<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark
One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 1997
|_| 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 2,646,884
Class B Common Stock 731,348
Class C Common Stock 199,816
Transitional Small Business Disclosure Format
(Check one):
Yes No X
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - March 31, 1997 and June 30,
1996.
Condensed Consolidated Statements of Operations - Three months ended
March 31, 1997 and March 31, 1996; Nine months ended March 31,1997
and March 31, 1996.
Condensed Consolidated Statements of Cash Flows - Nine months ended
March 31, 1997 and March 31, 1996.
Notes to Condensed Consolidated Financial Statements - March 31,
1997.
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
PART I. FINANCIAL INFORMATION PHC Inc. and Subsidiaries
Item 1 Financial Statements CONSOLIDATED BALANCE SHEETS
March 31 June 30
1997 1996
ASSETS (Unaudited)
Current assets:
Cash............................................ $ 59,846 $ 293,515
Accounts receivable, net of allowance for
bad debts of 1,563,824 at March 31,
1997 and 1,492,983 at June 30 1996........... 12,352,515 8,866,065
Prepaid expenses............................. 567,996 259,893
Other receivables and advances............... 1,582,293 66,513
Deferred Income Tax Asset.................... 515,300 515,300
---------- -----------
Total current assets......................... 15,077,950 10,001,286
Accounts Receivable, Non Current................ 2,201.645 740,000
Loan Receivable................................. 126,305 113,805
Property and equipment, net..................... 7,857,904 7,884,063
Deferred income taxes........................... 154,700 154,700
Deferred financing costs, net of amorization.... 773,936 702,948
Goodwill, net of accumulated amortization....... 891,690 709,573
Other assets.................................... 972,783 454,160
Net assets of dicontinued operation............. --- 56,682
---------- -----------
Total Assets................................. 28,056,913 20,817,217
---------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................. 3,942,009 3,127,052
Notes payable--related parties............... 51,600 56,600
Current maturities of long term debt......... 1,892,220 403,894
Current portion of obligations under capital
leases....................................... 118,591 88,052
Accrued payroll, payroll taxes and benefits.. 712,201 715,515
Accrued expenses and other liabilities....... 513,682 738,784
---------- ---------
Total Current liabilities.................... 7,230,303 5,129,897
---------- ---------
Long-term debt.................................. 8,973,081 7,754,262
Obligations under capital lease................. 1,585,958 1,468,475
Notes payable related parties................... 23,696 47,394
7% Convertible Debentures (3,125,000 less 2,656,250 ---
discount 468,750)............................ ---------- ----------
Total noncurrent liabilities................. 13,238,985 9,270,131
---------- ----------
Total liabilities............................ 20,469,288 14,400,028
---------- -----------
Minority Interest in Consolidated Subsidiary.... 20 ---
---------- -----------
Stockholders' Equity:
Preferred stock, $.01 par value; 1,000,000
shares authorized, none issued............... --- ---
Class A common stock, $.01 value; 20,000,000
shares authorized, 2646,884 and 2,293,568
issued March 1997 and June 1996.............. 26,468 22,936
Less: Treasury Stock (8,656 shares at par).. (87) ---
---------- ----------
Class A common stock, 2,638,228 and 2,293,568
outstanding March 1997 and June 1996........... 26,381 22,936
Class B common stock, $.01 par value; 2,000,000
shares authorized, 731,348 and 812,127 shares
issued March 1997 and June, 1996, convertible
into one share of Class A common stock......... 7,314 8,122
Class C common stock, $.01 par value; 200,000
shares authorized same as above and 199,816s
shares issued March 1997 and June 1996......... 1,998 1,998
Additional paid-in capital....................... 9,039,565 8,078,383
Notes receivable related to purchase of 31,000
shares of Class A common stock................ --- (63,928)
Accumulated Deficit........................... (1,487,653) (1,630,322)
---------- -----------
Total Stockholders'Equity..................... 7,587,605 6,417,189
---------- -----------
Total Liabilities & Stockholders' Equity......... 28,056,913 20,817,217
----------- -----------
See Notes to Consolidated Financial Statements
<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended
March 31 March 31
1997 1996 1997 1996
Revenues:
Patient Care, net............ 7,215,386 6,567,335 19,472,446 15,935,970
Management Fees.............. 402,187 63,599 806,122 164,844
--------- --------- ----------- ----------
Total revenue........ 7,617,573 6,630,934 20,278,568 16,100,814
--------- --------- ----------- ----------
Operating expenses:
Patient care expenses........ 4,067,634 3,276,949 10,492,750 8,893,030
Administrative expenses...... 2,986,741 2,966,822 8,478,923 6,589,688
Contract expenses............ 92,200 31,671 232,098 93,673
--------- --------- ----------- ----------
Total operating
expenses.................. 7,146,575 6,275,442 19,203,771 15,576,391
--------- --------- ----------- ----------
Income from operations.......... 470,998 355,492 1,074,797 524,423
--------- --------- ----------- ----------
Interest income................. 73,457 4,225 106,788 10,787
Startup Cost Nursing Facility --- --- --- (128,313)
Other income.................... 122,005 46,282 337,944 141,744
Interest expense................ (558,561) (260,264) (1,318,226) (629,988)
Gain from operations
held for sale................. --- 1,136 36,478 18,819
--------- --------- ----------- ----------
Total other income(expense)... (363,099) (208,621) (837,016) (586,951)
--------- --------- ----------- ---------
Income (loss) before Provision
for Taxes..................... 107,899 146,871 237,781 (62,528)
Provision for Income Taxes...... 42,971 --- 95,112 ---
--------- --------- ----------- ----------
NET INCOME (LOSS)............... 64,928 146,871 142,669 (62,528
--------- --------- ----------- ----------
Net Income (Loss) per share..... .02 .05 .05 (.02)
Weighted average number of shares
outstanding..................... 3,354,940 2,783,505 3,170,222 2,539,800
See Notes to Consolidated Financial Statements
<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended
March 31 March 31
1997 1996
Cash flows from operating activities
Net income(loss)................................. 142,669 (62,528)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization.................... 456,215 352,231
Increase in accounts receivable.................. (3,553,085) (3,139,612)
Increase in prepaid expenses and other current
assets........................................... (308,103) (209,329)
(Increase) Decrease in other assets.............. 102,704 (31,971)
Decrease in net assets of operations held for
sale............................................. 56,682 107,094
Increase in accounts payable..................... 486,649 49,769
Increase in accrued and withheld taxes........... --- 13,910
Increase (decrease) in accrued expenses and
other liabilities................................ (174,508) 155,637
---------- ----------
Net cash used in operating activities............... (2,790,777) (2,764,799)
---------- ----------
Cash flows from investing activities
Acquisition of property and equipment............. (359,372) (1,530,567)
Costs related to business acquisition............. (945,116) (575,000)
Loan Receivable................................... (2,923,290) ---
---------- ----------
Net cash used in investing activities............... (4,227,778) (2,105,567
------------ ----------
Cash flows from financing activities
Issuance of Common Stock.......................... 1,027,854 2,274,501
Acquisition of Common Stock....................... (87) ---
Net debt activity................................. 3,100,869 2,091,679
Convertible debt.................................. 2,656,250 ---
---------- ----------
Net cash provided by financing activities........... 6,784,886 4,366,180
---------- ----------
NET INCREASE (DECREASE) IN CASH (233,669) (504,186)
Beginning cash balance.............................. 293,515 586,738
---------- ----------
ENDING CASH BALANCE 59,846 82,552
---------- ----------
See Notes to Consolidated Financial Statements
<PAGE>
PHC, Inc.
PHC, INC. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 1997
Note A - The Company
PHC, Inc. ("PHC") operates substance abuse treatment centers in several
locations in the United States, a psychiatric hospital in Michigan, out-patient
psychiatric centers in Nevada, Kansas, Michigan and Virginia and a long-term
care facility in Massachusetts. PHC also manages a psychiatric practice in New
York through BSC-NY, Inc. The consolidated financial statements include PHC and
its subsidiaries, all of which are 100% owned except as noted below
(collectively the "Company"):
PHC's subsidiaries, PHC of Utah, Inc., ("PHU"), PHC of Virginia, Inc.
("PHV"), and PHC of Rhode Island , Inc. ("PHRI") provide treatment of addictive
disorders and chemical dependency. Quality Care Centers of Massachusetts, Inc.
("Quality Care") operates a long-term care facility known as the Franvale
Nursing and Rehabilitation Center. PHC of Michigan, Inc. ("PHM"), operates
Harbor Oaks Hospital. PHM provides inpatient psychiatric care to children,
adolescents and adults and operates a partial hospitalization program that
includes outpatient treatment services. PHC of Nevada, Inc. ("PHN"), operates
Harmony Healthcare which was purchased on November 1, 1995. PHN provides
outpatient psychiatric care to children, adolescents and adults. PHC of Kansas,
Inc. ("PHK"), operates Total Concept EAP which was purchased on March 15, 1996.
PHK operates Employee Assistance Programs and provides outpatient behavioral
health care to children, adolescents and adults. North Point-Pioneer, Inc.
("NPP"), operates six outpatient behavioral health centers under the name of
Pioneer Counseling Centers. Four of the centers were purchased on August 31,
1996 for $110,000 and 15,000 shares of PHC, Inc. Class A Common Stock. The other
two centers were purchased on September 6, 1996 for $150,000. STL, Inc. ("STL")
operated day care centers prior to July, 1993. Since that time, PHC has
systematically phased out its day care center operations and the operating
results of STL and its net assets have been classified as "operations held for
sale" in the Condensed Consolidated Financial Statements. On November 1, 1996,
BSC-NY, Inc. ("BSC"), a newly formed wholly owned subsidiary of the company,
merged with Behavioral Stress Centers, Inc., a provider of management and
administrative services to psychotherapy and psychological practices in the
greater New York City Metropolitan Area. In connection with the merger, the
Company issued 150,000 shares of PHC, Inc. Class A Common Stock to the former
owners of Behavioral Stress Centers, Inc. At the closing Perlow Physicians, P.C.
acquired certain assets of Clinical Associates for $1,500,000 and notes for
$750,000 issued to the former owners of Behavioral Stress Centers, Inc. BSC-NY,
Inc. is the provider of management, administrative and billing services to
Perlow Physicians, P.C. On January 17, 1997 with an effective date of January 1,
1997 PHC, Inc. entered into a Stock Exchange agreement with Psychiatric &
Counseling Associates of Roanoke, Inc. consisting of the private practices of
two psychiatrists in the Roanoke, Virginia area, Dr. M. Patel and Dr. H. Patel.
In this agreement, in exchange for 64,500 shares of PHC, Inc. Class A common
stock, PHC, Inc. received 80% of the outstanding common stock of Psychiatric &
Counseling Associates of Roanoke, Inc. Concurrent with this agreement
Psychiatric & Counseling Associates of Roanoke, Inc. was merged into Pioneer
Counseling of Virginia, Inc., ("PCV") which, prior to the merger, was a
wholly-owned subsidiary of PHC, Inc. Pioneer Counseling of Virginia, Inc. is now
owned 80% by PHC, Inc., 10% by Dr. H. Patel and 10% by Dr. M. Patel and operates
a psychiatric practice in the Roanoke, Salem and Blacksburg area of Virginia.
<PAGE>
Note B - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-QSB and Item 310 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the nine months ended March 31, 1997
are not necessarily indicative of the results that may be expected for the year
ending June 30, 1997. The accompanying financial statements should be read in
conjunction with the June 30, 1996 consolidated financial statements and
footnotes thereto included in the Company's 10-KSB filed on October 4, 1996.
Note C - Subsequent Events
On April 15, 1997, the Company filed a Registration Statement on Form SB-2
with the Securities and Exchange Commission. With this Registration Statement
the Company seeks to register the underlying securities of the Convertible
Debentures to Seacrest Capital Limited and Infinity Investors Limited and
warrants issued to Alpine Capital Partners, Inc. in the same transaction as
reported on Form 8-K filed on November 5, 1996. In addition to these securities,
the Company is also seeking to register securities and warrants issued by the
Company over the past year as listed in the Form SB-2 filing for a total of
2,130,000 shares of Class A Common stock issued and issuable upon conversion of
the debentures and exercise of the warrants.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
PHC, INC. and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Net patient care revenue increased 9.8% to $7,215,386 for the three months
ended March 31, 1997 from $6,567,335 for the three months ended March 31, 1996.
This increase in revenue is due primarily to the acquisition of Pioneer
Counseling Centers in September 1996, Behavioral Stress Centers in November 1996
and Pioneer Counseling of Virginia in January 1997.
Net patient care revenue for the psychiatric and substance abuse facilities
increased to $5,932,855 for the quarter ended March 31, 1997 from $4,824,603 for
the same period in 1996. This increase in revenue is due primarily to the newly
acquired psychiatric treatment facilities in Nevada, Kansas, Michigan and
Virginia. This does not include the management fees of $194,537 as a result of
the New York acquisition. Net Patient care revenue for the long term care
facility decreased to $1,282,531 for the three months ended March 31, 1997 from
$1,742,732 for the same period in 1996 due to an admission restriction placed on
the facility by the Department of Public Health. The problems cited by the
Department of Public Health have been corrected and admissions are now being
accepted without restriction.
Liquidity and Capital Resources
A significant factor in the liquidity and cash flow of the Company is the
timely collection of its accounts receivable. Accounts receivable increased
during the quarter ended March 31, 1997 by 9.8%, approximately $1,200,000,
resulting in cash used in operations during the quarter of approximately
$755,078. The Company continues to closely monitor its accounts receivable
balances and is working to reduce amounts due consistent with growth in
revenues.
The Company believes that it has the necessary liquidity and capital
resources and contingent funding commitments to sustain existing operations for
the foreseeable future. The Company also intends to expand its operations
through the acquisition or establishment of additional behavioral healthcare
related businesses. The Company's expansion plans will be dependent upon
obtaining adequate financing as such opportunities arise.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company received a notice from Pioneer Health Care, Inc., a
Massachusetts non-profit corporation demanding that the Company discontinue use
of its PIONEER HEALTHCARE trademark upon the grounds that the mark infringes the
rights of Pioneer Health Care, Inc. under applicable law. Pioneer Health Care,
Inc. threatened to proceed with the necessary legal action to prevent the
Company from using the PIONEER HEALTHCARE mark, and to seek a cancellation of
the registration that has been issued by the U.S. Patent Trademark Office
(the"PTO") to the Company for the PIONEER HEALTHCARE mark, unless the Company
complied with this demand. The Company refused to comply with this demand,
whereupon Pioneer Health Care, Inc. filed a petition in the PTO seeking the
cancellation of the Company's registration of its PIONEER HEALTHCARE trademark.
The Company thereupon commenced litigation in the United States District Court
for the District of Massachusetts seeking a declaratory judgment that its use of
the PIONEER HEALTHCARE trademark does not infringe any rights of Pioneer Health
Care, Inc. under applicable law, and that it has the right to maintain its
registration of that mark. Pioneer Health Care, Inc. has filed a counterclaim in
that litigation seeking injunctive and monetary relief against the Company upon
claims of trademark infringement, trademark dilution and unfair competition. The
Company is defending itself vigorously against those claims. Proceedings upon
the petition filed by Pioneer Health Care, Inc. in the PTO seeking the
cancellation of the Company's registration of its PIONEER HEALTHCARE trademark
have been stayed pending the resolution of the litigation between the parties.
Although the Company regards Pioneer Health Care, Inc.'s counterclaims as being
without merit, an adverse decision could result in money damages against the
Company and required discontinuance by the Company of the PIONEER HEALTHCARE
mark could result in costs to the Company which could have a material adverse
effect on the Company.
In January 1996, the Company received notice that Mullikin Medical Center,
A Medical Group, Inc., located in Artesia, California, filed a petition with the
PTO seeking cancellation of the registration of the PIONEER HEALTHCARE mark.
This cancellation proceeding has been suspended pending the outcome of the
litigation described above.
On or about November 25, 1996, the Company was named as a defendant in a
complaint filed by Bentley Associates, L.P. in the Supreme Court of the State of
New York (Civil Action No. 605870/96). The complaint arose out of an alleged
breach of contract between Bentley Associates, L.P. and Behavioral Stress
Center, Inc. for unpaid advisory fees. The complaint sought compensatory damages
and other equitable relief. On January 15, 1997, the company filed a motion
seeking dismissal from the litigation which was granted on April 28, 1997 by
order of the Court.
Item 5. Other Information
On April 15, 1997, the Company filed a Registration Statement on Form SB-2
with the Securities and Exchange Commission. With this Registration Statement
the Company seeks to register the underlying securities of the Convertible
Debentures to Seacrest Capital Limited and Infinity Investors Limited and
warrants issued to Alpine Capital Partners, Inc. in the same transaction as
reported on Form 8-K filed on November 5, 1996. In addition to these securities,
the Company is also seeking to register securities and warrants issued by the
Company over the past year as listed in the Form SB-2 filing for a total of
2,130,000 shares of Class A Common stock issued and issuable upon conversion of
the debentures and exercise of the warrants.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
3.1.1 Articles of Amendment filed with the Commonwealth of
Massachusetts on January 28, 1997
(b) Reports on Form 8-K
On April 9, 1997, the Company filed a Current Report on Form 8-K
regarding the Department of Public Health citing the Company's
Franvale Nursing and Rehabilitation Center ("Franvale") for
deficiencies.
<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.
By: /s/ Bruce A. Shear
Date: May 14, 1997 Bruce A. Shear, President and
Chief Executive Officer
Date: May 14, 1997 By: /s/ Paula C. Wurts
Paula C. Wurts
Controller, Assistant Treasurer
<PAGE>
Exhibit Index
Exhibit No. Description
3.1.1 Articles of Amendment filed with the Commonwealth of
Massachusetts on January 28, 1997
27 Financial Data Schedule
<PAGE>
Exhibit 3.1.1 FEDERAL IDENTIFICATION
NOTE: Left hand column has the following: NO. 04-2601571
Space for initials for Examiner, Name Approved,
C, P, M, R.A. and P.C.
NOTE: Stamped by the Secretary of the Commonwealth
97 FEB 10, PM 1:40 Corporation Division
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B. Section 72)
We, Bruce A. Shear, President
and Paula C.Wurts, Assistant Clerk
of PHC, Inc.
_______________________________________________
(Exact name of corporation)
located at: 200 Lake Street, Suite 102, Peabody, MA 01960
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment affecting articles numbered:
3
___________________________________________________________________________
(Number those articles 1, 2, 3, 4, 5, and/or 6 being amended)
of the Articles of Organization were duly adopted at a meeting held on December
31, 1996, by vote of:
2,165,526 shares of Class A Common stock in favor out of 2,483,522 shares
outstanding. (type, class, & series if any)
742,218 shares of Class B Common Stock in favor out of 800,628* shares
outstanding. (type, class, & series if any)
** being at least a majority of each type, class or series outstanding and
entitled to vote thereon.
* The Class A and Class B Common Shares vote together as a single class
upon all matters except the election of directors; each Class A Share is
entitled to one vote per share and each Class B share is entitled to five votes
per share.
.
For amendments adopted pursuant to Chapter 156B. Section 70.
For amendments adopted pursuant to Chapter 156B. Section 71.
NOTE:: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on one side only of separate 8
1/2 x 11 sheets of paper with a left margin of at least 1 inch. Additions
to more than one article may be made on a single sheet so long as each
article requiring each addition is clearly indicated.
<PAGE>
To change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following: The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
Common: Common: Class A 10,000,000 $.01
Class B 2,000,000 $.01
Class C 200,000 $.01
Preferred: Preferred: 1,000,000 $.01
Change the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
Common: Common: Class A 20,000,000 $.01
Class B 2,000,000 $.01
Class C 200,000 $.01
Preferred: Preferred: 1,000,000 $.01
<PAGE>
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
Later effective date: _________________________________________________
SIGNED UNDER THE PENALTIES OF PERJURY, this 28th day of January, 1997
Bruce A, Shear__________________________________, President
Paula C. Wurts _________________________________, Assistant Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within
Articles of Amendment. and the
filing fee in the amount of $
__________ having been paid, said
article is deemed to have been
filed with me this __________ date
of __________, 19_______.
Effective date: _______________________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILED IN BY CORPORATION
Photocopy of document to be sent to:
Roslyn G. Daum, Esq.
Choate, Hall & Stewart
Exchange Place, 53 State Street
Boston, MA 02109
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
This schedule contains summary financial information extracted from the
consolidated balance sheet and the consolidated statement of income filed as
part of the report on Form 10-QSB and is qualified in its entirety by
reference to such report on Form 10-QSB.
</LEGEND>
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-1-1996
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 59,846
<SECURITIES> 0
<RECEIVABLES> 13,916,339
<ALLOWANCES> 1,563,824
<INVENTORY> 0
<CURRENT-ASSETS> 15,077,950
<PP&E> 9,677,057
<DEPRECIATION> 1,819,153
<TOTAL-ASSETS> 28,056,913
<CURRENT-LIABILITIES> 7,230,303
<BONDS> 9,419,077
0
0
<COMMON> 35,693
<OTHER-SE> 7,551,912
<TOTAL-LIABILITY-AND-EQUITY> 28,056,913
<SALES> 0
<TOTAL-REVENUES> 11,986,286
<CGS> 0
<TOTAL-COSTS> 11,319,826
<OTHER-EXPENSES> 558,561
<LOSS-PROVISION> 287,644
<INTEREST-EXPENSE> 558,561
<INCOME-PRETAX> 107,899
<INCOME-TAX> 42,971
<INCOME-CONTINUING> 64,928
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,928
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
