SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 7, 1996
PHC. Inc.
(Exact name of registrant as specified in its charter)
Massachusetts 0-23524 04-2601571
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
200 Lake Street Suite 102. Peabody, MA 01960
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (508) 536-2777
Item 5. Other Events.
On October 7, 1996, PHC, Inc., (the "Company") issued $3,125,000 principal
amount of its 7% Convertible Debentures (the "Debentures") for a purchase price
of $2,500,000 to two accredited nvestors. A Consulting Fee of $100,000 was paid
by the Company to Alpine Capital, Inc. in connection with the transaction. The
shares were sold under the exemption from registration afforded by Section 4(2)
under the Securities Act of 1933 in reliance on investment representations and
other representations made by the Purchasers in connection with the sale. On
October 7, 1996, the closing price of the Company's Class A Common Stock as
reported in the Wall Street Journal was $6.75 per share.
The principal amount of the Debentures bear interest at the rate of 7% per
year and is payable on September 30, 1998. The Debentures are convertible into
Class A Common Stock of the Company at a conversion rate equal to the lesser of
$8.50 (subject to adjustment in the case of certain dilutive issuances) and the
average closing bid price of the Company's Common Stock as reported on Nasdaq
for the five trading days immediately preceding the date of conversion. The
Purchasers may convert up to 50% of the Debentures commencing on the 60th day
following the date of issuance provided that a Registration Statement covering
the sale of the Class A Common Stock into which the Debentures are convertible
has been declared effective by the Securities and Exchange Commission, and up to
100% of the Debentures commencing on the 90th day following the date of issue.
The Purchasers are entitled to request on one occasion prior to April 7, 1997
that the Class A Common Stock issued on conversion of the Debentures be
registered on Form S-8, and if so requested, the Company is obligated to file a
registration statement covering such shares within 45 days after the date of
request. The Purchasers made such a request on October 7, 1996. In the event
that (i) the Company fails to issue Class A Common Stock promptly after a
requested conversion or (ii) the Registration Statement described above is not
declared effective within certain stated periods after the issuance of the
Debentures, the Company is obligated to pay certain cash damages to the
Purchasers. In addition, the Purchasers have a right of first refusal to
purchase certain newly issued securities of the Company for a period of 180 days
following issuance of the Debentures.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
4.7 Regulation D Securities Subscription Agreement among PHC, Inc. and
Infinity Investors Ltd. and Seacrest Capital Limited dated October 7,
1996
4.8 7% Convertible Debenture issued to Infinity Investors Ltd. in the
principal amount of $1,875,000 4.9 7% Convertible Debenture issued
to Seacrest Capital Limited in the principal amount of $1,250,000
4.10 Book Entry Transfer Agent Agreement among PHC, Inc., Infinity
Investors Ltd., Seacrest Capital Limited and American Stock Transfer
& Trust Company dated October 7, 1996
4.11 Registration Rights Agreement among PHC, Inc., Infinity Investors Ltd.
and Seacrest Capital Limited dated October 7, 1996
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHC, INC.
Date: October ______ 1996 BY: ______________________________
Bruce A. Shear
President
EXHIBIT INDEX
Exhibit Document
4.7 Regulation D Securities Subscription Agreement among PHC, Inc. and
Infinity Investors Ltd. and Seacrest Capital Limited dated October 7,
1996
4.8 7% Convertible Debenture issued to Infinity Investors Ltd. in the
Principal amount of $1,975,000
4.9 7% Convertible Debenture issued to Seacrest Capital Limited in the
principal amount of $1,250,000
4.10 Book Entry Transfer Agent Agreement among PHC, Inc., Infinity
Investors Ltd., Seacrest Capital Limited and American Stock Transfer &
Trust Company dated October 7,
1996
4.11 Registration Rights Agreement among PHC, Inc., Infinity Investers Ltd.
and Seacrest Capital Limited dated October 7, 1996 99