SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission File
May 31, 1996 No. 0-8559
P.H.C., INC.
_________________________________________________________________
(Exact name of registrant as specified in its charter)
Minnesota 41-0843021
________________________________ ___________________________
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
301 City Avenue
Bala Cynwyd, Pennsylvania 19004
_________________________________________ _________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: (610) 667-8225
_______________
Securities registered pursuant to Section 12(g) of the
Act:
Common Stock - $.10 par value
_______________________________
(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that 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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this form 10-K or any amendment to this
Form 10-K.
The aggregate market value of the voting stock held by
non-affiliates of the registrant, computed on the basis of the
average bid price of such stock as of May 31, 1994, the last date
on which price information was available from the National
Quotation Bureau, Inc., was $130,588.
As of August 15, 1996, 2,295,788 shares of the registrant's
common stock were outstanding.
PART I
______
Item 1. Business
_______ _________
P.H.C., Inc. (the "Company") was incorporated in April
1961, under the laws of the State of Minnesota. The original
name of the Company was "Profile Extrusions, Inc.". The name was
changed to P.H.C., Inc. in March 1968. In January 1985, the
Company was the surviving entity in a merger with a 90% owned
subsidiary, Southern Diversified Industries, Inc., a Florida
corporation, which had been inactive since 1982.
At the present time, the Company has no business or
operations. For all intents and purposes the Company has been
out of business on its own account since August 1982. The
Company owns no real or personal property.
At the present time the Company has no employees.
Item 2. Properties.
_______ ___________
At the present time, the Company shares space at 301
City Avenue, Bala Cynwyd, Pennsylvania 19004, with Davic
Financial Services, a sole proprietorship of Albert M. Zlotnick,
president of the Company.
Item 3. Legal Proceedings.
_______ __________________
The Company is not a party to any material legal
proceedings.
Item 4. Submission of Matters to Vote of Security Holders.
_______ __________________________________________________
None.
PART II
_______
Item 5. Market for Registrant's Common Stock and Related
Security Holder Matters.
_______ _________________________________________________
(a) Price Range of Common Stock.
____________________________
Due to the infrequent and limited number of shares of
common stock traded, the common stock has been unpriced during
the last two fiscal years. The last available market price data
for the common stock was on May 31, 1994 as follows: high bid:
1/8; low bid: 1/8, as reported by the National Quotation Bureau,
Inc. Such quotations represent prices in the over-the-counter
market between dealers in securities, and do not include retail
mark-up, mark-down or commission, and do not necessarily
represent actual transactions, and cannot be considered
indicative of any reliable market value for the common stock.
(b) Approximate Number of Security Holders.
_______________________________________
Approximate Number of Record Holders
Title of Class (as of August 15, 1996)
______________ _____________________________________
Common Stock 700
$.10 Par Value
(c) Dividends.
__________
The Company did not pay a cash dividend on its common
stock during its last two fiscal years. The payment of any
future dividends is within the discretion of the Company's Board
of Directors and will depend, among other things, on the
Company's earnings and capital requirements. At the present
time, the Company does not anticipate the payment of any cash
dividends in the next fiscal year.
Item 6. Selected Financial Data.
_______ ________________________
The following selected financial data for the years
ended May 31, 1993 and 1992 have been derived from financial
statements audited by Simonson, Lipschutz & Fogel, P.C., the
Company's former independent certified public accountants.
The following selected financial data for the years
ended May 31, 1996, 1995 and 1994 have been derived from
financial statements audited by BDO Seidman, LLP, the Company's
current independent certified public accountants. The audited
financial statements at May 31, 1995 and 1996 and for each of
the three years in the period ended May 31, 1996 with the
report thereon of BDO Seidman, LLP are included elsewhere
herein and should be read in conjunction with these data.
<PAGE>
<TABLE>
<CAPTION>
P.H.C. INC.
SUMMARY OF SELECTED FINANCIAL DATA
YEARS ENDED MAY 31, 1992 TO 1996
1996 1995 1994 1993 1992
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0 $ 0
Net income (16,018) (147) 13,916 6,074 (34)
(loss)
Net income (.01) 0 .01 0 0
(loss)
per common
share
Dividends 0 0 0 0 0
per common
share
Total $838,286 $847,246 $848,186 $842,030 $825,853
assets
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
__________________________________________________
During the year ended May 31, 1996 the Company remained
non-operating with substantially all its assets consisting of a
loan receivable from the Company's president and majority
shareholder. This loan was repaid in full on February 28, 1996.
The Company's officers are seeking to find a suitable candidate
for merger or acquisition.
Interest income decreased by $11,437 for the year ended
May 31, 1996 as compared with the prior year due to repayment of
the loan from the Company's president. General and
administrative expenses increased by $4,451 for the year ended
May 31, 1996 compared with the prior year. The Company had a net
loss of $16,018 for fiscal 1996, compared with a net loss of $147
for fiscal 1995, resulting from the decrease in interest income
and increased general and administrative expenses.
For the fiscal year ended May 31, 1995, the Company had
a net loss of $147 compared with net income of $13,916 for the
prior year, resulting from increased general and administrative
expenses.
Capital Resources and Liquidity.
________________________________
The Company has had no business operations since 1982
as described above in Item I and consequently does not require
significant liquidity. Management believes that the Company has
sufficient liquidity and resources to meet its anticipated
expenses in the ordinary course.
Effects of Inflation.
_____________________
Inflation does not affect the Company except to the
extent that it may affect interest rates and interest income.
Item 8. Financial Statements and Supplementary Data.
_______ ____________________________________________
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
P.H.C., Inc.
Bala Cynwyd, Pennsylvania
We have audited the accompanying balance sheets of P.H.C., Inc.
as of May 31, 1996 and 1995, and the related statements of
operations, stockholders' equity and cash flows for each of
the three years in the period ended May 31, 1996. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of P.H.C., Inc. as of May 31, 1996 and 1995, and the results of
its operations and its cash flows for each of the three years in
the period ended May 31, 1996 in conformity with generally
accepted accounting principles.
/s/ BDO SEIDMAN, LLP
_____________________
BDO SEIDMAN, LLP
August 13, 1996
<PAGE>
<TABLE>
<CAPTION>
P.H.C., INC.
BALANCE SHEETS
May 31, 1996 1995
_________________________ _____ _____
<S> <C> <C>
Assets
Cash and cash equivalents $838,203 $ 674
Prepaid income taxes 83 83
Due from officer/director (Note 2) - 846,489
_________ _________
$838,286 $847,246
Liabilities and Stockholders' Equity
Liabilities
Due to affiliates (Note 4) $5,505 $5,505
Due to officer/director (Note 3) 13,995 -
Distribution payable (Note 6) 106,696 106,696
Accrued expenses 6,999 13,936
_______ ________
Total liabilities 133,195 126,137
Stockholders' equity (Note 6)
Common stock, $.10 per value
Authorized 5,000,000 shares
Outstanding 2,295,788 shares 229,578 229,578
Additional paid-in capital 520,472 520,472
Deficit (44,959) (28,941)
_________ _________
Total stockholders' equity 705,091 721,109
_________ _________
$838,286 $847,246
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
P.H.C., INC.
STATEMENTS OF OPERATIONS
Year ended May 31, 1996 1995 1994
_____________________ _____ _____ _____
<S> <C> <C> <C>
Revenue, interest income (Note 2) $54,437 $65,874 $51,234
General and administrative expenses
(Notes 4 and 5) 70,455 66,004 37,318
________ _______ _______
(Loss) income before income taxes (16,018) (130) 13,916
________ _______ _______
Income taxes (Note 7)
Current year - 17 -
Prior year refund - - -
________ _______ _______
Total income taxes - 17 -
________ _______ _______
Net (loss) income $(16,018) $ (147) $13,916
______________________________________________________________________________
(Loss) earnings per share $ (.01) $ - $ .01
______________________________________________________________________________
Weighted average number
of shares outstanding 2,295,788 2,295,788 2,295,788
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
P.H.C., INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Additional Retained
Common Paid-In Earnings
Stock Capital (Deficit)
_________ __________ _________
<S> <C> <C> <C>
Balance, May 31, 1993 $229,578 $520,472 $(42,710)
Net income - - 13,916
_________ _________ _________
Balance, May 31, 1994 229,578 520,472 (28,794)
Net (loss) - - (147)
_________ _________ _________
Balance, May 31, 1995 229,578 520,472 (28,941)
Net (loss) - - (16,018)
_________ _________ _________
Balance, May 31, 1996 $229,578 $520,472 $(44,959)
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
P.H.C., INC.
STATEMENTS OF CASH FLOWS
Year ended May 31, 1996 1995 1994
________________________ _____ _____ _____
<S> <C> <C> <C>
Cash flows from operating activities
Net (loss) income $(16,018) $(147) $13,916
Adjustments to reconcile net (loss)
income to net cash (used in)
provided by operating activities
Increase (decrease) in
Accrued expenses (6,937) (898) (7,560)
________ ________ _______
Net cash (used in) provided by
operating activities (22,955) (1,045) 6,356
________ ________ _______
Cash flows from investing activities
Repayment of advances from
officer/director 907,696 67,235 42,625
Advances to officer/director (47,212) (65,874) (51,230)
________ ________ _______
Net cash provided by (used in)
investing activities 860,484 1,361 (8,605)
________ ________ _______
Cash flows from financing activities
Advances to/from affiliate, net - 505 -
Distributions paid - (400) (200)
________ ________ _______
Net cash provided by (used in)
financing activities - 105 (200)
________ ________ _______
Net increase (decrease) in cash
and cash equivalents 837,529 421 (2,449)
Cash and cash equivalents,
beginning of year 674 253 2,702
________ ________ _______
Cash and cash equivalents, end of year $838,203 $674 $253
________________________________________________________________________________________
Supplemental cash flow information
Cash paid during the year for
income taxes $ - $ 17 $ -
</TABLE>
See accompanying notes to financial statements.
<PAGE>
P.H.C., INC.
NOTES TO FINANCIAL STATEMENTS
1. Business Business Activity
Activity and
Summary of The Company presently conducts no business;
Significant the majority of its income consists of
Accounting interest income.
Policies
Cash Equivalents
For purposes of the 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 based on the
weighted averaged number of common shares
outstanding during each year (2,295,788
shares in 1996, 1995 and 1994).
Comparative Financial Statements
Certain 1995 amounts have been reclassified
to conform to the 1996 presentation.
Use of Estimates
The preparation of financial statements in
conformity with generally accepted
accounting principles requires management to
make estimates and assumptions that affect
the reported amounts of assets and
liabilities and disclosure of contingent
assets and liabilities at the date of the
financial statements and the reported
amounts of revenues and expenses during the
reporting period. Actual results could
differ from those estimates.
2. Due from On February 28, 1996, these advances were
Officer/ paid in full. The advances were unsecured
Director and bore interest at the prime rate.
Interest income relating to these advances
was $46,207, $65,874 and $51,230 for the
years ended May 31, 1996, 1995 and 1994,
respectively.
3. Due to There are no formal repayment terms and the
Officer/ advances bear interest at the prime rate
Director (8.25% at May 31, 1996). Interest on these
advances is not material at May 31, 1996.
4. Due to There are no formal repayment terms and the
Affiliates advances bear interest at the prime rate
(8.25% at May 31, 1996). Interest expense
relating to these advances was $455, $427
and $440 for the years ended May 31, 1996,
1995 and 1994, respectively.
5. Related In addition to the amounts described in
Party Notes 2 and 3, consulting fees of $60,000,
Transactions $56,000 and $30,000 for the years ended
May 31, 1996, 1995 and 1994, respectively,
were charged to operations for services
rendered by the officer/director (who is
deemed to be a related party of the
Company). The officer/director seeks out
and evaluates possible merger or acquisition
candidates for the Company. These
consulting fees are included in general and
administrative expenses in the accompanying
statements of operations.
6. Distribution The Board of Directors declared a partial
on Common liquidating distribution of $1 per common
Stock share to all stockholders of record as of
July 27, 1990.
The distribution, which aggregated
$2,295,788, was accounted for as follows:
Distribution of retained
earnings $713,302
Return of investment
(charged to additional
paid-in capital) 1,582,486
__________
$2,295,788
As of May 31, 1996, $106,696 of the
distribution had not been claimed by certain
stockholders.
7. Income Effective June 1, 1993, the Company adopted
Taxes 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 has available at May 31, 1996,
unused operating loss carryforwards of
approximately $30,000 and $46,000 which may
be used against future Federal and state
taxable income, respectively, expiring in
2010. The deferred tax asset and 100%
valuation allowance related to these
carryforwards 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
1996 and 1995 and 28% for all previous
years.
Item 9. Disagreements on Accounting and Financial
Disclosure.
_______ _________________________________________
None.
PART III
Item 10. Directors and Executive Officers of Registrant.
________ _______________________________________________
Directors and Executive Officers.
_________________________________
Name Age Position Since
_____ ___ _________ _____
Albert M. Zlotnick 72 Chairman of the Board, 1967
President, Chief
Executive Officer,
Chief Financial Officer,
Secretary and Treasurer
Robert I. Zlotnick 34 Assistant 1993
Secretary
All Directors hold office for the balance of the
present term and until their successors are elected and
qualified.
Mr. Robert Zlotnick is the son of Mr. Albert Zlotnick.
Business Experience.
____________________
ALBERT M. ZLOTNICK. Mr. Zlotnick has been a private
investor and financial consultant for a period in excess of five
years. Since 1987, he has been General Partner of Asset Ventures
I, a Pennsylvania limited partnership which is the largest
shareholder of Beverly Hills Bancorp and McIntosh Corporation.
Mr. Zlotnick is Chairman of the Board of Beverly Hills Bancorp.,
Bala Cynwyd Corporation, Electronic Data Controls, Inc., Robin
Industries, Inc. and Convention Centers, Inc.
ROBERT I. ZLOTNICK. Mr. Robert Zlotnick holds a
Master's Degree in Psychology from Temple University and has
worked as a Counselor for the National Council on Alcohol and
Drug Abuse for the past several years. Prior thereto he worked
with Mr. Albert Zlotnick in his investment and financial
consulting business.
Item 11. Executive Compensation.
________ _______________________
No Executive Officer received in excess of $100,000
cash compensation during the fiscal year ended May 31, 1996, and
all Executive Officers as a group received a total of $60,000
cash compensation.
The following information is furnished for the
Company's Chief Executive Officer. See Note 5 to Financial
Statements.
Summary Compensation Table
Name and Principal Fiscal Years Total
Position ended May 31, Compensation
____________________ ______________ _____________
Albert M. Zlotnick 1996 $ 60,000
Chief Executive officer, 1995 $ 56,000
Chairman and President 1994 $ 30,000
The Company does not provide any non-cash remuneration
to its Executive Officers and Directors. No pension plan or
other retirement benefit for the benefit of Executive Officers or
Directors is funded by Company. The Company pays no renumeration
to Directors for service as such. The Company has no options,
warrants or rights plans.
Item 12. Security Ownership of Certain Beneficial
Owners and Management.
________ ________________________________________
(a) Security Ownership of Certain Beneficial Owners.
________________________________________________
The following table sets forth, as of August 15, 1996
information with respect to common stock ownership of each person
known by the Company to own beneficially more than 5% of the
shares of the Company's common stock:
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
___________________ ____________________ __________
Albert M. Zlotnick 1,251,081 54.5%
301 City Avenue
Bala Cynwyd, PA 19004
Clayson, Inc. 250,000 10.9%
c/o Barry D. Rose
50 Bartor Rd.
Weston, Ontario Canada M9M2G5
Osterloh & Durham Insurance 150,000 6.5%
Brokers of North America, Inc.
P.O. Box 8400
Van Nuys, California 91406
(b) Security Ownership of Management.
_________________________________
The following table sets forth, as of August 15, 1996,
information with respect to common stock ownership of each
director, and of all directors and officers as a group:
Name of Address of Amount Percent of
Beneficial Owner Beneficially Owned Class
____________________ ___________________ ___________
Albert M. Zlotnick 1,251,081 54.5%
All Executive Officers 1,251,081 54.5%
and Directors as a
Group (2 persons)
Item 13. Certain Relationships and Related Transactions.
________ _______________________________________________
Beginning in fiscal 1991, the Company made unsecured
loans to Mr. Zlotnick, president of the Company, which accrued
interest from the date of advance at the moving prime rate on the
unpaid principal balance. These loans were repaid in full on
February 28, 1996. See Note 2 to Notes to Financial Statements.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
________ _____________________________________________
(a) (1) Financial Statements.
_____________________
Independent Auditors' Report
Balance Sheets -- May 31, 1996 and 1995
Statements of Operations -- Years Ended
May 31, 1996, 1995 and 1994
Statements of Stockholders' Equity -- Years Ended
May 31, 1996, 1995 and 1994
Statements of Cash Flows -- Years Ended
May 31, 1996, 1995 and 1994
Notes to Financial Statements
All schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable and therefore have been omitted.
(b) Reports on Form 8-K.
____________________
None.
(c) Exhibits.
_________
Exhibit No. Description of Document
___________ _______________________
* 3-1 Articles of Incorporation
* 3-2 By-Laws
_____________________________
* Incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended May 31, 1981.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
cause this report to be signed on its behalf by the undersigned
thereunto duly authorized.
P.H.C., Inc.
August 28, 1996 By: /s/ Albert M. Zlotnick
__________________________________
Albert M. Zlotnick, President
Chairman of the Board
Chief Executive Officer
Chief Financial Officer and
Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange
Act of 1934, this Report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
/s/ Albert M. Zlotnick President August 28, 1996
__________________________ Chairman of
Albert M. Zlotnick the Board
and Director
/s/ Robert I. Zlotnick Director August 28, 1996
__________________________
Robert I. Zlotnick
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
P.H.C., INC.
YEAR ENDED MAY 31, 1996
Appendix A to Item 601(c) of Regulation S-K
(Article 5 of Regulation S-X
Commercial and Industrial Companies)
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 838,203
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 838,203
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 838,286
<CURRENT-LIABILITIES> 133,195
<BONDS> 0
0
0
<COMMON> 229,578
<OTHER-SE> 520,472
<TOTAL-LIABILITY-AND-EQUITY> 838,286
<SALES> 0
<TOTAL-REVENUES> 54,437
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 70,455
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,018)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,018)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,018)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
