U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A-2
(Mark
One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED December 31, 1996.
|_| TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________
TO ___________
Commission file number 0-23524
PHC, INC.
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2601571
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Lake Street, Suite 102, Peabody MA 01960
Address of principal executive offices) (Zip Code)
508-536-2777
(Issuer's telephone number)
(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 Exchange Act during the past 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 _____
No__X___ In a no action letter, the U. S. Securities and Exchange Commission
indicated that the company's failure to file a report on Form 8-K in connection
with its acquisition of Behavioral Stress Centers, Inc. in November 1, 1996 will
not preclude stockholders from selling under Rule 144.
Applicable only to corporate issuers
Number of shares outstanding of each class of common equity, as of April 30,
1997:
Class A Common Stock 2,578,052
Class B Common Stock 790,628
Class C Common Stock 199,816
Transitional Small Business Disclosure Format
(Check one):
Yes No X
<PAGE>
The Financial Statements as orginally filed have been adjusted to properly
account for warrants issued in connection with financing and services rendered.
<PAGE>
PART I. FINANCIAL INFORMATION PHC INC. AND SUBSIDIARIES
Item 1 Financial Statements CONSOLIDATED BALANCE SHEETS
Dec. 31 June 30
1996 1996
ASSETS (Unaudited)
Current assets:
Cash........................................... 290,253 $293,515
Accounts receivable, net of allowance
for bad debts of 1,517,586 at Dec. 31,
1996 and 1,492,983 at June 30, 1996........ 10,529,186 8,866,065
Prepaid expenses............................ 698,279 259,893
Other receivables and advances.............. 2,806,155 66,513
Deferred Income Tax Asset................... 515,300 515,300
---------- ----------
Total current assets...................... 14,839,173 10,001,286
Accounts Receivable, Non Current............... 740,000 740,000
Loan Receivable................................ 112,805 113,805
Property and equipment, net.................... 7,926,515 7,884,063
Deferred income taxes.......................... 154,700 154,700
Deferred financing costs, net of
amortization................................... 837,931 702,948
Goodwill, net of accumulated amortization...... 905,872 709,573
Other assets................................... 639,081 454,160
Net assets of discontinued operation........... 1,394 56,682
---------- ----------
Total.......................................... 26,157,471 20,817,217
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................. 3,996,476 3,127,052
Notes payable--related parties............... 51,600 56,600
Current maturities of long term debt......... 1,104,875 403,894
Current portion of obligations under capital
leases....................................... 113,374 88,052
Accrued and withheld taxes................... 49,048 -0-
Accrued payroll, payroll taxes and
benefits..................................... 555,790 715,515
Accrued expenses and other liabilities....... 421,769 738,784
Deferred revenue............................. --- ---
---------- ----------
Total Current liabilities................. 6,292,932 5,129,897
---------- ----------
Long-term debt................................. 8,427,592 7,754,262
Obligations under capita1 lease................ 1,593,148 1,468,475
Notes payable related parties.................. 31,596 47,394
7% Convertible Debentures (3,125,000 les
discount 546,875).............................. 2,578,125 ----
---------- ----------
Total noncurrent liabilities................. 12,630,461 9,270,131
---------- ----------
Total liabilities............................ 18,923,393 14,400,028
----------- ----------
Stockholders' Equity:
Preferred stock, $.01 par value; 1,000,000
shares authorized, none issued................ --- ----
Class A common stock, $.01 value; 10,000,000
shares authorized, 2,493,552 and 2,293,568
issued December and June 1996................. 24,936 22,936
Class B common stock, $.01 par value; 2,000,000
shares authorized, 790,628 and 812,127
shares issued Dec. and June, 1996, convertible
into one share of Class A common stock........ 7,906 8,122
Class C common stock, $.01 par value; 200,000
shares authorized same as above and 199,816
shares issued December and June, 1996.......... 1,998 1,998
Additional paid-in capital..................... 8,889,408 8,078,383
Notes receivable related to purchase of 31,000
shares of Class A common stock................. (63,266) (63,928)
Accumulated Deficit............................ (1,626,904) (1,630,322)
---------- ----------
Total Stockholders' Equity.................... 7,234,078 6,417,189
---------- ----------
Total......................................... 26,157,471 $20,817,217
---------- ----------
See Notes to Consolidated Financial Statements
<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended
December 31 December 31
1996 1995 1996 1995
Revenues:
Patient Care, net .............. $6,472,204 $4,875,755 12,257,060 $9,368,635
Management Fees................. 270,731 64,688 403,935 101,245
---------- ---------- --------- ----------
Total revenue............... 6,742,935 4,940,443 12,660,995 9,469,880
---------- ---------- ---------- ----------
Operating expenses:
Patient care expenses........... 3,368,222 3,015,538 6,425,116 5,616,081
Administrative expenses......... 3,022,738 1,971,316 5,492,182 3,622,866
Contract expenses............... 70,005 30,365 139,898 62,002
---------- ---------- ---------- ----------
Total operating expenses... 6,460,965 5,017,219 12,057,196 9,300,949
---------- ---------- --------- ----------
Income (loss) from operations..... 281,970 (76,776) 603,799 168,931
---------- ---------- --------- ----------
Interest income................. 30,681 3,799 33,331 6,562
Startup Cost Nursing Facility... --- (128,313) --- (128,313)
Other income (expense).......... 129,475 45,716 210,939 95,462
Finance Cost.................... (120,000) --- (120,000) --
Interest expense................ (464,321) (221,726) (759,665) (369,724)
Gain (loss) from operations held
for sale...................... 37,202 18,650 36,478 17,683
---------- ---------- ---------- ----------
Total other income (expense). (386,963) (281,874) (598,917) (378,330)
---------- ---------- --------- ----------
Income (loss) before Provision for
Taxes.............................. (104,993) (358,650) 4,882 (209,399)
Provision for Income Taxes......... (42,669) (54,378) 1.464 ---
---------- ---------- ---------- ----------
NET INCOME (LOSS)................ $(62,324) $(304,272) $ 3,418 $ (209,399)
---------- ---------- ---------- ----------
Net Income (Loss) per share........ (.02) (.13) --- (.09)
Weighted average number
of shares outstanding............ 3,183,908 2,433,588 3,175,775 2,419,246
See Notes to Consolidated Financial Statements
<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended
December 31
1996 1995
Cash flows from operating activities:
Net income............................ $ 3,418 $(209,399)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization......... 292,385 216,668
Increase in accounts receivable....... (2,374,540) (1,564,093)
Compensaton Stock Options & stock
warrants issued for obligations....... 125,000 ---
Increase in prepaid expenses and other
current assets........................ (438,386) (78,576)
Decrease in other assets.............. 133,804 40,102
Decrease in net assets of operation
held for sale......................... 55,288 107,371
Increase in accounts payable......... 524,622 740,269
Increase in accrued and withheld
taxes................................. 16,736 16,224
Increase (decrease) in accrued expenses
and other liabilities................ (374,026) 134,130
----------- ----------
Net cash used in operating
activities............................... (2,035,699) (597,304)
----------- ----------
Cash flows from investing activities:
Acquisition of property and
equipment.............................. (293,866) (1,125,862)
Costs related to business
acquisition........................... (2,718,201) (575,000)
----------- ---------
Net cash used in investing activities... (3,012,067) (1,700,862)
----------- ----------
Cash flows from financing activities,
Issuance of Common Stock.............. 688,471 ---
Net debt activity..................... 1,777,908 1,771,473
Convertible debt...................... 2,578,125 ---
----------- ---------
Net cash provided by financing
activities............................... 5,044,504 1,771,473
----------- ----------
NET INCREASE (DECREASE) IN CASH........... (3,262) (526,693)
Beginning cash balance.................... 293,515 586,738
----------- ----------
ENDING CASH BALANCE....................... 290,253 $60,045
----------- ----------
See Notes to Consolidated Financial Statements
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
PHC, Inc.
Registrant
Date: June 10, 1997 /s/ Bruce A. Shear
Bruce A. Shear
President
Chief Executive Officer
Date: June 10, 1997 /s/ Paula C. Wurts
Paula C. Wurts
Controller
Assistant Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
This schedule contains financial information extracted from the
consolidated balance sheet and the consolidated statement of income filed as
part of the report on Form 10-QSB/A-2 is qualified in its entirety by reference
to such report on Form 10-QSB/A-2.
</LEGEND>
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-1-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1.000
<CASH> 290,253
<SECURITIES> 0
<RECEIVABLES> 12,046,772
<ALLOWANCES> 1,517,586
<INVENTORY> 0
<CURRENT-ASSETS> 14,839,173
<PP&E> 9,621,268
<DEPRECIATION> 1,694,753
<TOTAL-ASSETS> 26,157,471
<CURRENT-LIABILITIES> 6,292,932
<BONDS> 9,326,090
0
0
<COMMON> 34,840
<OTHER-SE> 7,199,238
<TOTAL-LIABILITY-AND-EQUITY> 26,157,471
<SALES> 0
<TOTAL-REVENUES> 12,660,995
<CGS> 0
<TOTAL-COSTS> 12,057,196
<OTHER-EXPENSES> 879,665
<LOSS-PROVISION> 549,880
<INTEREST-EXPENSE> 759,665
<INCOME-PRETAX> 4,882
<INCOME-TAX> 1,464
<INCOME-CONTINUING> 3,418
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,418
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
