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): April 20, 2006
PHC, Inc.
(Exact Name of Registrant as Specified in its Charter)
Massachusetts
(State of Incorporation or Organization)
0-22916 04-2601571
(Commission Number) (I.R.S. Employer
Identification No.)
200 Lake Street, Suite 102, Peabody, Massachusetts 01960
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (978) 536-2777
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
___ Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
___ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
___ Pre-commencement communications pursuant to Rule 13c-4 (c) under the
Exchange Act (17 CFR 240.13e-4 (c)
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Item 1.01. Entry into a Material Definitive Agreement
On April 20, 2006, in conjunction with the agreement the Company entered
into with Medical Information Technologies, Inc., ("Meditech"), as previously
disclosed, the Company signed a Master Lease Agreement with Bank of America to
finance the acquisition of the software and the required hardware which will
provide the Company with enhanced billing, collection and clinical reporting
capabilities.
The agreement provides separate components for hardware and software:
* Under the first component Bank of America has agreed to purchase
hardware that is necessary for the Company to use the Meditech
software. This hardware is expected to be delivered in August
2006. The Company has agreed to lease the hardware from Bank of
America for [39] months beginning in April 2006. Scheduled lease
payments on the hardware begin at $00 for the first three
payments, followed by 35 payments of $6,065.11 and the final
payment of $6,065.11 paid upon the signing of the lease. The
lease includes an option for the Company to purchase the hardware
at fair market value at the lease termination. Based on required
disbursements by Bank of America in the amount of $200,000 to
purchase the software, and the expected fair market value at
lease termination, the lease payments over the term are
equivalent to financing the purchase of the hardware at an annual
interest rate of 6.13%.
* Under the second component Bank of America has agreed to disburse
$462,431 to Meditech to purchase software that the Company would
otherwise be obligated to purchase under its agreement with
Meditech. The schedule of Bank of America's purchase is based on
the software delivery and implementation plan included in the
Meditech agreement with the Company. The Company has entered into
a capital lease with Bank of America to lease the software for
[66] months beginning in April 2006. Scheduled payments under the
lease begin at $00 for the first six payments, followed by four
payments of $3,000, 55 payments of $9,868.71 and the final
payment of $9,868.71 paid upon the signing of the lease. The
Company has an option to purchase the software for one dollar at
lease termination. The lease payments over the term are
equivalent to financing the purchase of the software at an annual
interest rate of 8.03%.
The Company expects full implementation of the software at its treatment
facilities by March 2007.
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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: April 26, 2006 By: /s/ Bruce A. Shear
Bruce A. Shear
President