U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998.
|_| TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ___________
COMMISSION FILE NUMBER 0-22916
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)
978-536-2777
(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 _ X
No____
APPLICABLE ONLY TO CORPORATE ISSUERS
Number of shares outstanding of each class of common equity, as of October 16,
1998:
Class A Common Stock 4,935,267
Class B Common Stock 727,328
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(Check one):
Yes______ No X
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<PAGE>
PHC, INC.
Part I, Item 1 financial statements filed in the Company's 10-QSB for the
period ended September 30, 1998, filed with the Securities and Exchange
Commission on November 3, 1998, are being amended to reflect the following:
1. The effect of the changes to the financial statements for the period ended
June 30, 1998, as amended.
a. Increase in general and administrative expenses amounting to
approximately $148,000 related to the issuance of warrants to a
financial advisor to the Company.
b. Increase in dividends related to the beneficial conversion feature of
series B convertible preferred stock of approximately $190,000.
2. Increase in interest expense related to the issuance of warrants with debt
of approximately $26,000 for the three months ended September 30, 1998.
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
PHC INC. AND SUBSIDIARIES (UNAUDITED)
CONSOLIDATED BALANCE SHEETS
SEPT. 30 JUNE 30
1998 1998
(as restated) (as restated)
______________________________
ASSETS
Current assets:
Cash & Cash Equivalents $ 81,275 $ 227,077
Accounts receivable, net of allowance for
bad debts of $3,539,637 at Sept. 30, 1998,
$3,488,029 at June 30, 1998 7,220,700 7,441,972
Prepaid expenses 181,984 156,695
Other receivables and advances 282,661 127,064
Deferred Income Tax Asset 515,300 515,300
Other Receivables, related party 305,766 64,065
__________ _________
Total current assets 8,587,686 8,532,173
Accounts Receivable, noncurrent 610,000 685,000
Other receivables, noncurrent, related
party, net of allowance for doubtful
accounts of $382,000 Sept. 30, 1998
and June 30, 1998 3,048,742 2,941,402
Other Receivable 117,680 426,195
Property and equipment, net 2,124,485 2,128,273
Deferred income taxes 154,700 154,700
Deferred financing costs, net of amortization
of $4,514 at Sept. 30, 1998 and $18,065 at
June 30, 1998 59,593 53,608
Goodwill, net of accumulated amortization of
$26,869 at Sept. 30, 1998 $307,707 at June
30, 1998 1,983,363 2,011,613
Other assets 136,568 19,386
__________ _________
Total assets $16,822,817 $16,952,350
__________ _________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,691,024 $ 2,346,213
Notes payable--related parties 243,696 159,496
Current maturities of long term debt 1,137,138 1,107,167
Revolving credit note 1,559,490 1,683,458
Current portion of obligations under capital
leases 64,652 67,492
Accrued Payroll, Payroll Taxes and Benefits 260,547 729,194
Accrued expenses and other liabilities. 1,093,807 1,004,763
Net current liabilities of discontinued
operations 2,641,537 2,641,537
__________ _________
Total Current liabilities 9,691,891 9,739,320
Long-term debt 2,742,730 2,850,089
Obligations under capital lease 77,160 93,747
__________ _________
Total noncurrent liabilities 2,819,890 2,943,836
__________ _________
Total liabilities 12,511,781 12,683,156
__________ _________
Stockholders' Equity:
Preferred stock, $.01 par value; 1,000,000
shares authorized, 976 and 950 shares
issued and outstanding Sept. 30, 1998 and
June 30, 1998 liquidation preference
($976,000 and 950,000 respectively) 10 10
Class A common stock, $.01 par value; 20,000,000
shares authorized, 4,935,267 shares issued
Sept. 98 and June 98 49,353 49,353
Class B common stock, $.01 par value; 2,000,000
shares authorized, 727,328 issued Sept. 98 and
June 98, convertible into one share of Class
A common stock 7,273 7,273
Additional paid-in capital 15,529,019 15,485,895
Treasury stock, 2,776 shares at cost (12,122) (12,122)
Accumulated Deficit (11,262,497) (11,261,215)
____________ ____________
Total Stockholders' Equity 4,311,036 4,269,194
____________ ____________
Total Liabilities and Stockholders'
Equity $16,822,817 $16,952,350
____________ ____________
See Notes to Consolidated Financial Statements
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<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
September 30
1998 1997
(as restated)
___________________________________
Revenues:
Patient Care, net $4,476,738 $4,770,735
Management Fees 235,104 233,283
Other 199,453 173,477
___________ __________
Total revenue 4,911,295 5,177,495
Operating expenses:
Patient care expenses 2,308,051 2,641,817
Cost of Management Contracts 128,165 102,400
Provision for doubtful accounts 356,190 427,093
Administrative expenses 1,905,917 2,286,764
___________ _________
Total operating expenses 4,698,323 5,458,074
___________ __________
Income (loss) from operations 212,972 (280,579)
___________ __________
Other income (expense):
Interest income 109,382 97,647
Interest expense (312,312) (326,588)
Other income (expense), net 4,342 34,750
___________ __________
Total other expense, net (198,588) (194,191)
Income (loss) before Provision for Taxes 14,384 (474,770)
Provision for Income Taxes 911 7,200
___________ __________
Income (loss) from continuing operations 13,473 $(481,970)
Loss from discontinued operations -- (436,668)
Net income (loss) $ 13,473 $(918,638)
Dividends (14,544) 0
___________ __________
Loss applicable to common shareholders $ (1,071) $(918,638)
___________ __________
Basic and Diluted earnings (loss) per
common share:
Continuing Operations $ .00 $ (.11)
Discontinued Operations -- (.10)
Total $ .00 $ (.21)
Basic and Diluted weighted average number
of shares outstanding 5,659,819 4,444,706
See Notes to Consolidated Financial Statements
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<PAGE>
PHC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
SEPTEMBER 30
1998 1997
(as restated)
__________________________
Cash flows from operating activities:
Net income (loss) $13,473 $(918,638)
Adjustments to reconcile net income or
loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 78,775 146,337
Compensatory stock options and stock and
warrants issued for obligations 25,624 46,131
Changes in:
Accounts receivable (43,681) (228,345)
Prepaid expenses and other current assets (25,289) 137,686
Other assets 30,436 11,461
Accounts payable 344,811 40,577
Accrued expenses and other liabilities (379,603) (64,853)
Net liabilities of discontinued operations -- 193,087
_________ ________
Net cash provided by (used in) operating
activities 44,546 (636,557)
Cash flows from investing activities:
Acquisition of property and equipment (46,737) (39,084)
___________ __________
Costs related to business acquisitions -- (8,390)
Net cash used in investing activities (46,737) (47,474)
Cash flows from financing activities:
Revolving debt, net (123,968) (462,847)
Proceeds from borrowings 100,000 446,062
Payments on debt (111,895) --
Deferred financing costs (5,985) --
Preferred Stock Dividends (1,763) --
___________ __________
Net cash provided by (used in) financing
activities (143,611) (16,785)
___________ __________
NET INCREASE (DECREASE) IN CASH (145,802) (700,816)
Beginning cash balance 227,077 844,471
___________ __________
ENDING CASH BALANCE $81,275 $143,655
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $282,821 $ 33,101
Income taxes 51,195 37,956
SUPPLEMENTAL DISCLOSURES OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Conversion of Debt to Common Stock -- $2 ,734,375
Conversion of Preferred Stock to Common Stock -- 584,587
Stock issued for North Point Acquisition -- 31,383
Issuance of Preferred Stock in lieu of cash for
Dividends due $ 26,000 --
See Notes to Consolidated Financial Statements
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<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: December 7, 1999 /s/ Bruce A. Shear
Bruce A. Shear
President
Chief Executive Officer
Date: December 7, 1999 /s/ Paula C. Wurts
Paula C. Wurts
Controller
Assistant Treasurer
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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 and is qualified in its entirety by reference to such
report on Form 10-QSB.
</LEGEND>
<CIK> 0000915127
<NAME> PHC, Inc.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-1-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1.000
<CASH> 81,275
<SECURITIES> 0
<RECEIVABLES> 11,370,337
<ALLOWANCES> 3,539,637
<INVENTORY> 0
<CURRENT-ASSETS> 8,587,686
<PP&E> 3,071,281
<DEPRECIATION> 946,796
<TOTAL-ASSETS> 16,822,817
<CURRENT-LIABILITIES> 9,691,891
<BONDS> 0
0
10
<COMMON> 56,626
<OTHER-SE> 4,254,400
<TOTAL-LIABILITY-AND-EQUITY> 16,822,817
<SALES> 0
<TOTAL-REVENUES> 4,911,295
<CGS> 0
<TOTAL-COSTS> 4,698,323
<OTHER-EXPENSES> 319,448
<LOSS-PROVISION> 356,190
<INTEREST-EXPENSE> 312,312
<INCOME-PRETAX> 14,384
<INCOME-TAX> 911
<INCOME-CONTINUING> 13,473
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,473
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
