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 August 31, 1996 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
<PAGE>
Part 1. Financial Information
_____________________
Item 1. Financial Statements
P.H.C., INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, May 31,
1996 1996
____________ _________
(Unaudited)
<S> <C> <C>
ASSETS
Cash $844,595 $838,203
Prepaid income taxes 83 83
________ _________
$844,678 $838,286
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Due to affiliate (Note 3) $5,505 $5,505
Due to officer/director (Note 2) 28,995 13,995
Distribution payable (Note 5) 106,696 106,696
Accrued expenses 7,577 6,999
________ _______
148,773 133,195
________ _______
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 (54,146) (44,959)
_________ ________
695,905 705,091
_________ ________
$844,678 $838,286
========= ========
</TABLE>
See notes to financial statements.
<PAGE>
P.H.C., INC.
STATEMENT OF OPERATIONS AND DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
August 31,
__________________
1996 1995
________ _________
<S> <C> <C>
Revenue, interest income
(Note 2) $ 8,847 $ 16,107
General and administrative
expenses (Notes 3 and 4) 18,034 16,695
________ _________
Income (loss) before income
taxes (9,187) (588)
Income taxes (Note 6) - -
________ _________
Net income (loss) (9,187) (588)
Deficit, beginning (44,959) (28,941)
________ _________
Deficit, ending ($54,146) ($29,529)
======== =========
Earnings per share $0 $0
======== =========
Weighted average number of
shares outstanding 2,295,788 2,295,788
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
P.H.C., INC.
STATEMENT OF CASH FLOWS
Increase (decrease) in cash
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
August 31,
__________________
1996 1995
______ ______
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (9,187) $ (588)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
(Increase)Decrease in accrued
expenses (579) (5,551)
________ ________
Net cash provided by (used in)
operating activities (8,608) (6,139)
________ ________
Cash flows from investing activities:
Net cash used in investing
activities, advances to (from) officer/
director, net 15,000 6,139
________ ________
Net increase (decrease) in cash 6,392 0
Cash, beginning of period 838,203 674
________ ________
Cash, end of period $844,595 $ 674
======== ========
</TABLE>
See notes to financial statements.
<PAGE>
P.H.C., INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED AUGUST 31, 1996
(Unaudited)
1. Business activity and summary of significant accounting
policies:
Business activity:
The company presently conducts no business; its only income
consists of interest income.
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 1996 and 1995).
Presentation of financial statements:
Except for the balance sheet as of May 31, 1996, 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 to officer/director:
There are no formal repayment terms and the advance bears
interest at the prime rate (8.25% at August 31, 1996).
Interest expense relating to these advances was not material
for the three months ended August 31, 1996 and 1995.
3. Due to affiliate:
There are no formal repayment terms and the advances bear
interest at the prime rate (8.25% at August 31, 1996).
Interest expense relating to these advances was $114 and
$124 for the three months ended August 31, 1996 and 1995,
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
$15,000 and $15,000 for the three months ended August 31,
1996 and 1995, 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 August 31, 1996, $106,696 of the distribution has not
been claimed by certain 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 has available at August 31, 1996, unused
operating loss carry forwards 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 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 1996 and 1995 and 28% for all previous years.
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 August
31, 1996, and for the quarter then ended compared with the same
period 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, 1996 to which the reader is directed
for additional information.
During the first quarter ended August 31, 1996, the
Company remained non-operating with substantially all its assets
consisting of cash equivalents. The Company's officers are
seeking to find a suitable candidate for merger or acquisition.
Interest income decreased by $7,260 for the first
quarter compared with the same period in the prior year due to
lower interest rates and the repayment of the loan from the
Company's president. General and administrative expenses
increased by $1,339 for the first quarter of this year compared
with the same period in the prior year. The Company recorded a
net loss of $9,187 for the first quarter of this year compared
with a net loss of $588 for the same period in the prior year
resulting from the decrease in interest income and increased
general and administrative expenses.
PART 2. OTHER INFORMATION
__________________________
Item 6. Exhibits and Reports on Form 8-K.
________________________________
(a) Exhibits: Exhibit 27
(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: October 14, 1996 By:/s/Albert M. Zlotnick
______________________________
Albert M. Zlotnick
President
Chairman of the Board
Chief Financial Officer
and Chief Executive
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
P.H.C., INC.
THREE MONTHS ENDED AUGUST 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> 3-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> AUG-31-1996
<CASH> 844,595
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 844,595
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 844,595
<CURRENT-LIABILITIES> 148,773
<BONDS> 0
0
0
<COMMON> 229,578
<OTHER-SE> 520,472
<TOTAL-LIABILITY-AND-EQUITY> 844,905
<SALES> 0
<TOTAL-REVENUES> 8,847
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 18,034
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,187)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,187)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,187)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
