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 February 28, 1997 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>
February 28, May 31,
1997 1996
____________ _________
(Unaudited)
<S> <C> <C>
ASSETS
Cash $862,856 $838,203
Prepaid income taxes 83 83
________ _________
$862,939 $838,286
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Due to affiliate (Note 3) $5,505 $5,505
Due to officer/director (Note 2) 60,720 13,995
Distribution payable (Note 5) 106,696 106,696
Accrued expenses 7,404 6,999
________ _______
180,325 133,195
________ _______
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 (67,437) (44,959)
_________ ________
682,613 705,091
_________ ________
$862,938 $838,286
========= ========
</TABLE>
See notes to financial statements.
<PAGE>
P.H.C., INC.
STATEMENT OF OPERATIONS AND DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended Three months ended
__________________ ___________________
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
____________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Revenue, interest income
(Note 2) $ 27,108 $46,207 $ 9,792 $ 14,600
General and administrative
expenses (Notes 3 and 4) 49,586 48,877 $ 15,588 $ 16,712
________ ______ _______ _______
Income (loss) before income
taxes (22,478) (2,670) (5,796) (2,112)
Income taxes (Note 6) - - - -
________ _______ ________ _______
Net income (loss) (22,478) (2,670) (5,796) (2,112)
Deficit, beginning (44,959) (28,941) 61,641) (29,499)
________ ________ _______ _________
Deficit, ending ($67,437) ($31,611) ($67,437) ($31,611)
======== ========= ========= =========
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>
P.H.C., INC.
STATEMENT OF CASH FLOWS
Increase (decrease) in cash
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
_________________
February 28, February 29,
1997 1996
______ ______
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (22,478) $ (2,670)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Increase (Decrease) in accrued
expenses 406 (10,412)
________ ________
Net cash provided by (used in)
operating activities (22,072) (13,082)
________ ________
Cash flows from investing activities:
Net cash used in investing
activities, advances to (from) officer/
director, net 46,725 13,082
________ ________
Net increase (decrease) in cash 24,653 0
Cash, beginning of period 838,203 674
________ ________
Cash, end of period $862,856 $ 674
======== ========
</TABLE>
See notes to financial statements.
<PAGE>
P.H.C., INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED FEBRUARY 28, 1997
(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 1997 and 1996).
Presentation of financial statements:
Except for the balance sheet as of May 31, 1996, the financial information
furnished herein has not been audited by independent accountants; it
reflects, however, all adjustments (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 February 28, 1997). Interest expense relating to
these advances was not material for the nine months ended February 28, 1997
and February 29, 1996.
3. Due to affiliate:
There are no formal repayment terms and the advances bear interest at the
prime rate (8.25% at February 28, 1997). Interest expense relating to
these advances was $342 and $358 for the nine months ended February 28,
1997 and February 29, 1996, 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 $45,000 and $45,000 for the nine
months ended February 28, 1997 and February 29, 1996, respectively.
5. Distribution on common stock:
The board of directors declared a partial liquidating distribution of $1
per common share to all shareholders of record as of July 27, 1990.
As of February 28, 1997, $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 February 28, 1997, 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 1997, 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 February 28, 1997, and for the nine
months 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 nine months ended February 28, 1997, 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 $19,099 for the nine months ended
February 28, 1997 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 $709 for the nine months ended
February 28, 1997 compared with the same period in the prior year. The Company
recorded a net loss of $22,478 for the nine months ended February 28, 1997
compared with a net loss of $2,670 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 quarter.
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: April 15, 1997 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
<CIK> 0000225759
<NAME> PHC, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> FEB-28-1997
<CASH> 862,856
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 862,939
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 180,325
<BONDS> 0
0
0
<COMMON> 229,578
<OTHER-SE> 520,472
<TOTAL-LIABILITY-AND-EQUITY> 682,613
<SALES> 0
<TOTAL-REVENUES> 27,108
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 49,586
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 22,478
<INCOME-TAX> 0
<INCOME-CONTINUING> 22,478
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,478
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
