SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended November 30, 1995 Commission File No.
0-8559
P.H.C., INC.
_________________________________________________________________
(Exact name of registrant as specified in its Charter)
Minnesota 41-0843021
________________________________ __________________
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
301 City Avenue
Bala Cynwyd, Pennsylvania 19004
________________________________ __________________
(Address of Principal Executive (Zip Code)
Offices)
Registrant's telephone number,
including area code: (610) 667-8225
_________________
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
_________ _______
Indicated the number of shares outstanding of each of the
Registrant's classes of common stock as of the close of the
period covered by this report.
Common stock: 2,295,788 shares
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<PAGE>
Part 1. Financial Information
_____________________
Item 1. Financial Statements
P.H.C., INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
November 30, May 31,
1995 1995
____________ _________
(Unaudited)
<S> <C> <C>
ASSETS
Cash $ 674 $ 674
Prepaid income taxes 83 83
Due from officer/director (Note 2) 840,200 846,489
________ _________
$840,957 $847,246
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Due to affiliate (Note 3) $5,505 $5,505
Distribution payable (Note 5) 106,696 106,696
Accrued expenses 8,205 13,936
________ _______
120,406 126,137
________ _______
Shareholders' equity (Note 5):
Common stock, $.10 par; authorized
5,000,000 shares; issued and
outstanding 2,295,788 shares 229,578 229,578
Additional paid in capital 520,472 520,472
Deficit (29,499) (28,941)
_________ ________
720,551 721,109
_________ ________
$840,957 $847,246
========= ========
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
P.H.C., INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended Three months ended
November 30, November 30,
__________________ ___________________
1995 1994 1995 1994
________ _________ ________ ________
<S> <C> <C> <C> <C>
Revenue, interest income
(Note 2) $ 31,607 $ 31,794 $ 15,500 $ 16,610
General and administrative
expenses (Notes 3 and 4) 32,165 20,563 15,470 9,218
________ _________ ________ ________
Income (loss) before income
taxes (558) 11,231 30 7,392
Income taxes (Note 6) - - - -
________ _________ ________ ________
Net income (loss) (558) 11,231 30 7,392
Deficit, beginning (28,941) (28,794) (29,529) (24,955)
________ _________ _________ ________
Deficit, ending ($29,499) ($17,563) ($24,499) ($17,563)
======== ========= ========= ========
Earnings per share $0 $0 $0 $0
======== ========= ========= =========
Weighted average number of
shares outstanding 2,295,788 2,295,788 2,295,788 2,295,788
========= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
P.H.C., INC.
STATEMENT OF CASH FLOWS
Increase (decrease) in cash
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
November 30,
__________________
1995 1994
______ ______
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (558) $ 11,231
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Increase (Decrease) in accrued
expenses (5,731) 3,877
________ ________
Net cash provided by (used in)
operating activities (6,289) 15,108
________ ________
Cash flows from investing activities:
Net cash provided by (used in)
investing activities, advances to
(from) officer/director, net 6,289 (14,725)
________ ________
Cash flows from financing activities:
Net cash used in financing activities,
distributions paid - (400)
________ ________
Net increase (decrease) in cash 0 (17)
Cash, beginning of period 674 253
________ ________
Cash, end of period $ 674 $ 236
======== ========
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
P.H.C., INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED NOVEMBER 30, 1995
(Unaudited)
1. Business activity and summary of significant accounting
policies:
Business activity:
The company presently conducts no business; its only income
consists of interest from advances to an
officer/shareholder.
Cash equivalents:
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with
original maturities of three months or less to be cash
equivalents.
Earnings per share:
Earnings per share are computed on the weighted average
number of common shares outstanding during each year
(2,295,788 shares in 1995 and 1994).
Presentation of financial statements:
Except for the balance sheet as of May 31, 1995, the finan-
cial information furnished herein has not been audited by
independent accountants; it reflects, however, all adjust-
ments (consisting principally of normal, recurring accruals)
which, in the opinion of management, are necessary for a
fair presentation of financial position and results of
operations and cash flows for the dates and periods noted.
2. Due from officer/director:
There are no formal repayment terms and the advances bear
interest at the prime rate (8.75% at November 30, 1995).
Interest income relating to these advances was $31,607 and
$31,794 for the six months ended November 30, 1995 and 1994,
respectively.
3. Due to affiliate:
There are no formal repayment terms and the advance bears
interest at the prime rate (8.75% at November 30, 1995).
Interest expense relating to these advances was $244 and
$203 for the six months ended November 30, 1995 and 1994,
respectively.
4. Related party transactions:
Management and consulting fees are provided for services
rendered by an officer/shareholder/director and firms deemed
to be related parties of the Company as compensation for
services to maintain the corporate books and records,
investigate business opportunities for the Company, and to
reimburse for expenses incurred in connection therewith.
Management and consulting fees charged to operations were
$30,000 and $15,000 for the six months ended November 30,
1995 and 1994, respectively.
5. Distribution on common stock:
The board of directors declared a partial liquidating dis-
tribution of $1 per common share to all shareholders of
record as of July 27, 1990.
As of November 30, 1995, $106,696 of the distribution has
not been claimed by the recipient shareholders.
6. Income taxes:
Effective June 1, 1993, the Company adopted SFAS No. 109,
"Accounting for Income Taxes." SFAS No. 109 requires a
change from the deferred to an asset/liability method of
computing deferred income taxes. This change did not have a
material effect on the Company's financial position or
results of operations.
The Company utilized a net operating loss carry forward of
approximately $14,000, resulting in a tax benefit of
approximately $6,800 in 1994.
The Company has available at November 30, 1995, unused
operating loss carry forwards of approximately $14,000 and
$30,300 which may be used against future Federal and state
taxable income, respectively, expiring in 2007. The
deferred tax asset and 100% valuation allowance related to
these carry forwards are not material.
The Company is classified as a personal holding company for
each year presented and is subject to a Federal tax on its
undistributed earnings, in addition to any other income
taxes payable. The personal holding company tax rates were
39.6% for the three months ended November 30, 1995 and 28%
for all previous years. The personal holding company tax
accounts for substantially all of the difference between the
actual tax benefit for 1994 and the tax benefit computed by
applying the statutory rate of 15% attributable to the
Company.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
_________________________________________________
The following discussion addresses the financial
condition and results of operations of the Company as of
November 30, 1995, and for the quarter and six months then ended
compared with the same periods in the prior year. This
discussion should be read in conjunction with the Management's
Discussion and Analysis Section included in the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1995 to
which the reader is directed for additional information.
During the second quarter and six months ended
November 30, 1995, the Company remained non-operating with
substantially all its assets consisting of a loan receivable from
the Company's president and majority shareholder. The Company's
officers are seeking to find a suitable candidate for merger or
acquisition.
Interest income decreased by $1,110 and $187 for the
second quarter and six months, respectively, compared with the
same periods in the prior year due to lower interest rates.
General and administrative expenses increased by $6,252 and
$11,602 for the second quarter and six months of this year,
respectively, compared with the same periods in the prior year.
The Company recorded a net gain of $30 and a net loss of $558 for
the second quarter and six months of this year, respectively,
compared with net income of $7,392 and $11,231 for the same
periods in the prior year.
PART 2. OTHER INFORMATION
__________________________
Item 6. Exhibits and Reports on Form 8-K.
________________________________
(a) Exhibits: None
(b) No reports on Form 8-K were filed during the quar-
ter.
SIGNATURES
__________
Pursuant to the requirements of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
P.H.C., Inc.
Dated: January 11, 1996 By:/s/Albert M. Zlotnick
______________________________
Albert M. Zlotnick
President
Chairman of the Board
Chief Financial Officer
and Chief Executive
Officer
<PAGE>
P.H.C., INC.
SIX MONTHS ENDED NOVEMBER 30, 1995
Appendix A to Item 601(c) of Regulations S-K
(Article 5 of Regulation S-X
Commercial and Industrial Companies)
<TABLE>
<CAPTION>
Item Number: Item Description:
____________ _________________
<S> <C> <C>
5-02(1) Cash and cash items 674
5-02(2) Marketable securities
5-02(3)(a)(1) Notes and accounts receivable -
trade
5-02(4) Allowances for doubtful accounts
5-02(6) Inventory
5-02(9) Total current assets 757
5-02(13) Property, plant and equipment
5-02(14) Accumulated depreciation
5-02(18) Total assets 840,957
5-02(21) Total current liabilities 8,205
5-02(22) Bonds, mortgages and similar debt
5-02(28) Preferred stock - mandatory
redemption
5-02(29) Preferred stock - no mandatory
redemption
5-02(30) Common stock 229,578
5-02(31) Other stockholders' equity 490,973
5-02(32) Total liabilities and
stockholders' equity 840,957
5-03(b)1(a) Net sales of tangible products
5-03(b)1 Total revenues 31,607
5-03(b)2(a) Cost of tangible goods sold
5-03(b)2 Total costs and expenses applicable
to sales and revenues
5-03(b)3 Other costs and expenses 32,165
5-03(b)5 Provision for doubtful accounts
and notes
5-03(b)(8) Interest and amortization of
debt discount
5-03(b)(10) Income before taxes and other items (558)
5-03(b)(11) Income tax expense
5-03(b)(14) Income/loss continuing operations (558)
5-03(b)(15) Discontinued operations
5-03(b)(17) Extraordinary items
5-03(b)(18) Cumulative effect - changes in
accounting principles
5-03(b)(19) Net income or loss (558)
5-03(b)(20) Earnings per share - primary 0.0
5-03(b)(20) Earnings per share - fully diluted
</TABLE>
