Total Selling        Price | $5,600,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Less: |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | PNC Mortgages        (first and second combined) | 3,990,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Earnest Deposit | 325,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Assumption of        Medicaid Debt | 250,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Third Mortgage        Due to Trust | 510,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Closing Costs |      78,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Net Cash        Proceeds at Closing | $  447,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        actual amount of the Note secured by the Third Mortgage        due the Trust was $510,334.08 at the sale closing. It is        payable $15,000 monthly beginning August 31, 2001,        including 10% per annum interest and is due and payable        in full on July 31, 2002. The payments due from August        31, 2001 and through February 28, 2002 were timely made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Harbor        American Capital Group, the advisor to the Trust, was        entitled to a 3% sale fee, or $168,000, under the terms        of its Advisory Agreement. It accepted a flat fee of        $150,000, payable $70,000 at close of the sale and        $80,000 when the Third Mortgage Note is paid in full on        or before July 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         After        considering obligations of the Trust to PNC Bank under        the terms of its First and Second Mortgages, Directors of        the Trust determined the PNC Bank position would not be        endangered by payment of the sales proceeds to        Shareholders in the form of a dividend. After adding        other cash on hand, the Directors declared a dividend of        $1.25 per share to be paid on August 21, 2001 to        shareholders of record on August 14, 2001. The Trust paid        this dividend on August 20, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         On        February 4, 2002, PNC Bank sent Notice of Acceleration        ("the Acceleration Notice") to the Registrant        and to Prime. PNC declared all amounts owed to be fully        accelerated, and immediately due and payable. As of        January 23, 2002, the outstanding balances due on the PNC        Bank Notes totaled $3,883,960. Demand was made for        payment in full by February 11, 2002. Prime has continued        to make regular monthly payments due on the 20th of each        month and PNC has continued to accept such payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         On        March 11, 2002, PNC Bank filed a foreclosure action for        Bayshore in PNC Bank v. Healthcare Investors of        America, Inc.**,** et al, in the        11th Circuit for Miami-Dade County Florida, Case No.        0206571 CA 04 (the "Foreclosure Suit"). In the        Complaint, PNC Bank alleges: (i) a breach by the Trust of        the terms of the First and Second Mortgages by (a)        transferring Bayshore to Prime without the consent of PNC        Bank, and (b) further encumbering Bayshore with the Third        Mortgage in favor of the Trust; (ii) a breach by the        Trust of the terms of the PNC Bank Notes by failing to        pay in full the accelerated amounts due; (iii) tortious        interference by Prime, Shaulson, the Advisor, Heritage        Advisory Corporation ("Heritage") and James        Sellers ("Sellers") with the relationship of        PNC Bank and the Trust through the sale of Bayshore to        Prime without PNC Bank consent and over its objections;        (iv) a violation of Florida law by the transfer of        Bayshore to Prime although Bayshore served as secured        collateral in favor of PNC Bank; (v) civil conspiracy of        the Trust, Shaulson, Prime, the Advisor, Heritage,        Sellers and Dale Markham ("Markham"), the        Chairman and President of the Trust, in the sale of        Bayshore to Prime without the consent of PNC Bank and        over its objections and the further encumbrance of        Bayshore with the Third Mortgage; and (vi) fraudulent        inducement by the Trust and Markham in causing PNC Bank        to enter into the June 2001 extension of the Forbearance        Agreement one month prior to the sale of Bayshore to        Prime. PNC Bank is seeking foreclosure of Bayshore,        payment of the PNC Bank Notes, compensatory damages in an        unstated sum and the appointment of a receiver of        Bayshore under the terms of the First and Second        Mortgages. To date, the Trust has not answered the        Complaint but intends to defend this action. Trust        management at this early stage of the Foreclosure Suit        cannot make a determination as to the outcome of the        Foreclosure Suit, however, if the outcome is adverse to        the Trust, the Trust will at a minimum suffer the loss of        Bayshore, and most likely the benefit of the Third        Mortgage in favor of the Trust. Trust Management cannot        ascertain the loss or range of loss to the Trust upon the        sale of Bayshore as a result of foreclosure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.            Prior Sales of Country View and        New Life                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         Trust        management worked during 1995-1998 to develop alternative        uses for two of its then owned properties, Country View        Care Center ("Country View") and New Life Care        Center ("New Life", collectively the        "Colorado Properties"). Country View was an        87-bed nursing home located in Longmont, Colorado, and        New Life was a 56-bed nursing home located in Greeley,        Colorado. Effective July 24, 1998, the Trust sold Country        View to William E. Harper ("Harper"), an        individual not affiliated with the Trust or its Advisor,        for $262,500 in accordance with the terms of Commercial        Contracts to Buy and Sell Real Estate (the "Country        View Sales Contract"), dated June 17, 1998, as        amended. At closing on July 24, 1998, the Trust received        $80,000 in cash and was the payee of two promissory notes        (the "Harper Notes"), each dated July 24, 1998,        from Harper in the respective original principal amounts        of $100,000 and $82,500. The Harper Notes were paid in        full on July 16, 1999. The Harper Notes were secured by a        Deed of Trust (the "Harper Mortgage"), dated        July 24, 1998, from Harper for the benefit of the Trust,        on the Country View property. Pursuant to the Collateral        Assignment of Promissory Notes and Deeds of Trust (the        "1998 Collateral Assignment"), dated as of July        24, 1998, the Trust assigned the Harper Notes and the        Harper Mortgage to PNC Bank, National Association,        Louisville, Kentucky (the "Bank") as security        for the debt of the Trust owing to the Bank. Upon receipt        of the $182,500 payoff, the Trust used the full amount of        this payoff to reduce the principal balance due the Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         After        a number of attempts to privately negotiate a sale of New        Life, the Trust determined that a sale by advertised        auction was the best available method to relieve the        Trust of the financial burden of this property. Effective        August 6, 1998, the Trust sold New Life at auction to        Continuum Health Partnership, Inc.        ("Continuum"), a Colorado corporation not        affiliated with the Trust or its Advisor, for $250,000 in        accordance with the terms of that certain Commercial        Contract to Buy and Sell Real Estate (the "New Life        Sales Contract"), dated August 6, 1998. The Trust        received the sum of $250,000 in cash at closing on August        24, 1998. Neither the proceeds from the sales of Country        View and New Life nor the Note payments on the Harper        Notes satisfied the outstanding debt related to these        facilities but PNC approved the sales and the proceeds        were used to reduce the PNC loan balances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.            Advisory Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Trust currently has a contract for advisory services with        HACG. The general partner of HACG is Heritage Advisory        Corporation ("Heritage"). The stock of Heritage        is owned by James R. Sellers, an affiliate of BHS, the        former lessee of Bayshore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 5.            PNC Debt and Forbearance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|         Debt:   On        February 4, 2002, PNC Bank sent Notice of Acceleration to        the Registrant and to Prime. PNC declared all amounts        owed to be fully accelerated, and immediately due and        payable. As of January 23, 2002, the outstanding balances        due on the PNC Bank Notes totaled $3,883,960. Demand was        made for payment in full by February 11, 2002. Prime has        continued to make regular monthly payments due on the        20th of each month and PNC has continued to accept such        payments. See Item 1, Business; General Development of        Business; and Sale of Bayshore and Related Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Forbearance:   The        Trust’s mortgage notes payable matured on June 20,        1997 and PNC Bank demanded payment in full by letter        dated August 15, 1997. In that connection, the Trust and        PNC Bank entered into a Forbearance Agreement (the        "Forbearance Agreement") dated as of April 30,        1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Under        the Forbearance Agreement, PNC Bank originally agreed to        forbear from exercising its remedies until July 31, 1998.        In consideration therefor, the Trust agreed to increase        the outstanding principal amount of a Promissory Note        (Renewal and Increase), dated as of September 20, 1992,        in favor of PNC Bank from $1,000,000 to $1,681,170.45, a        portion of the security of which is a second mortgage on        Bayshore. The Trust agreed to waive any defenses, offsets        or claims it may have as of the date of the Forbearance        Agreement against PNC Bank related to the outstanding        debt of the Trust to PNC Bank. The Forbearance Agreement        further required the Trust to market the Country View        Care Center, Longmont, Colorado and the New Life Care        Center, Greeley, Colorado, (collectively, the        "Colorado Properties") and auction them by June        30, 1998, if by May 31, 1998, the Trust had not sold or        had a binding contract on the Colorado Properties on        terms reasonably acceptable to the Trust and PNC Bank.        The Trust completed the sale of the last of the Colorado        Properties on August 24, 1998. The Forbearance Agreement        also contained representations of the Trust that, among        other items, it is solvent and has no present intention        of filing or acquiescing in any bankruptcy or insolvency        proceeding. To the extent that the Trust would so file or        acquiesce, the Trust agreed not to contest any motion of        PNC Bank seeking relief from an automatic stay. Upon (i)        a breach or violation of any term, covenant or condition        of the Forbearance Agreement or related documents, (ii) a        material breach or default under any of the other loan        documents in connection with the Trust indebtedness to        PNC Bank, or (iii) any representation or warranty or        other statement contained in the Forbearance Agreement or        related documents, or any loan documents in connection        with Trust indebtedness to PNC Bank being false or        misleading in any material respect or omitting a material        fact necessary to make such representation, warranty or        statement not misleading, then PNC Bank could terminate        its forbearance. PNC Bank extended the Forbearance        Agreement initially until January 31, 1999 and        subsequently to November 31, 2000. PNC Bank last extended        the Forbearance Agreement on June 20, 2001 to June 20,        2003, which PNC Bank, as a part of the Foreclosure Suit,        seeks to set aside.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Trust's continuing plan of operation for the 2002 fiscal        year (ending December 31, 2002) is as follows: The Trust        intends to collect the balance due from Prime on the Note        in the original amount of $510,334. Assuming the PNC        loans have then been repaid by Prime, and PNC Bank has        dismissed the Foreclosure Suit, the Trust intends to        distribute available funds to shareholders after payment        of Trust expenses and liquidate. If it is determined to        be in the best interest of shareholders, and if an        opportunity to re-capitalize presents itself, to the        extent it has funds available for investment (it        currently has no such funds available and no plans for        raising such funds), it will invest primarily in        healthcare related properties, including long term care        facilities, assisted living facilities, medical office        buildings, retirement housing facilities, psychiatric        hospitals and substance abuse recovery centers through        acquisitions, joint ventures and mortgage loans. The        Trust may also invest in commercial, industrial and        residential income producing real properties through        similar means. Since the Trust has no available funds for        such investments, its ability to undertake such        investments will be dependent upon the availability of        capital to the Trust, which is very remote. See Item 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF        OPERATION.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         **Financial        Information About Industry Segments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         When        financial resources are available, the Trust's primary        business and industry segment is to invest in healthcare        related real properties, including long-term care        facilities, assisted living facilities, medical office        buildings, retirement housing facilities, psychiatric        hospitals, and substance abuse recovery centers through        acquisitions, joint ventures and mortgage loans. The        Trust also may invest in commercial, industrial, and        residential income-producing properties through similar        means. If the Trust does not re-capitalize, the Trust        will proceed with liquidation and disbursement of        available funds to shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         **Narrative        Description of Business**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Directors of the Trust manage and control the affairs of        the Trust and have general responsibility and ultimate        authority affecting the investments of the Trust. The        Directors have engaged the Advisor as an investment        advisor to select investments and supervise the        day-to-day operations of the Trust. HACG, as the Advisor,        is engaged primarily in real estate consulting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        investment objectives of the Trust are (1) to provide        quarterly or more frequent cash distributions to        stockholders from operations, (2) to provide long-term        capital appreciation to stockholders, and (3) to preserve        and protect the stockholders original invested capital.        When and if financial resources are available, the Trust        intends to invest primarily in healthcare related        property, including long-term care facilities, assisted        living facilities, medical office buildings, retirement        housing facilities, psychiatric hospitals and substance        abuse recovery centers through acquisitions, joint        ventures, and mortgage loans. The Trust also may invest        in commercial, industrial and residential income        producing real properties through similar means. To the        extent funds are not fully invested in real properties or        mortgage loans, the Trust may invest temporarily in        investments such as: (i) short-term government        securities, (ii) securities of government agencies, (iii)        bankers’ acceptances and repurchase agreements, (iv)        certificates of deposit, (v) deposits in commercial        banks, (vi) participation in pools of mortgages or bonds        and notes, and/or (vii) obligations of municipal, state,        and federal governments and government agencies. If no        determination is made to re-capitalize the Trust, it will        liquidate and disburse any remaining funds, after payment        of Trust expenses, including the PNC Bank indebtedness,        to shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        current and anticipated business of the Trust is not        seasonal. The results of operations of the Trust will        depend upon the availability of (i) capital to the Trust,        which is currently limited, (ii) suitable opportunities        for investment and reinvestment of its funds, and (iii)        the yields available from time to time on real estate and        other investments. If capital were to become available to        the Trust which is unlikely, the Trust will be competing        for acceptable investments with other financial        institutions, syndicators, other REITS, investment        bankers, including banks, insurance companies, savings        and loan associations, mortgage bankers, pension funds        and other real estate investment programs (including        other real estate investment programs which may be        sponsored by the sponsor or the Advisor of the Trust in        the future) that may have similar objectives to those of        the Trust. Substantially all competitors have greater        resources than the Trust, its directors, Advisor and its        affiliates. Further, certain of the directors of the        Trust and officers and directors of the general partner        of the Advisor and its affiliates are engaged for their        own account, or on behalf of other entities, in the type        of activities in which the Trust intends to be engaged.        Thus, the Trust could be in competition for investments        with one or more corporations, partnerships or trusts        with which such directors or officers may be affiliated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         The        Trust, as of December 31, 2001, did not directly employ        any persons. The business of the Trust is managed by the        Advisor, with which the Trust has entered into an        Advisory Agreement. See Item 9. DIRECTORS, EXECUTIVE        OFFICERS, PROMOTERS AND CONTROL PERSONS – Compliance        With Section 16(a) of the Exchange Act and Item 12.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **ITEM 2. DESCRIPTION OF        PROPERTY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         *Bayshore-*Bayshore consists of a one story structure built in        1963 and a two story addition built in 1968. The        structure totals 35,294 square feet and contains 150        beds. The Property is located on an approximately 49,704        square foot parcel of real estate at 16650 West Dixie        Highway in North Miami Beach, Florida.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         *The        Bayshore Note.* Upon closing of the sale of Bayshore        to Prime, the Trust accepted a Note ("the Third        Mortgage Note") in the amount of $510,334 payable in        monthly payments of $15,000 including principal and        interest at the rate of 10% per annum. The Third Mortgage        Note is secured by a third mortgage and matures on July        31, 2002. As of March 25, 2002, the balance due from        Prime on said Third Mortgage Note is $433,102. Prime is        currently negotiating to refinance Bayshore to pay both        PNC Bank and the Trust in full.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         ***The        Bayshore Loan.***The First Mortgage secures a loan        to the Bank that has a balance of $2,684,972 as of        February 26, 2002. All interest payments have been kept        current during 2001 and through March 23, 2002. The loan,        as extended, becomes due on June 20, 2003. The loan is        secured by a first mortgage and assignment of leases and        rents thereunder. In addition, the Bayshore Loan is        secured by a $1, 148,913 Second Mortgage, which resulted        from the sales proceeds of the Colorado Properties being        insufficient to pay off the loan on the Colorado        Properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         Although,        the Trust's PNC Bank Notes mature on June 20, 2003, they        are currently due and payable as a result of receipt of        the Acceleration Notice dated February 4, 2002. PNC Bank        has filed the Foreclosure Suit as a result of the Prime        sale being closed without securing PNC Bank’s        approval of such sale. See Item 1, Business, General        Development of Business, Sale of Bayshore and Related        Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **ITEM 3. LEGAL PROCEEDINGS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         On        March 11, 1998, John W. Madagan, Sr., d/b/a Sundance        Realty Advisors filed an action in the Commonwealth of        Massachusetts District Court Department, Pittsfield        Division entitled John W. Madagan, Sr., d/b/a Sundance        Realty Advisors, v. Lenox Healthcare, Inc. and Healthcare        Investors of America, Inc. in Civil Action No.        9827-CV-0199. This suit alleges that Lenox Healthcare,        Inc.. ("Lenox Healthcare") and the Trust owe        compensation in the amount of $50,000 to Sundance Realty        Advisors ("Sundance") as a result of John W.        Madagan, Sr. ("Madagan") having introduced        Lenox Healthcare and the Trust to one another. This        allegation is pursuant to a letter attached to the        Complaint dated November 8, 1996. Additional        correspondence in 1997 is alleged to have been sent by        Lenox Healthcare indicating the Trust's commitment to the        compensation to Madagan for services performed, at which        time an alleged good faith partial payment to Sundance in        the amount of $4,970 was paid. The Complaint alleges        joint and several liability for both the Defendants for        the unpaid amounts, interest thereon plus attorneys fees,        disbursements, expenses and litigation and collection        costs. The Trust has responded to this Complaint. During        1999, Lenox filed for protection under bankruptcy laws.        During 2000 the Trust secured a stay pending Lenox’s        emergence from bankruptcy proceedings. During 2001, the        plaintiff has taken no additional action. Although the        Trust intends to vigorously defend the allegations, at        this time the Trust is not in a position to comment upon        the possible outcome of this litigation or as to the loss        or range of loss, if any, in connection therewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|         On        March 11, 2002, PNC Bank filed the Foreclosure Suit in        connection with Bayshore. See Item 1, Business; General        Development of Business; Sale of Bayshore and Related        Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **ITEM 4. SUBMISSION OF        MATTERS TO A VOTE OF SECURITY HOLDERS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

 

| **PART II**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **ITEM 5. MARKET FOR TRUST'S COMMON        EQUITY AND RELATED                           STOCKHOLDER        MATTERS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Market Information; Disclosure        Relating to Low Price Stock**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         The        Trust Common Stock is traded in the over-the-counter        market on an electronic bulletin board established for        securities that do not meet the Nasdaq SmallCap Market        listing requirements or what is commonly referred to as        the "pink sheets" under the symbol        "HCIV". As a result, holders of Common Stock        should expect to find it more difficult to dispose of, or        to obtain accurate quotations on the price of the Common        Stock. Additionally, sales practice requirements are        imposed on broker-dealers who trade in the Common Stock        other than established customers and accredited        investors. For transactions covered by this rule, the        broker-dealer must make a special suitability        determination for the purchaser and must receive the        purchaser's written consent to the transaction prior to        sale. Such burdens on trading in the Common Stock should        be expected to discourage active trading which would        reduce the liquidity of the Common Stock and increase the        spread between the bid and ask prices quoted by these        broker-dealers, if any, which quote the Common Stock. S.        W. Ryan & Company serves as market maker for its        shares. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         Based        on representations made to the Advisor by the transfer        agent of the shares of the Trust, no sales occurred        during 2000. The transfer agent for the Common Stock of        the Trust is Gemisys, Inc., Evergreen, Colorado.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         On        July 9, 2001, Sutter Opportunity Fund 2, LLC        ("Sutter") tendered an offer to acquire up to        119,280 shares of the Trust common stock for $1.10 per        share. The offer expired on August 10, 2001. The        purchaser had not previously owned shares of Trust stock.        On July 19, 2001, the Trust sent a letter to shareholders        advising the status of the sale of Bayshore, the sale        closing of which was then uncertain, and expressing no        opinion and remaining neutral with regard to a        recommendation to shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         On        August 6, 2001, the Trust sent another letter to        shareholders advising them of the sale closing of        Bayshore and further advised them of the declaration of a        dividend of $1.25 per share payable on August 21, 2001 to        shareholders of record on August 14, 2001. Thirty-five        shareholders tendered a total of 31,498 shares which        Sutter accepted and purchased.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Holders**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         As        of March 23, 2001, there were 397,600 shares of Common        Stock outstanding, which were owned by approximately 365        holders of record.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Dividends**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         The        Trust declared a dividend on the Common Stock in the        amount of $1.25 per share on August 21, 2001 to        shareholders of record on August 14, 2001. Under the Code        a REIT must meet certain qualifications, including a        requirement that it distribute annually to its        stockholders at least 95% of its taxable income as that        term is defined in Part II, Subchapter M of Chapter I of        the Code and regulations and rulings promulgated        thereunder. The Trust intends to distribute quarterly or        more frequently to its stockholders on a pro-rata basis        substantially all cash available for distribution. The        Trust anticipates that such cash distributions will        aggregate annually at least 95% of its REIT taxable        income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **ITEM 6. MANAGEMENT’S DISCUSSION        AND ANALYSIS OR PLAN OF OPERATION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **General**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         The        following discussion and analysis should be read in        conjunction with the Financial Statements and Notes        thereto appearing elsewhere herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Results of Operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Fiscal********Year        Ended December 31, 2001 Compared to Year Ended December        31, 2000.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         For        the year ended December 31, 2001, the Trust had Net        Income of $1,163,503, or $2.92 per share, as compared to        a net loss of $125,394, or ($0.32) per share for 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         **Revenues.**The Company primarily derives its revenues from the        leasing of facilities to healthcare providers. Revenues        for the year ended December 31, 2001 were $1,758,337, an        increase over revenues of $587,146 for the year ended        December 31, 2000. The increase in revenues was due to        the gain on sale of the one remaining property and the        interest income resulting from the Note secured by a        Third Mortgage that arose from said sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         **Depreciation        and Amortization.**Depreciation and amortization        expense for the year ended December 31, 2001 was $80,750,        as compared with $129,543 for the year ended December 31,        2000. The same property was the only asset in both years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         **Interest        Expense.**For the year ended December 31, 2001,        interest expense totaled $344,821, a decrease of 12% from        $391,556 for the year ended December 31, 2000. This        decrease is the result of an average lower principal        balance on the PNC Bank loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         **Advisor        and Directors Fees.**Advisor and directors fees        consist of costs associated with the advisor and        directors of the Trust. Advisor and directors fees for        the year ended December 31, 2001 were $63,988, similar to        the $63,295 paid for the year ended December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         **Other        Expenses.**Other expenses for the year ended December        31, 2001 were $26,916, a 30% decrease from $38,444 for        the year ended December 31, 2000. This decrease is        primarily the result of reducing administrative costs in        2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         **Other        Matters.**The Trust adopted the provisions of        Statement on Financial Accounting Standards Number 121        ("SFAS 121"), "Accounting for the        Impairment of Long-Lived Assets and Long-Lived Assets to        be Disposed of". The adoption of SFAS 121 did not        have a material effect on the Trust's financial        statements because the Trust had previously recorded        writedowns of property carrying amounts to net realizable        value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Liquidity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         Cash        increased from $20,803 at December 31, 2000 to $99,375 at        December 31, 2001. Notes receivable are listed at        $4,339,780 December 31, 2001. This notes receivable        reflects the sale of the remaining asset and is listed as        such since the assumption of the underlying debt was not        approved by the mortgage holder. Building and        improvements are reduced to zero at December 31, 2001 due        to the sale of Bayshore, the remaining asset. Mortgage        Notes payable decreased from $4,098,780 at December 31,        2000 to $3,883,960 at December 31, 2001. This decrease        was primarily the result of payments of principal on        mortgaged property. Distributions in excess of net        earnings decreased from ($4,502,946) at December 31, 2000        to ($3,836,443) at December 31, 2001. This decrease is        the result of the sale of the remaining asset at a price        higher than book value.                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         The        Trust has relied solely on rental income to pay its        expenses in 2001 and 2000. Cash flows provided by        operations were $40,174 in 2001 and $51,792 in 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         The        above discussion and the Trust's financial statements        have been presented on the basis that it is a going        concern, which contemplates the realization of assets and        the satisfaction of liabilities in the normal course of        business. The Trust had only one remaining property under        lease in 2000, thus limiting cash flows available to pay        operating expenses. Mortgage notes payable on the Trust's        property matured on June 20, 2001 and PNC Bank again        extended the Forbearance Agreement dated April 30, 1998        to June 20,2003, Demand for payment in full was made by        the Bank on February 11, 2002 and on March 11, 2002, PNC        Bank filed a foreclosure action. See Item 1. DESCRIPTION        OF BUSINESS - General Development of Business. The        current maturity of the Trust's notes payable and        accumulated recurring operating losses raise a        substantial doubt about the Trust's ability to continue        as a going concern for a reasonable period of time.                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         Management's        plans include defending against the Foreclosure Suit and        minimizing operating costs. See Item 1. DESCRIPTION OF        BUSINESS - General Development of Business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         There        can be no assurance that the Trust will be successful in        its defense against the Foreclosure Suit. If the Trust is        not successful, Trust management cannot ascertain the        loss or range of loss that might result. See Item 1,        Business; General Development of Business; Sale of        Bayshore and Related Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         Much        national attention is currently focused on healthcare        reform. Although there is concern as to the status of        reimbursement programs on which the Trust indirectly        relies for its rental income, management believes the        long term care industry will benefit from any significant        healthcare reform.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **ITEM 7. FINANCIAL STATEMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         The        financial statements are listed herein beginning on page        F-1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **ITEM 8. CHANGES IN AND DISAGREEMENTS        WITH ACCOUNTANTS ON**                  **ACCOUNTING        AND FINANCIAL DISCLOSURE**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

**** 

| **PART III**                                                                                                                                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                               |
| **ITEM 9. DIRECTORS, EXECUTIVE        OFFICERS, PROMOTERS AND CONTROL                         PERSONS;        COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT** |
|                                                                                                                                                                                                                                               |
| **Directors**                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                               |
|         Information        with respect to the Company's directors is set forth        below.                                                                                                              |
|                                                                                                                                                                                                                                               |

| Name                     | Age    | Position        Presently Held                                                                                  | Director        From |
|--------------------------|--------|-----------------------------------------------------------------------------------------------------------------|----------------------|
|                     |   |                                                                                                            |                 |
| F. Dale Markham          | 72     | Director, Chairman of the        Board. President, Chief Financial Officer from March 3,        1999 to present | 1987 to Present      |
|                     |   |                                                                                                            |                 |
| Grady P. Hunter          | 68     | Director                                                                                                        | 1987 to Present      |
|                     |   |                                                                                                            |                 |
| Charles E. Trefzger, Jr. | 43     | Director                                                                                                        | 1996 to Present      |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **General**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         The        Directors of the Trust are responsible for the management        and control of the affairs of the Trust but have retained        the Advisor to, among other things, locate, investigate,        evaluate, and recommend real property and mortgage loan        investment opportunities for the Trust. The Advisor also        serves as a consultant in connection with the investment        policy decisions made by the Directors and supervises,        subject to direction of the Directors, the day-to-day        operations of the Trust. The By-laws of the Trust provide        that a majority of the Trust's Directors must be        unaffiliated with the Advisor and its affiliates        ("Unaffiliated Directors"). The remaining        Directors may be affiliates of the Trust        ("Affiliated Directors"). Further, the By-laws        provide that the Trust should have five directors;        however, at this time, no qualified or willing persons to        become directors have been located. Presently, the Trust        has three directors, all of whom may be considered        Unaffiliated Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **Officers and Directors of        the Trust**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         The        Directors and principal officers of the Trust and their        principal occupations and other affiliations during the        past five years or more, unless otherwise stated, are as        follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         Grady        P. Hunter, has served as a Director of the Trust since        its formation in 1987. Mr. Hunter was the Executive Vice        President and Chief Operating Officer of RSI, Inc. and        similarly of RSI Properties, Inc. both headquartered in        Cranberry Township, PA, from October, 1995 through June,        1999. He is now retired. RSI, Inc. and RSI Properties,        Inc. were engaged in a national effort to develop and        operate programs and facilities serving frail,        chronically impaired elderly in an assisted living        setting. Mr. Hunter was Senior Vice President and Chief        Operating Officer of Lutheran Affiliated Services, Inc.        in Mars, Pennsylvania ("LAS") from April 1991        to 1995. LAS is an owner and operator of skilled nursing        facilities, specialized care programs and residential        care communities for the elderly in Western Pennsylvania.        From January, 1988 until April, 1991, Mr. Hunter served        as Executive Vice President and Chief Operating Officer        of Retirement Systems, Inc., a firm engaged in developing        facilities and programs and consulting with developers        and operators of long term care and assisted living        facilities for the frail elderly. Mr. Hunter served as        Executive Vice President and division Chief Executive        Officer for Stanley Smith Security, Inc.        ("Smith") from 1973 to 1987. Smith is one of        the top ten international contract and consulting        services companies providing electronic, transportation,        security, manpower and facility operations support        services. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         F.        Dale Markham has served as Chairman of the Board of the        Trust since May 16, 1991. He formerly served as        President, Vice President and Secretary through December        1996, and has been a Director of the Trust since its        inception in 1987. Effective March 3, 1998, he was        elected President and Chief Financial Officer. From 1991        until his retirement effective December 31, 1994, he was        a mortgage banking consultant and founder of the Real        Estate Financing Division of Wardon Financial        Corporation, a mortgage banking firm located in Phoenix,        Arizona. From 1982 through 1990, he was President, a        Director, and a Principal Stockholder of Markham, Sellers        & Mony, Inc., a mortgage banking firm which was the        original managing general partner of the current Advisor        and a Sponsor of the Trust. Mr. Markham served as        President of Western American Financial Corporation, a        mortgage banking firm from 1974 to 1982. He has been        involved in mortgage banking and real estate activities        since 1957.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         Charles        E. Trefzger is the President of Agemark, a healthcare        management company specializing in the long term care        industry. Through affiliated entities, he owns fifteen        assisted living facilities. Mr. Trefzger was Corporate        Counsel for Smith/Packett Med-Com from 1989 to 1996. From        1986 to 1988, Mr. Trefzger was Corporate Counsel to Brian        Center Management Corporation. Mr. Trefzger is a graduate        of Virginia Commonwealth University and holds a Juris        Doctor degree from Wake Forest University. He is licensed        to practice law in the State of North Carolina.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         At        the Board of Directors meeting held January 21, 2000, Mr.        Markham was elected to serve as Chairman, President and        Chief Financial Officer of the Trust and Joan M. Zeller        was elected to serve as Secretary of the Trust.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **Officers and Directors of        the Advisor**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         Effective        March 1, 1998 the Trust entered into a contract for        advisory services with HACG. The general partner of HACG        is Heritage. All of the stock of Heritage is held by        James R. Sellers, an affiliate of BHS, the former lessee        of Bayshore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         James        R. Sellers, age 68, is the President and sole stockholder        of Heritage, an affiliate of the Advisor. Heritage had        been the Managing General Partner of the Advisor since        July, 1990, when it succeeded Markham, Sellers &        Mony, Inc. ("MSM"). Mr. Sellers is also the        sole stockholder of BHS, the former lessee of Bayshore        until September 1, 1999. Mr. Sellers has been Senior Vice        President of Keystone Mortgage Partners LLC, an Arizona        based mortgage banking firm since May, 1993. Effective        February 2, 2001, GMAC Commercial Mortgage purchased the        assets of Keystone Mortgage Partners and Mr. Sellers        continues as a Senior Vice President and Tucson Branch        Manager of GMAC Commercial Mortgage. Mr. Sellers was        Senior Vice President of Catalina Mortgage Company, also        an Arizona based mortgage banking firm, from July, 1990        until May, 1993. From 1982 to 1990, he served as        Executive Vice President, a director, and a principal        stockholder of MSM, the original Managing General Partner        of the original Advisor. From 1974 until 1978, he served        as a Vice President and thereafter until 1982 as Senior        Vice President of Western American Financial Corporation,        a mortgage banking firm, where he supervised income        property lending staffs throughout the western United        States.                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **ITEM 10. EXECUTIVE        COMPENSATION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         Set        forth below is information concerning the annual        compensation for services in all capacities to the        Registrant by the President and Treasurer of the Trust        for the last three fiscal years ending December 31, 2001.        F. Dale Markham, President and Treasurer of the Trust,        was compensated by the Trust for services rendered to the        Trust during the fiscal years ended December 31, 2001,        2000 and 1999, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **SUMMARY        COMPENSATION TABLE**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Annual        Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |
| Name and        Principal Position                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Year | Total        Compensation |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |
| F. Dale Markham, Chairman of        the Board,              President and Chief        Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2001        2000        1999 | $11,000 paid        $11,000 paid        $11,000 paid |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         The        Trust paid or accrued annual directors’ fees of        $11,000 each to the unaffiliated Directors in 2001 and        2000. In 2001, $11,000 of Director's fees was paid to Mr.        Markham.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         The        Trust may pay officers whose only affiliation is a result        of being an officer of the Trust. The Trust is not        required to pay any compensation to officers and        directors of the Trust who are also affiliated with the        Advisor or its affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         No        other direct compensation was paid or payable by the        Trust during the fiscal year ended December 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **ITEM 11. SECURITY        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                          MANAGEMENT**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|         The        following table sets forth as of March 25, 2002 the        number and percentage of outstanding shares of Common        Stock beneficially owned by each person known by the        Trust to own beneficially more than five percent (5%) of        the Trust's outstanding shares of Common Stock, by each        director of the Trust, and by all directors and officers        of the Trust as a group.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

| Name of Beneficial Owner                                                                                            | Amount & Nature ofBeneficial Ownership | Percentage of         Outstanding Shares Owned |
|---------------------------------------------------------------------------------------------------------------------|--------------------------------------------|------------------------------------------------|
|                                                                                                                |                                       |                                           |
| Harbor American Capital        Group, a              California Limited        Partnership | 20,000        Shares (1)                   | 5.03%                                          |
|                                                                                                                |                                       |                                           |
| Sutter Opportunity Fund 2,        LLC                                                                               | 71,489        Shares                       | 17.98%                                         |
|                                                                                                                |                                       |                                           |
| Grady P. Hunter                                                                                                     | 2,500        Shares        (2)             | 0.63%        XXX                               |
|                                                                                                                |                                       |                                           |
| F. Dale Markham                                                                                                     | (1)                                        | XXX                                            |
|                                                                                                                |                                       |                                           |
| James R. Sellers                                                                                                    | (1)                                        | XXX                                            |
|                                                                                                                |                                       |                                           |
| All Directors and Officers                                                                                          | (1)                                        | XXX                                            |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)        The        current Advisor as of March 25, 2002, Harbor American        Capital Group, owns of record and beneficially 20,000        shares of Common stock. The former managing general        partner of the Advisor, MSM and each of the former        officers, directors and principal shareholders of MSM (F.        Dale Markham, the Estate of Marvin Mony, and James R.        Sellers) may be deemed to be beneficial owners of the        shares of Common Stock owned of record by Harbor American        Capital Group.                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (2)        Harbor        American Capital Group agreed to distribute to each        Unaffiliated Director, prior to 1989, as additional        compensation, 1,000 shares of Trust Common Stock for each        of the first three fiscal years of the Trust. As of the        date hereof, Harbor American Capital Group has neither        purchased any such shares from the Public Offering nor        has it purchased such shares from broker dealers since        the termination of the Public Offering. Discussions        between Harbor American Capital Group and Mr. Hunter, the        only Unaffiliated Director involved, have been held as to        the elimination of this distribution to the Unaffiliated        Director; however, no final agreement has been reached        with respect to this form of compensation. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **ITEM 12. CERTAIN        RELATIONSHIPS AND RELATED TRANSACTIONS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         The        information set forth below summarizes certain        transactions between the Trust and its directors and/or        five percent (5%) shareholders during fiscal year 2001.        The former managing general partner of the Advisor (MSM),        and each of the principal shareholders of MSM (F. Dale        Markham, the Estate of Marvin Mony and James R. Sellers)        and present officer, director and shareholder of Heritage        (James R. Sellers), may be deemed to be the beneficial        owners of more than 5% of the shares of Common Stock of        the Trust.                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **Acquisition and        Disposition Fees**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         The        Advisor receives acquisition and disposition fees with        respect to each real property purchased and sold by or on        behalf of the Trust, equal to up to 5% of the contract        price for the property. The Trust agreed to pay a        disposition fee of $150,000 for the sale of Bayshore. At        closing on August 6, 2001, $70,000 was paid to the        Advisor and, by agreement, $80,000 is to be paid to the        Advisor upon receipt of the final payment due under the        terms of the Third Mortgage Note.                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **Advisory Fee**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         During        the fiscal year ended December 31, 2001, the Trust paid        Advisory Fees to Harbor American Capital Group, the        current advisor, in the amount of $100,000 including the        above referenced $70,000 disposition fee. James R.        Sellers is the owner of Heritage which is the managing        general partner of the Advisor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **ITEM 13. EXHIBITS AND        REPORTS ON****FORM 8-K.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Index of Financial        Statements |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | The following financial        statements of Healthcare Investors of America, Inc. are        included. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Independent Auditor's Report        - Years ended December 31, 2001 and 2000. | F-1 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Balance sheets - December        31, 2001 and 2000. | F-2 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Statements of operations -        Years ended December 31, 2001 and 2000. | F-3 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Statements of cash flows -        Years ended December 31, 2001 and 2000. | F-4 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Notes to financial        statements - December 31, 2001 and 2000. | F-5 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **Reports on Form 8-K**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **Exhibits**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         See        attached list of Exhibits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 

| **SIGNATURES**                                                                                                                                                                                                                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                            |
|         In        accordance with Section 13 or 15(d) of the Securities        Exchange Act of 1934, the Registrant has duly caused this        report to be signed on its behalf by the undersigned,        thereunto duly authorized. |
|                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                            |
| Dated: April 1, 2002                                                                                                                                                                                                                                                            | HEALTHCARE INVESTORS OF        AMERICA, INC. |
|                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                            | BY: /s/ F. Dale        Markham                                         |
|                                                                                                                                                                                                                                                                            |           Director,        President and Chief Financial Officer                  (Principal        Executive, Financial and Accounting                   Officer) |
|                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                            |
|         In        accordance with the Exchange Act, this report has been        signed below by the persons on behalf of the Registrant        in the capacities and on the dates indicated.                                            |
|                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                            |
| Dated: April 1, 2002                                                                                                                                                                                                                                                            | BY: /s/ F. Dale        Markham                                         |
|                                                                                                                                                                                                                                                                            |           F.        Dale Markham |
|                                                                                                                                                                                                                                                                            |           Director,        President and Chief Financial Officer                  (Principal        Executive, Financial and Accounting                   Officer) |
|                                                                                                                                                                                                                                                                            |   |
| Dated: April 1, 2002                                                                                                                                                                                                                                                            | BY: /s/ Grady P. Hunter                                              |
|                                                                                                                                                                                                                                                                            |           Grady        P. Hunter, Director |
|                                                                                                                                                                                                                                                                            |   |
| Dated: April 1, 2002                                                                                                                                                                                                                                                            | BY: /s/ Charles E.        Trefzger                                      |
|                                                                                                                                                                                                                                                                            |           Charles        E. Trefzger, Jr., Director |

 

 

 

| EXHIBITS                                             |
|------------------------------------------------------|
|                                                 |
| TO                                                   |
|                                                 |
| FORM        10-KSB                                   |
|                                                 |
| ANNUAL        REPORT PURSUANT TO SECTION 13 OR 15(D) |
| OF THE        SECURITIES EXCHANGE ACT OF 1934        |
|                                                 |
| FOR                                                  |
|                                                 |
| HEALTHCARE        INVESTORS OF AMERICA, INC.         |
|                                                 |
| FOR        FISCAL YEAR ENDED                         |
| DECEMBER        31, 2000                             |

| 3.2*                              | Articles of        Amendment and Restatement of Trust filed as Exhibit I to        Pre-Effective Amendment No. 1 to the Trust's Registration        Statement on Form S-11 (Registration No. 33-11863) filed        June 2, 1987.                                                                                                                                                                                                                                         |
|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 3.3*                              | Third Amended        and Restated Bylaws of Trust filed as Exhibit 3.2 to Form        10-K filed March 30, 1988.                                                                                                                                                                                                                                                                                                                                                          |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.1*                             | Advisory        Service Agreement dated as of May 18, 1988 between the        Trust and Harbor American Capital Group, a California        Limited Partnership ("HACG") filed as exhibit        10.1 to Pre-Effective Amendment No. 1 to the Trust's        Registration Statement on Form S-11 (Registration No.        33-11863) filed June 2, 1987.                                                                                                          |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.2*                             | Advisory        Service Agreement dated as of June 25, 1987 between HACG        and Health Concepts Advisory Company filed as Exhibit        10.2 to Form 10-K filed March 30, 1988.                                                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3*                             | Advisory        Service Agreement dated as of June 25, 1987 between HACG        and Markham, Sellers & Mony, Inc. filed as Exhibit        10.3 to Form 10-K filed March 30, 1988.                                                                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.9(a)*                          | Dividend        Reinvestment Agreement and Plan dated as of June 24, 1987        between the Trust, Federated Transfer Agents, and LCS,        Inc. Company ("Federated") and HACG filed as        Appendix A to Pre-Effective Amendment No. 2 to the        Trust's Registration Statement on Form S-11 (Registration        No. 33-11863) filed July 2, 1987.                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.9(b)*                          | Amendment to        Dividend Reinvestment Agreement and Plan dated as of        December 11, 1987 between the Trust, Federated and HACG        filed as Exhibit 10.9(b) to Form 10-K filed on March 30,        1988.                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.9(c)*                          | Second        Amendment dated April 1, 1987 between the Trust,        Federated and HACG (filed as Amendment to Appendix        "A" to the Prospectus and incorporated by        reference).                                                                                                                                                                                                                                                                    |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.10*                            | Warrant        Agreement dated as of July 8, 1987 between the Trust and        Federated filed as Exhibit 10.10 to Form 10-K filed on        March 30, 1988.                                                                                                                                                                                                                                                                                                              |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.11*                            | Agreement        between HACG and the Trust filed as Exhibit 10.12 to        Pre-Effective Amendment No. 2 to the Trust's Registration        Statement on Form S-11 (Registration No. 33-11863) filed        July 2, 1987.                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.12*                            | Master        Facility Lease Agreement dated as of March 1, 1988        between the Trust and HCC-Bayshore Convalescent Center,        Inc. ("HCC-Bayshore") filed as Exhibit 10.12 to        Form 10-K filed on March 30, 1988.                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.13*                            | Security        Agreement dated as of March 1, 1988 between the Trust and        HCC-Bayshore filed as Exhibit 10.13 to Form 10-K filed        March 30, 1988.                                                                                                                                                                                                                                                                                                            |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.14*                            | Loan        Agreement dated as of March 1, 1988 between the Trust and        Citizens Fidelity Bank & Trust Company        ("Citizens") filed as Exhibit 10.14 to Form        10-K filed on March 30, 1988.                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.15*                            | Addendum to        Loan Agreement dated as of March 1, 1988 between the        Trust and Citizens filed as Exhibit 10.15 to Form 10-K        filed on March 30, 1988.                                                                                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.16*                            | Promissory        Note dated as of March 1, 1988 between the Trust and        Citizens filed as Exhibit 10.16 to Form 10-K filed on        March 30, 1988.                                                                                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.17*                            | Assignment of        HCC-Bayshore Security Agreement dated as of March 1, 1988        between the Trust and Citizens filed as Exhibit 10.17 to        Form 10-K filed on March 30, 1988.                                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.18*                            | Mortgage        dated as of March 1, 1988 between the Trust and Citizens        filed as Exhibit 10. 18 to Form 10-K filed on March 30,        1988.                                                                                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.19*                            | Assignment of        Leases and Rents dated as of March 1, 1988 between the        Trust and Citizens filed as Exhibit 10.19 to Form 10-K        filed on March 30, 1988.                                                                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.20*                            | Supplement to        Assignment of Leases and Rents dated as of March 1, 1988        between the Trust and Citizens filed as Exhibit 10.20 to        Form 10-K filed on March 30, 1988.                                                                                                                                                                                                                                                                                   |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.21*                            | Real Property        Purchase Agreement dated as of March 1, 1988 between the        Trust and Medical Resources Development Corporation, a        Florida corporation, filed as Exhibit 10.24 to Post        Effective Amendment No. 1 to the Trust's Registration        Statement on Form S-11 (Registration No. 33-11863) filed        April 13, 1988.                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.22*                            | Indemnification        Agreement dated March 9, 1988 between the Trust and HCC-        Bayshore, filed as Exhibit 10.25 to Post Effective        Amendment No. 1 to the Trust's Registration Statement on        Form S-11 (Registration No. 33-11863) filed April 13,        1988.                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.23*                            | Real Property        Purchase Agreement dated as December 27, 1989 by and        among (I) HCC-Country View Care Center, Inc.        ("HCC-Country View"), a Kentucky corporation;        (ii) HCC-New Life Care Center, Inc. ("HCC-New        Life"), a Kentucky corporation (collectively        HCC-Country View and HCC New Life are referred to as the        "Sellers"); (iii) the Trust; and (iv) HACG, and        exhibits thereto. |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.24*                            | Master        Facility Lease dated as of December 27, 1989 between the        Trust and HCC-Country View.                                                                                                                                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.25*                            | Master        Facility Lease dated as of December 27, 1989 between the        Trust and HCC-New Life.                                                                                                                                                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.26*                            | Master        Facility Lease dated as of December 27, 1989 between the        Trust and Citizens.                                                                                                                                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.27*                            | Amended and        Restated Promissory Note dated as of December 27, 1989        from the Trust to Citizens.                                                                                                                                                                                                                                                                                                                                                              |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.28*                            | Assumption        Agreement and Amendment of Deeds of Trust and Security        Agreement dated as December 27, 1989 by and among (i) the        Trust (ii) Citizens; (iii) HCC-Country View and (iv)        HCC-New Life.                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.29*                            | Supplement to        Assignment of Leases and Rents (Country View) dated as of        December 27, 1989 from the Trust to Citizens.                                                                                                                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.30*                            | Supplement to        Assignment of Leases and Rents (New Life) dated as of        December 27, 1989 from the Trust to Citizens.                                                                                                                                                                                                                                                                                                                                           |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.31*                            | Second CV        Note dated as of December 27, 1989 from the Trust to        HCC-Country View.                                                                                                                                                                                                                                                                                                                                                                            |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.32*                            | Second NL        Note dated as of December 27, 1989 from the Trust to        HCC-Country View.                                                                                                                                                                                                                                                                                                                                                                            |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.33*                            | Second Deed        of Trust dated as of December 27, 1989 from the Trust for        the benefit of Sellers.                                                                                                                                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.34*                            | Third CV Note        dated as of December 27, 1989 from the Trust to        HCC-Country View.                                                                                                                                                                                                                                                                                                                                                                             |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.35*                            | Third NL Note        dated as of December 27, 1989 from the Trust to HCC-New        Life.                                                                                                                                                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.36*                            | Third Deed of        Trust dated as of December 27, 1989 from the Trust for        the benefit of HCC-Country View.                                                                                                                                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.37*                            | Third Deed of        Trust dated as of December 27, 1989 from the Trust for        the benefit of HCC-New Life.                                                                                                                                                                                                                                                                                                                                                           |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.38*                            | Country View        Security Agreement dated as of December 27, 1989 from HCC        Country View to the Trust.                                                                                                                                                                                                                                                                                                                                                           |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.39*                            | New Life        Security Agreement dated as of December 27, 1989 from HCC        New Life to the Trust.                                                                                                                                                                                                                                                                                                                                                                   |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.40*                            | Collateral        Assignment of Notes and Loan Documents dated as of        December 27, 1989 from the Sellers to Citizens.                                                                                                                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.41*                            | Collateral        Assignment of Second Deed of Trust dated as of December        27, 1989 from the Sellers to Citizens.                                                                                                                                                                                                                                                                                                                                                   |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.42*                            | Assignment of        Country View Security Agreement dated as of December 27,        1989 from the Trust to Citizens.                                                                                                                                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.43*                            | Assignment of        New Life Security Agreement dated as of December 27, 1989        from the Trust to Citizens.                                                                                                                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.44*                            | Personal        Property Purchase Agreement dated as of April 17, 1989        between EMNH, Inc., HCC-Marshall Manor Nursing Home, Inc.        and HCC, filed as Exhibit 10.45 to Form 10-K filed April        1, 1991.                                                                                                                                                                                                                                                   |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.45*                            | Personal        Property Purchase Agreement dated as of April 17, 1989        between EMNH, Inc., HCC-Eaton Manor Nursing Home, Inc.        and HCC, filed as Exhibit 10.45 to Form 10-K filed April        1, 1991.                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.46*                            | Amendment to        HCC-Eaton Purchase dated as of October 6, 1989 between        EMNH, Inc., HCC-Eaton Manor Nursing HoMe, Inc. and HCC,        filed as Exhibit 10.46 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.47*                            | Amendment to        HCC-Marshall Purchase dated as of October 6, 1989 between        EMNH, Inc., HCC-Eaton Manor Nursing Home, Inc. and HCC,        filed as Exhibit 10.47 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                              |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.48*                            | Second        Amendment to HCC-Eaton Purchase dated as of December 28,        1989 between EMNH, Inc., HCC-Eaton Manor Nursing Home,        Inc. and HCC, filed as Exhibit 10.48 to Form 10-K filed        April 1, 1991.                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.49*                            | Amendment to        HCC-Marshall Purchase Agreement dated as of December 28,        1989 between EMNH, Inc., HCC-Manor Nursing Home, Inc. and        HCC, filed as Exhibit 10.49 to Form 10-K filed April 1,        1991.                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.50*                            | Master        Facility Lease dated as of April 1, 1990 between the        Trust and HCC-Marshall Manor Nursing Home, Inc., filed as        Exhibit 10.50 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.51*                            | Master        Facility Lease Agreement dated as of April 1, 1990        between the Trust and HCC-Eaton Manor Nursing Home, Inc.,        filed as Exhibit 10.51 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.52*                            | Real Property        Purchase Agreement dated as of April 17, 1989 between        Eaton Investment Company and the Trust, filed as Exhibit        10.52 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.53*                            | Real Property        Purchase Agreement dated as of April 17, 1989 between        Calhoun Investment Company and the Trust, filed as        Exhibit 10.53 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.54*                            | Amendment to        Real Property Purchase Agreement dated as of April 17,        1989 between Eaton Investment Company and the Trust,        filed as Exhibit 10.54 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                    |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.55*                            | Amendment to        Real Property Purchase Agreement dated as of April 17,        1989 between Calhoun Investment Company and the Trust,        filed as Exhibit 10.55 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.56*                            | Second        Amendment to Real Property Purchase Agreement dated as of        April 17, 1989 between Eaton Investment Company and the        Trust, filed as Exhibit 10.56 to Form 10-K filed April 1,        1991.                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.57*                            | Second        Amendment to Real Property Purchase Agreement dated as of        April 17, 1989 between Calhoun Investment Company and the        Trust, filed as Exhibit 10.57 to Form 10-K filed April 1,        1991.                                                                                                                                                                                                                                                    |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.58*                            | Promissory        Note dated as of April 1, 1990 between the Trust and D        & N for Eaton Manor, filed as Exhibit 10.58 to Form        10-K filed April 1, 1991.                                                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.59*                            | Promissory        Note dated as of April 1, 1990 between the Trust and D        & N for Marshall Manor, filed as Exhibit 10.59 to        Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.60*                            | Mortgage,        Security Agreement, Assignment of Rents, Leases, Guaranty        and Security Agreement and Financing Statement dated as        of April 1, 1990 between the Trust and D & N for        Eaton Manor, filed as Exhibit 10.60 to Form 10-K filed        April 1, 1991.                                                                                                                                                                            |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.61*                            | Mortgage,        Security Agreement, Assignment of Rents, Leases, Guaranty        and Security Agreement and Financing Statement dated as        of April 1, 1990 between the Trust and D & N for        Marshall Manor, filed as Exhibit 10.61 to Form 10-K filed        April 1, 1991.                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.62*                            | Lease        Guaranty and Subordination dated as of April 1, 1990 from        HCC and Guarantors in favor of the Trust for Eaton Manor,        filed as Exhibit 10.62 to Form 10-K filed April 1, 1991.                                                                                                                                                                                                                                                                   |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.63*                            | Lease        Guaranty and Subordination dated as of April 1, 1990 from        HCC and Guarantors in favor of the Trust for Marshall        Manor, filed as Exhibit 10.63 to Form 10-K filed April 1,        1991.                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.64*                            | Security        Agreement dated as of April 1, 1990 between HCC-Eaton        Manor and the Trust, filed as Exhibit 10.64 to Form 10-K        filed April 1, 1991.                                                                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.65*                            | Security        Agreement dated as of April 1, 1990 between HCC-Marshall        Manor and the Trust, filed as Exhibit 10.65 to Form 10-K        filed April 1, 1991.                                                                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.66*                            | First Omnibus        Amendment Agreement dated as of September 1, 1991 between        the Trust and Citizens filed as Exhibit 10.66 to Form        10-K filed May 29, 1992.                                                                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.67*                            | Promissory        Note (Renewal) dated as of September 1, 1991 from the        Trust to Citizens filed as Exhibit 10.67 to Form 10-K        filed May 29, 1992.                                                                                                                                                                                                                                                                                                           |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.68*                            | Mortgage        dated as of September 1, 1991 from the Trust to Citizens        filed as Exhibit 10.68 to Form 10-K filed May 29, 1992.                                                                                                                                                                                                                                                                                                                                   |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.69*                            | Assignment of        Leases and Rents dated as of September 1, 1991 from the        Trust to Citizens filed as Exhibit 10.69 to Form 10-K        filed May 29, 1992.                                                                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.70*                            | Extension        Agreement dated as of September 1, 1991 between the Trust        and Citizens filed as Exhibit 10.70 to Form 10-K filed        May 29, 1992.                                                                                                                                                                                                                                                                                                             |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.71*                            | Lease        effective as of September 1, 1992 between the Trust and        Eaton Manor Healthcare Services, Inc., filed as Exhibit        10.71 to Form 10-KSB filed on April 15, 1992.                                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.72*                            | Lease        effective as of September 1, 1992 between the Trust and        Marshall Manor Healthcare Services, Inc., filed as        Exhibit 10.72 to Form 10-KSB filed on April 15, 1993.                                                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.73*                            | Lease dated        as of September 25, 1992 between the Trust and Res-Care,        Inc. ("Res-Care")(Country View), filed as        Exhibit 10.73 to Form 10-KSB filed on April 15, 1993.                                                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.74*                            | Lease dated        as of September 25, 1992 between the Trust and Res-Care        (New Life), filed as Exhibit 10.74 to Form 10-KSB filed        on April 15, 1993.                                                                                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.75*                            | Second        Omnibus Amendment Agreement (Bayshore) effective as of        December 4, 1992 between the Trust and Citizens filed as        Exhibit 10.75 to Form 10-K filed on April 15, 1993.                                                                                                                                                                                                                                                                           |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.76*                            | Second        Amendment to Mortgage and Assignment of Leases and Rents        (re: Bayshore First Mortgage) effective as of December 4,        1992 from the Trust to Citizens filed as Exhibit 10.76 to        Form 10-K filed on April 15, 1993.                                                                                                                                                                                                                        |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.77*                            | Second        Amendment to Loan Agreement (Colorado Nursing Homes)        dated as of December 4, 1992 between the Trust and        Citizens filed as Exhibit 10.77 to Form 10-K filed on        April 15, 1993.                                                                                                                                                                                                                                                          |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.78*                            | Second        Amendment to Loan Agreement (Renewal and Increase) dated        as of September 20, 1992 from the Trust to Citizens filed        as Exhibit 10.78 to Form 10-K filed on April 15, 1993.                                                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.79*                            | Second        Extension Agreement (Weld Country Colorado) effective as        of December 4, 1992 between the Trust and Citizens filed        as Exhibit 10.79 to Form 10-K filed on April 15, 1993.                                                                                                                                                                                                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.80*                            | First        Amendment to Mortgage and Assignment of Leases and Rents        (re: Bayshore Second Mortgage) effective as of December        4, 1992 from the Trust to Citizens filed as Exhibit 10.76        to Form 10-K filed on April 15, 1993.                                                                                                                                                                                                                        |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.81*                            | Bill of Sale        effective as of December 4, 1992 from HCC-Country View to        the Trust filed as Exhibit 10.81 to Form 10-K filed on        April 15, 1993.                                                                                                                                                                                                                                                                                                        |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.82*                            | Bill of Sale        effective as of December 4, 1992 from HCC-New Life to the        Trust filed as Exhibit 10.82 to Form 10-K filed on April        15, 1993.                                                                                                                                                                                                                                                                                                            |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.83*                            | Bill of Sale        effective as of December 4, 1992 from the Trust to        Res-Care, filed as Exhibit 10.83 to Form 10-K filed on        April 15, 1993.                                                                                                                                                                                                                                                                                                               |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.84*                            | Promissory        Note dated as of December 4, 1992 from Res-Care to the        Trust, filed as Exhibit 10.84 to Form 10-K filed on April        15, 1993.                                                                                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.85*                            | Security        Agreement dated as of December 4, 1992 from Res-Care to        the Trust filed as Exhibit 10.85 to Form 10-K filed on        April 15, 1993.                                                                                                                                                                                                                                                                                                              |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.86*                            | Promissory        Note dated as of December 4, 1992 from the Trust to        Citizens filed as Exhibit 10.86 to Form 10-K filed on        April 15, 1993.                                                                                                                                                                                                                                                                                                                 |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.87*                            | Lease, as        amended, dated as of April 1, 1993 between the Trust and        Bayshore Healthcare Services, Inc., filed as Exhibit        10.87 to Form 10-K filed on April 18, 1994.                                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.88*                            | Second        Supplement to Assignment of Leases and Rents dated as of        May 18, 1993 from the Trust to PNC Bank, Kentucky, Inc.        (f/k/a Citizens) ("PNC"), filed as Exhibit        10.88 to Form 10-K filed April 18, 1994.                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.89*                            | Subordination        of Security Interest dated as of May 18, 1993 from the        Trust to PNC, filed as Exhibit 10.89 to Form 10-K filed        April 18, 1994.                                                                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.90*                            | Agreement        Concerning Interest Arrearage dated as of May 20, 1993        between the Trust and PNC, filed as Exhibit 10.90 to Form        10-K filed April 18, 1994.                                                                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.91*                            | Purchase and        Sale Agreement dated as of March 4, 1994 between the        Trust and Marshall Healthcare Investors, L.P., a Georgia        Limited partnership, filed as Exhibit 10.91 to Form 10-K        filed April 18, 1994.                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.92*                            | Amendment to        Promissory Note dated as of October 31, 1994 between the        Trust and PNC filed as Exhibit 10.92 to Form 10-KSB filed        April 1, 1996.                                                                                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.93*                            | Third        Extension of Leases and Rents (re: Bayshore First        Mortgage), dated as of October 31, 1994 between the Trust        and PNC filed as Exhibit 10.93 to Form 10-KSB filed April        1, 1996.                                                                                                                                                                                                                                                          |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.94*                            | Advisor        Agreement, dated as of March 1, 1998, between the Trust        and Harbor American Capital Group filed as Exhibit 10.95        to Form 10-KSB filed August 12, 1998.                                                                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.95*                            | Forbearance        Agreement, effective as of April 30, 1998, between the        Trust and PNC Bank, National Association filed as Exhibit        10.96 to Form 10-KSB filed August 12, 1998.                                                                                                                                                                                                                                                                             |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.96*                            | Commercial        Contract to Buy and Sell Real Estate [Seller or Private        Third-Party], dated June 17, 1998, between the Trust and        William E. Harper ("Harper") - $162,500; as        amended on July 11, 1998 filed as Exhibit 10.97 to Form        10-KSB filed August 12, 1998.                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.97*                            | Commercial        Contract to Buy and Sell Real Estate [Seller or Private        Third-Party], dated June 17, 1998, between the Trust and        Harper - $100,000; as amended on July 11, 1998 filed as        Exhibit 10.98 to Form 10-KSB filed August 12, 1998.                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.98*                            | Promissory        Note, dated July 24, 1998, from Harper to and in favor of        the Trust, in the original principal amount of $100,000        filed as Exhibit 10.99 to Form 10-KSB filed August 12,        1998.                                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.99*                            | Promissory        Note, dated July 24, 1998, from Harper to and in favor of        the Trust, in the original principal amount of $82,500        filed as Exhibit 10.100 to Form 10-KSB filed August 12,        1998.                                                                                                                                                                                                                                                     |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.100*                           | Deed of        Trust, dated July 24, 1998, from Harper for the benefit        of the Trust filed as Exhibit 10.101 to Form 10-KSB filed        August 12, 1998.                                                                                                                                                                                                                                                                                                           |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.101*                           | Collateral        Assignment of Promissory Notes and Deeds of Trust, dated        as of July 24, 1998, from the Trust to PNC filed as        Exhibit 10.102 to Form 10-KSB filed August 12, 1998.                                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.102*                           | Commercial        Contract to Buy and Sell Real Estate [Seller or Private        Third Party] dated August 6, 1998, between the Trust and        Continuum Health Partnership, Inc. filed as Exhibit        10.103 to Form 10-KSB filed August 12, 1998.                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.103*                           | Purchase and        Sale Agreement, dated as of June 3, 1999, as amended, by        and between the Trust, Bayshore Healthcare Services, Inc.        and Abraham Shaulson, filed as Exhibit 10.1 to Form 8-K        filed September 15, 1999.                                                                                                                                                                                                                             |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.104*                           | Master        Facility Lease, dated as of July 30, 1999, by and between        the Trust and Waterfield Nursing and Rehabilitation        Center, Inc., filed as Exhibit 10.2 to Form 8-K filed        September 15, 1999.                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| *Incorporated        by reference |

 

| **                                                 S.E.Clark        & Company,        P.C.                                          **                                                                                                                                             |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Member:        S.E.C. Practice Section of the American Institute of        Certified Public Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Independent        Auditors’ Report                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Board of Directors and Stockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Healthcare Investors of America, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Tucson, Arizona                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| We have audited the accompanying balance        sheets of Healthcare Investors of America, Inc., (the        "Trust"), as of December 31, 2001 and 2000 and        the related statements of operations and distributions in        excess of net earnings, and cash flows for the years then        ended. These financial statements are the responsibility        of the Trust's management. Our responsibility is to        express an opinion on these financial statements based on        our audits.                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| We conducted our audits in accordance        with auditing standards generally accepted in the United        States of America. Those standards require that we plan        and perform the audit to obtain reasonable assurance        about whether the financial statements are free of        material misstatement. An audit includes examining, on a        test basis, evidence supporting the amounts and        disclosures in the financial statements. An audit also        includes assessing the accounting principles used and        significant estimates made by management, as well as        evaluating the overall financial statement presentation.        We believe that our audits provide a reasonable basis for        our opinion. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| In our opinion, the financial statements        referred to above present fairly, in all material        respects, the financial position of Healthcare Investors        of America, Inc. as of December 31, 2001 and 2000, and        the results of its operations and its cash flows for the        years then ended in conformity with accounting principles        generally accepted in the United States of America.                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| The accompanying financial statements        have been prepared assuming that the Trust will continue        as a going concern. As discussed in Notes 1 and 10 to the        financial statements, the accumulation of losses raises        substantial doubt about its ability to continue as a        going concern. Management's plans concerning these        matters are also described in Note 1 and include the        pending law suit filed by PNC, discontinuing operations        and distribution of the residual proceeds. The financial        statements do not include adjustments that may result        from the ultimate resolution of these matters.                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **S.E.Clark & Company, P.C.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Tucson, Arizona                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| March 15, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                            Member:        National Association of Certified Valuation        Analysts                                                                                                                                                                                                                                                                                                                                                                           |
| 744 N.        Country Club Road, Tucson, AZ 85716 (520) 323-7774, Fax        (520) 323-8174, www.seclarkco.com                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

 

 

| **Healthcare        Investors of America, Inc.** |
|--------------------------------------------------|
|                                             |
| Balance Sheets                                   |
| December 31, 2001 and        2000                |
|                                             |

| Assets:                                                                                                                                                                                    | 2001                                                                                                                                 |                                                                             | 2000                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|--------------------------------------------|
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
| Real estate        property:                                                                                                                                                               |                                                                                                                                 |                                                                             |                                       |
|                                                                                                                                                                                       | Land                                                                                                                                 | $            -  |                                       | $  393,195  |
|                                                                                                                                                                                       | Building and improvements,        net of accumulated           depreciation of $1,511,517 at December        31, 2000 | -                                                                           |                                       | 3,321,314  |
| Prepaid expenses                                                                                                                                                                           | -                                                                                                                               |                                                                             | 50,000                                |
| Notes receivable                                                                                                                                                                           | 4,339,780                                                                                                                       |                                                                             | -                                     |
| Cash and cash        equivalents                                                                                                                                                           |      99,375                                                                                            |                                                                             |      20,803  |
|                                                                                                                                                                                       | Total Assets                                                                                                                         | $4,439,155                                                                  |                                       | $3,785,312  |
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
| Liabilities and        Stockholders’ Equity (Deficiency):                                                                                                                             |                                                                                                                                 |                                                                             |                                       |
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
| Mortgage notes        payable                                                                                                                                                              | $3,883,960                                                                                                                      |                                                                             | $4,098,780                            |
| Deferred gain on        sale of property                                                                                                                                                   | 494,660                                                                                                                         |                                                                             | -                                     |
| Accounts payable        and accrued expenses                                                                                                                                               | 67,556                                                                                                                          |                                                                             | 65,056                                |
| Commissions        payable                                                                                                                                                                 | 80,000                                                                                                                          |                                                                             | -                                     |
| Disputed claims                                                                                                                                                                            | 92,623                                                                                                                          |                                                                             | 92,623                                |
| Purchase        deposits                                                                                                                                                                   |             -                                                       |                                                                             | 375,000                               |
|                                                                                                                                                                                       | Total Liabilities                                                                                                                    | 4,618,799                                                                   |                                       | 4,631,459  |
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
| Stockholders'        Equity (Deficiency):                                                                                                                                                  |                                                                                                                                 |                                                                             |                                       |
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
| Common stock,        $.01 par value; 10,000,000             shares authorized, 397,600        shares issued              and outstanding | 3,976                                                                                                                           |                                                                             | 3,976                                 |
| Paid in capital                                                                                                                                                                            | 3,652,823                                                                                                                       |                                                                             | 3,652,823                             |
| Distributions in        excess of net earnings                                                                                                                                             | (3,836,443)                                                                                                                          |                                                                             | (4,502,946)                                |
|                                                                                                                                                                                       | Total Stockholders' Equity        (Deficiency)                                                                                       |   (179,644)                                                            |                                       |   (846,147) |
|                                                                                                                                                                                       |                                                                                                                                 |                                                                             |                                       |
| Total        Liabilities and Stockholders' Equity (Deficiency)                                                                                                                             | $4,439,155                                                                                                                      |                                                                             | $3,785,312                            |

|                                                                              |
|-----------------------------------------------------------------------------------|
| The accompanying notes        are an integral part of these financial statements. |
|                                                                              |
| F-2                                                                               |

 

 

| **Healthcare        Investors of America, Inc.**      |
|-------------------------------------------------------|
| Statements of        Operations and Distributions     |
| In Excess of Net        Earnings                      |
| For the Years Ended        December 31, 2001 and 2000 |
|                                                  |

|                                                   | 2001                                                              |                                                   | 2000                                                    |
|--------------------------------------------------------|-------------------------------------------------------------------|--------------------------------------------------------|---------------------------------------------------------|
| Revenues:                                              |                                                              |                                                   |                                                    |
|                                                   |                                                              |                                                   |                                                    |
|                                                   | Rental income                                                     | $   331,998                        |                                                    | $   579,768  |
|                                                   | Gain on sale of property                                          | 1,256,587                                         |                                                    | -  |
|                                                   | Interest and other income                                         |      169,752             |                                                    |          7,378  |
|                                                   | 1,758,337                                                    |                                                   | 587,146                                            |
|                                                   |                                                              |                                                   |                                                    |
| Expenses:                                              |                                                              |                                                   |                                                    |
|                                                   |                                                              |                                                   |                                                    |
|                                                   | Depreciation and        amortization                              | 80,758                                            |                                                    | 129,543  |
|                                                   | Interest expense                                                  | 344,821                                           |                                                    | 391,556  |
|                                                   | Advisor, directors fees and        expenses                       | 63,988                                            |                                                    | 63,295  |
|                                                   | Other operating expenses                                          | 26,916                                            |                                                    | 38,444  |
|                                                   | Bad debt expense                                                  |        78,351  |                                                    |         89,702  |
|                                                   |      594,834                        |                                                   |       712,540        |
|                                                   |                                                              |                                                   |                                                    |
| Net Income        (Loss)                               | $ 1,163,503                                             |                                                   | $   (125,394)                            |
|                                                   |                                                              |                                                   |                                                    |
|                                                   |                                                              |                                                   |                                                    |
| Net Income        (Loss) Per Share (Basic and Diluted) | $         2.93  |                                                   | $        (0.32) |
|                                                   |                                                              |                                                   |                                                    |
|                                                   |                                                              |                                                   |                                                    |
| Weighted Average        Shares Outstanding             |      397,600                        |                                                   |      397,600              |
|                                                   |                                                              |                                                   |                                                    |
|                                                   |                                                              |                                                   |                                                    |
| Distributions In        Excess of Net Earnings:        |                                                              |                                                   |                                                    |
|                                                   |                                                              |                                                   |                                                    |
|                                                   | Beginning of year                                                 | $(4,502,946)                                           |                                                    | $(4,377,552) |
|                                                   |                                                              |                                                   |                                                    |   |
|                                                   | Net income (loss)                                                 | 1,163,503                                         |                                                    | (125,394) |
|                                                   |                                                              |                                                   |                                                    |   |
|                                                   | Distributions                                                     |     (497,000)                      |                                                    |                -  |
|                                                   |                                                              |                                                   |                                                    |   |
|                                                   | End of year                                                       | $(3,836,443)                                           |                                                    | $(4,502,946) |

|                                                                              |
|-----------------------------------------------------------------------------------|
| The accompanying notes        are an integral part of these financial statements. |
|                                                                              |
| F-3                                                                               |

 

 

 

| **Healthcare        Investors of America, Inc.**      |
|-------------------------------------------------------|
| Statements of Cash        Flows                       |
| For the Years Ended        December 31, 2001 and 2000 |

|                                                                                                                                                          | 2001                                                                                        |                                         | 2000                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|----------------------------------------------|-------------------------------------------------------|
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Cash Flows From        Operations:                                                                                                                            |                                                                                        |                                         |                                                  |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Net Income        (Loss)                                                                                                                                      | $1,163,503                                                                             |                                         | $(125,394)                                            |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Adjustments to        reconcile net income (loss) to net cash               provided by (used        for) operating activities: |                                                                                        |                                         |                                                  |
|                                                                                                                                                          | Depreciation and        amortization                                                        | 80,758                                  |                                                  | 129,543  |
|                                                                                                                                                          | Gain on sale of        property                                                             | (1,256,587)                                  |                                                  | -  |
|                                                                                                                                                          | Changes in        assets and liabilities:                                                   |                                         |                                                  |   |
|                                                                                                                                                          |                                                                                        | Rent and other receivables                   | -                                                |   | 90,000  |
|                                                                                                                                                          |                                                                                        | Prepaid expenses                             | 50,000                                           |   | -  |
|                                                                                                                                                          |                                                                                        | Accounts payable and accrued        expenses |        2,500  |   |     (42,357) |
| Net cash        provided by (used for) operating activities                                                                                                   |      40,174                                                   |                                         |       51,792       |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Cash Flows From        Investing Activities:                                                                                                                  |                                                                                        |                                         |                                                  |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Property sale        related items:                                                                                                                           |                                                                                        |                                         |                                                  |
|                                                                                                                                                          | New notes        receivable                                                                 | (4,500,000)                                  |                                                  | -  |
|                                                                                                                                                          | Principal        received on notes receivable                                               | 160,220                                 |                                                  | -  |
|                                                                                                                                                          | Sale of property                                                                            | 5,089,998                               |                                                  | -  |
|                                                                                                                                                          | Cash paid for        capital improvements                                                   | -                                       |                                                  | (60,000) |
| Purchase of        personal property                                                                                                                          |               -  |                                         |   (149,514)                                 |
| Net cash        provided by (used for) investing activities                                                                                                   |     750,218                                                        |                                         |   (209,514)                                 |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Cash Flows From        Financing Activities:                                                                                                                  |                                                                                        |                                         |                                                  |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
|                                                                                                                                                          | Payments on        long-term borrowings                                                     | (214,820)                                    |                                                  | (352,410) |
|                                                                                                                                                          | Additions to        long-term borrowings                                                    | -                                       |                                                  | 125,786  |
|                                                                                                                                                          | Distributions                                                                               |   (497,000)                        |                                                  |               -  |
| Net cash used        for financing activities                                                                                                                 |   (711,820)                                                                       |                                         |   (226,624)                                 |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Cash and Cash        Equivalents:                                                                                                                             |                                                                                        |                                         |                                                  |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Increase        (decrease) during year                                                                                                                        | 78,572                                                                                 |                                         | (384,346)                                             |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| Beginning of        year                                                                                                                                      |      20,803                                                   |                                         |     405,149                  |
|                                                                                                                                                          |                                                                                        |                                         |                                                  |
| End of year                                                                                                                                                   | $    99,375                                                        |                                         | $     20,803            |

|                                                                                    |
|-----------------------------------------------------------------------------------------|
| No income taxes are due or payable.        Interest expense approximates interest paid. |
|                                                                                    |
| The accompanying notes        are an integral part of these financial statements.       |
|                                                                                    |
| F-4                                                                                     |

 

**** 

| **Healthcare Investors of        America, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Notes to Financial        Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **December 31, 2001 and        2000**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 1: ORGANIZATION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The affairs of Healthcare        Investors of America, Inc. (the "Trust") are        managed by its advisor, Harbor American Capital Group        (the "Advisor") effective March 1, 1998. The        Trust engages in acquiring and leasing healthcare        facilities (nursing homes and intermediate care mental        retardation developmentally disabled nursing facilities)        under long-term leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The historical financial        statements presented are prepared under the assumption        that the Trust is qualified as a real estate investment        trust ("REIT") and is not subject to federal        income taxes on amounts distributed to stockholders        (provided distributions to stockholders are at least 95%        of the Trust's real estate investment trust taxable        income and the Trust meets certain other conditions). In        the event the Trust does not qualify as a REIT, the Trust        would be taxable as a C corporation under the Internal        Revenue Code. However, as a taxable corporation, the        Trust would not owe any current tax or tax for prior        years due to its net operating loss carryovers.        Therefore, no adjustment would be required to the        historical financial statements presented related to any        tax provision.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The Trust's financial        statements have been presented on the basis that it is a        going concern, which contemplates the realization of        assets and the satisfaction of liabilities in the normal        course of business. As of December 31, 2001, the Trust        owns no real estate and has one mortgage receivable due        July 31, 2002. On August 6, 2001, the remaining property        then owned, Bayshore Convalescent Center in North Miami,        Florida, ("Bayshore" or "the Florida        Property") was sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Management's plans include        collection of the deferred balance resulting from the        sale of the Florida Property and consideration of        liquidating the trust or recapitalizing the trust.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The financial statements do        not include any adjustments relating to the        recoverability of recorded asset amounts or the amount of        liabilities that might be necessary should the Trust be        unable to continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The Company's mortgage notes        payable matured on June 20, 1997 and the Bank demanded        payment in full by letter dated August 15, 1997. In that        connection, the Trust and the Bank entered into a        Forbearance Agreement (the "Forbearance        Agreement") dated as of April 30, 1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Under the Forbearance        Agreement, the Bank agreed to forbear from exercising its        remedies until July 31, 1998. In consideration therefor,        the Trust agreed to increase the outstanding principal        amount of a Promissory Note (Renewal and Increase), dated        as of September 20, 1992, in favor of the Bank from        $1,000,000 to $1,681,170, a portion of the security for        which is a second mortgage on Bayshore. The Trust agreed        to waive any defenses, offset or claims it may have as of        the date of the Forbearance Agreement against the Bank        related to the outstanding debt of the Trust to the Bank.        The Forbearance Agreement further required the Trust to        market the Colorado Properties and auction them by June        30, 1998, if by May 31, 1998, the Trust had not sold or        had had a binding contract on the Colorado Properties on        terms reasonably acceptable to the Trust and Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The Forbearance Agreement        also contained representations of the Trust that, among        other items, it is solvent and has no present intention        of filing or acquiescing in any bankruptcy or insolvency        proceeding. To the extent that the Trust would so file or        acquiesce, the Trust agreed not to contest any motion of        the Bank seeking relief from an automatic stay. Upon (i)        a breach or violation of any term covenant or condition        of the Forbearance Agreement or related documents, (ii) a        material                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| F-5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Healthcare Investors of        America, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Notes to Financial        Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **December 31, 2001 and        2000**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| breach or default under any        of the other loan documents in connection with the Trust        indebtedness to the Bank, or (iii) any representation or        warranty or other statement contained in the Forbearance        Agreement or related documents, or any loan documents in        connection with Trust indebtedness to the Bank being        false or misleading in any material respect or omitting a        material fact necessary to make such representation,        warranty or statement not misleading, then the Bank could        terminate its forbearance. The Forbearance Agreement has        been extended several times, currently to June 30, 2003.        See Note 9, Sixth Amendment to Forbearance Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 2: SUMMARY OF        SIGNIFICANT ACCOUNTING POLICIES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (1) CASH AND CASH        EQUIVALENTS – For purposes of the statements of cash        flows, the Trust considers all short-term debt securities        purchased with an original maturity of three months or        less to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2) BUILDINGS AND        IMPROVEMENTS – Depreciation of these assets is        computed by the straight-line method over the useful        lives of the assets which have been estimated to be 7 to        40 years. The Trust periodically evaluates the net        realizable value of its properties and provides a        valuation allowance when it becomes probable there has        been a permanent impairment of value. Depreciation is        suspended while a facility is vacant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (3) LOAN COSTS – Loan        costs have been deferred and are being amortized using        the straight-line method over the term of the related        borrowing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (4) REVENUE RECOGNITION        – Rental income from operating leases is recognized        as earned over the life of the lease agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (5) INCOME TAXES – As        of December 31, 2001, the Company had net operating loss        carryforwards for income tax purposes of approximately        $1,466,000 which will expire, beginning in 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (6) FAIR VALUE OF FINANCIAL        INSTRUMENTS – The carrying values of the financial        instruments disclosed elsewhere in these notes, are        deemed to be representative of their fair values, as the        interest rates approximate market rates giving        consideration to their respective risks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (7) USE OF ESTIMATES –        Management has made certain estimates and assumptions        that affect certain reported amounts and disclosures.        Accordingly, actual results could differ from those        estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 3: REAL ESTATE        PROPERTIES AND LEASES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| During the year ended        December 31, 2001, the Trust sold its remaining property,        a nursing home in Florida (the "Bayshore" or        "the Florida Property"). See Note 7, Sale of        Bayshore (Florida Property). The Property was formerly        leased to the Purchaser.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 4: MORTGAGE NOTES        PAYABLE**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 12/31/01   | 12/31/00   |
| Bank mortgage        note-payable in monthly installments of            $44,149.67, including interest at prime        plus one percent            (currently at 5.75%), through June 30,        2003, at which            date the unpaid balance is due in full                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $3,883,960 | $4,098,780 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| F-6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Healthcare Investors of        America, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Notes to Financial        Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **December 31, 2001 and        2000**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| In connection with the sale        of the Florida property (See Note 7), the Trust attempted        to secure consent to the transfer and assumption of the        PNC debt by the Purchaser. This consent was not secured;        therefore, the liability will remain until it is paid in        full on or before July 31, 2002. See Note 7: Sale of        Bayshore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 5: RELATED PARTY        TRANSACTIONS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Effective March 1, 1998, the        Trust entered into an agreement with the Predecessor        Advisor, and affiliates of the Predecessor Advisor, to        provide various services to the Trust in exchange for        fees, as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Advisory fees at        an annual rate of the greater of $30,000 or 5% of net        income of the Trust, as defined. The Trust paid advisory        fees of $97,500 and $30,000 to the Advisor during the        years ended December 31, 2001 and 2000 respectively. For        2001, this included a contractual disposition fee of        $70,000 related to the sale of the property. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Property        management, acquisition and disposition fees to be paid        based upon contractual agreements between the parties.        The Trust incurred the above referenced $70,000        disposition fees in the third quarter of 2001. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | From May 1, 1993        through August 31, 1999, the Florida Property was leased        to Bayshore Healthcare Services, Inc. ("BHS"),        an affiliate of the Advisor. When the Property was sold        on August 6, 2001, the Purchaser agreed to pay        $249,598.98 to the Agency for Health Care Administration        ("AHCA") on behalf of Bayshore Healthcare        Services, Inc. This created a receivable from BHS to the        Trust of which $192,785.21 was repaid. The Trust paid an        additional $21,537.56 to AHCA on behalf of BHS. Since        there is no assurance that BHS will have adequate funds        to pay the amount due to the Trust, management has fully        reserved the note as a bad debt as of December 31, 2001.        The net amount written off during 2001 was $78,351.33. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | During the year        ended December 31, 2000, the Trust borrowed $125,582,        including taxes, penalties and interest, to bring the        taxes current. The funds were added to the related        mortgage. Since the taxes were the liability of BHS, the        Trust accepted a promissory note from BHS in the amount        of $125,582 plus interest at 10% payable on demand. Since        there was no assurance that BHS would have adequate funds        to pay the note, management has fully reserved the note        and accrued interest through December 31, 2000 as a bad        debt. Additionally, amounts previously accrued by the        Trust for payment of the related 1997 taxes        (approximately $42,000) have been offset against the bad        debt expense. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 6: DISPUTED CLAIMS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Management of the        Predecessor Advisor entered into certain transactions        related to the potential debt refinancing and/or sale of        the Properties. The Trust has recorded certain        professional fees related to those transactions as        disputed claims, believing that they are obligations, not        of the Trust, but of former management or other third        parties. In connection with one of these disputes, the        Trust has been named a codefendant with the Predecessor        Advisor for payment of fees totaling approximately        $50,000 which relate to establishing the advisory        relationship with the Predecessor Advisor. The advisory        relationship was terminated by the Trust for        nonperformance of management of the Predecessor Advisor.        It is the opinion of current management that these claims        are the obligation of former management due to its        nonperformance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| F-7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Healthcare Investors of        America, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Notes to Financial        Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **December 31, 2001 and        2000**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 7: SALE OF BAYSHORE        (FLORIDA PROPERTY)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Effective August 6, 2001,        the sale of Bayshore was completed. Modifications to the        original contract included the following: (1) The sale        price was reduced from $5,750,000 to $5,600,000 and the        Purchaser agreed to pay the real estate commission of        $150,000 direct and outside of escrow; (2) Purchaser        accepted title subject to the two mortgages due PNC Bank        in the amount of $3,989,666 and agreed to make payments        as they come due on the 20th of each month beginning        August 20, 2001. Further, the Purchaser agreed to pay the        PNC loans in full on or before July 31, 2002. (3)        Purchaser agreed to assume and pay the Trust debt due the        State of Florida, Agency for Health Care Administration        in the amount of $249,599. (4) Purchaser acknowledged        that a transfer of title and placing of new Trust        subordinate debt against the property would constitute a        default under the terms of the PNC mortgage documents.        The Purchaser agreed to accept title with these        conditions of default and hold Seller harmless from any        damages that may result from acceleration of the debt and        foreclosure on the property by PNC Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| By letter dated September 5,        2001, PNC Bank notified the Trust and Prime Investments,        LLC, the purchaser, ("Prime") (i) that there is        a default under the terms of the Forbearance Agreement by        reason of the sale without securing the prior written        consent of PNC Bank; (ii) that the cash proceeds of the        sale were diverted and not applied to amortize the        mortgage indebtedness of PNC, irrespective of PNC's        rights as lender; (iii) that PNC will consider all        appropriate means of recovering from the Trust, or        recouping from its shareholders, any misapplied funds or        improper distributions; (iv) that PNC reserves its rights        to initiate legal action and take other steps, including        investigating the possibility of a criminal action, if        determined by counsel to be appropriate. Prime has made,        on a timely basis, all PNC mortgage payments due from        August 20, 2001 through December 20, 2001. Trust        management and Prime have each contacted PNC and        requested that no default action be taken by PNC in        consideration of (x) the strong cash equity expended by        Prime (approximately $1,000,000); (y) the assurance by        Prime that it would pay PNC in full on or before July 31,        2002; and (z) Trust management's offer to monitor        Bayshore operations and financial statements and report        regularly on same to PNC. (5) Purchaser agreed to offer        as additional collateral to the new Trust third mortgage        property it intends to purchase adjacent to the subject        property, subject to a maximum of $150,000 first lien        debt. To date, Purchaser has not purchased such        additional property. (6) Purchaser also agreed to provide        periodic financial and operating reports to the Trust for        its use, including forwarding such reports, together with        appropriate comments, to PNC Bank. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The following recaps the        financial terms of the sale in rounded figures:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Total Selling Price | $5,600,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Less: |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | PNC Mortgages (first and        second combined) | 3,990,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Earnest Deposit | 325,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Assumption of Medicaid Debt | 250,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Third Mortgage Due to Trust | 510,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Closing Costs |      78,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Net Cash Proceeds at Closing | $  447,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| The actual amount of the        Note secured by the Third Mortgage due the Trust is        $510,334.08. It is payable $15,000 monthly beginning        August 31, 2001, including 10% per annum interest and is        due and payable in full on July 31, 2002. All payments        due from August 31, 2001 through December 31, 2001 were        timely made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| F-8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Healthcare Investors of        America, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Notes to Financial        Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **December 31, 2001 and        2000**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Harbor American Capital        Group, the advisor to the Trust, was entitled to a 3%        sale fee, or $168,000, under the terms of its Advisory        Agreement. It accepted a flat fee of $150,000, payable        $70,000 at close of the sale and $80,000 when the Third        Mortgage Note is paid in full on or before July 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| After considering        obligations of the Trust to PNC Bank under the terms of        its First and Second Mortgages, Directors of the Trust        determined the PNC Bank position would not be endangered        by payment of the sales proceeds to Shareholders in the        form of a dividend. After adding other cash on hand, the        Directors declared a dividend of $1.25 per share to be        paid on August 21, 2001 to shareholders of record on        August 14, 2001. This dividend was paid by the Trust's        transfer agent on August 20, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 8: TENDER OFFER FOR        SHARES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| On July 9, 2001, Sutter        Opportunity Fund 2 LLC ("Sutter") tendered an        offer to acquire up to 119,280 shares of the Trust common        stock for $1.10 per share. The offer expired, unless        extended, on August 10, 2001. The purchaser then owned no        shares of Trust stock. On July 19, 2001, the Trust sent a        letter to shareholders advising the status of the sale of        Bayshore, the sale closing of which was then uncertain,        and expressing no opinion and remaining neutral with        regard to a recommendation to shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| On August 6, 2001, the Trust        sent a letter to shareholders advising them of the sale        closing of Bayshore and further advised them of the        declaration of a dividend of $1.25 per share payable on        August 21, 2001 to shareholders of record on August 14,        2001. The tender offer expired by its terms and        shareholders holding 31,489.31 shares of Trust stock sold        their shares to Sutter. On March 15, 2002, one additional        shareholder sold 40,000 shares to Sutter in a private        sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 9: SIXTH AMENDMENT        TO FORBEARANCE AGREEMENT**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| PNC Bank and the Trust        entered into the Sixth Amendment to Forbearance Agreement        dated July 9, 2001, and effective June 20, 2001. The        Amendment included (1) an acknowledgement that the loan        balances as of June 20, 2001 were $2,824,338 and        $1,209,314; (2) the termination date was extended to June        30, 2003; (3) the interest rate was set at the Prime Rate        of PNC plus one percent (1%) per annum; (4) monthly        payments, regardless of interest rate changes are to be        $30,858.00 (1990 Note) and $13,291.67 (1992 Note); and        (5) the Trust acknowledged re-statement of previous        provisions of the original Forbearance Agreement dated        April 30, 1998, as amended. See Note 7 above re Notice of        Default from PNC Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **NOTE 10: SUBSEQUENT        EVENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| On March 11, 2002, PNC Bank        filed a foreclosure action for Bayshore in PNC Bank v.        Healthcare Investors of America, Inc.**,**        et al, in the 11th Circuit for Miami-Dade County        Florida, Case No. 0206571 CA 04 (the "Foreclosure        Suit"). In the Complaint, PNC Bank alleges: (i) a        breach by the Trust of the terms of the First and Second        Mortgages by (a) transferring Bayshore to Prime without        the consent of PNC Bank, and (b) further encumbering        Bayshore with the Third Mortgage in favor of the Trust;        (ii) a breach by the Trust of the terms of the PNC Bank        Notes by failing to pay in full the accelerated amounts        due; (iii) tortuous interference by Prime, Shaulson, the        Advisor, Heritage Advisory Corporation        ("Heritage") and James Sellers        ("Sellers") with the relationship of PNC Bank        and the Trust through the sale of Bayshore to Prime        without PNC Bank consent and over its objections; (iv) a        violation of Florida law by the transfer of Bayshore to        Prime although Bayshore served as secured collateral in        favor of PNC Bank; (v) civil conspiracy of the Trust,        Shaulson, Prime, the Advisor, Heritage, Sellers and Dale        Markham ("Markham"), the Chairman and President        of the Trust, in the sale of Bayshore to Prime without        the consent of PNC Bank and over                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| F-9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Healthcare Investors of        America, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Notes to Financial        Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **December 31, 2001 and        2000**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| its objections and the        further encumbrance of Bayshore with the Third Mortgage;        and (vi) fraudulent inducement by the Trust and Markham        in causing PNC Bank to enter into the June 2001 extension        of the Forbearance Agreement one month prior to the sale        of Bayshore to Prime.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| PNC Bank is seeking        foreclosure of Bayshore, payment of the PNC Bank Notes,        compensatory damages in an unstated sum and the        appointment of a receiver of Bayshore under the terms of        the First and Second Mortgages. To date, the Trust has        not answered the Complaint but intends to defend this        action. Trust management at this early stage of the        Foreclosure Suit cannot make a determination as to the        outcome of the Foreclosure Suit; however, if the outcome        is adverse to the Trust, the Trust will at a minimum        suffer the loss of Bayshore, and most likely the benefit        of the Third Mortgage in favor of the Trust. Trust        Management cannot ascertain the loss or range of loss to        the Trust upon the sale of Bayshore as a result of        foreclosure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| F-10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |