AHPC Holdings, Inc. - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______.

Commission File Number: 0-17458

AHPC Holdings, Inc.

(Exact name of registrant as specified in its charter)

Maryland		73-1326131
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Park Boulevard, Suite 1260

Itasca, IL 60143

(Address of principal executive office)

(630) 285-9191

(Registrant’s telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of the issuer’s Common Stock, par value $.03 per share, outstanding as of May 23, 2005, was 980,868.

AHPC Holdings, Inc.

FORM 10-Q

March 31, 2005

INDEX

PART I - - FINANCIAL INFORMATION

A quarterly review of the third quarter financial statements has been performed by an independent registered public accounting firm in accordance with Statement of Auditing Standards No. 100.

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets March 31, 2005 (unaudited) and June 30, 2004, (audited)	pgs.3-4

	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2005 and 2004	pg. 5

	Condensed Consolidated Statements of Operations (unaudited) for the Nine Months Ended March 31, 2005 and 2004	pg. 6

	Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended March 31, 2005 and 2004	pg. 7

	Notes to Condensed Consolidated Financial Statements (unaudited)	pg. 8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	pg. 18

Item 3.	Quantitative and Qualitative Disclosures About Market	pg. 23

Item 4.	Controls and Procedures	pg. 23

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	pg. 24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	pg. 24
Item 3.	Defaults Upon Senior Securities	pg. 24
Item 4.	Submission of Matters to a Vote of Security Holders	pg. 24
Item 5.	Other Information	pg. 24
Item 6.	Exhibits	pg. 24

Item 1. Financial Statements

AHPC Holdings, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2005 and June 30, 2004


ASSETS	March 31, 2005		June 30, 2004
	(unaudited)		(audited)
CURRENT ASSETS
Cash and cash equivalents	$	15,424	$	359,012
Accounts receivable - trade, net of allowance for
doubtful accounts of $339,851 at March 31, 2005
and $319,851 at June 30, 2004		1,978,413		1,823,149
Inventories, net		5,232,389		6,694,430
Prepaid expenses		545,810		425,301
Other receivables		5,193		5,193

Total current assets		7,777,229		9,307,085

PROPERTY, PLANT AND EQUIPMENT
Equipment, furniture and fixtures		2,612,364		2,621,109
Building improvements		14,310		14,310

Total property, plant and equipment		2,626,674		2,635,419

Less accumulated depreciation and amortization		2,231,770		2,028,981

Property, plant and equipment, net		394,904		606,438

Other assets		68,370		69,595

	$	8,240,503	$	9,983,118

The accompanying notes are an integral part of these condensed consolidated financial statements.

AHPC Holdings, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS - CONTINUED
March 31, 2005 and June 30, 2004


LIABILITIES AND SHAREHOLDERS’ EQUITY	March 31, 2005			June 30, 2004
	(unaudited)			(audited)
CURRENT LIABILITIES
Accounts payable - trade	$	2,494,336		$	2,349,617
Trade notes payable to bank		935,505			1,364,806
Notes payable		71,954			485,138
Accrued expenses		838,133			1,220,842

Total current liabilities		4,339,928			5,420,403

DEFERRED TAX LIABILITIES		725,972			725,972

COMMITMENTS AND CONTINGENCIES		-			-

SHAREHOLDERS’ EQUITY
Series A convertible preferred stock, $0.01 par value;
220,000 shares authorized, issued and outstanding		2,200			-
Common stock, $0.03 par value; 3,333,333 shares
authorized; 1,128,402 shares issued; 980,868 shares
outstanding at March 31,2005 and 1,108,452 shares issued;
960,918 shares outstanding at June 30, 2004		33,037			33,037
Additional paid-in capital		18,529,363			17,778,099
Accumulated deficit		(9,383,821	)		(7,968,217	)
		9,180,779			9,842,919
Less common stock in treasury, at cost, 147,534 shares
at March 31, 2005 and June 30, 2004		(6,006,176	)		(6,006,176	)

Total shareholders’ equity		3,174,603			3,836,743

	$	8,240,503		$	9,983,118

The accompanying notes are an integral part of these condensed consolidated financial statements.

AHPC Holdings, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2005 and 2004


	Three Months Ended March 31,
	2005		2004
	(unaudited)		(unaudited)

Net sales	$	6,413,177	$	9,340,989

Cost of goods sold		4,882,440		8,141,178

Gross profit		1,530,737