Corporate PresentationMay 2010

© 2009 PHC, Inc. All Rights Reserved - Confidential

NYSE Amex:PHC

PHC, Inc. dba

RENN GLOBAL ANNUAL MEETING AND INVESTOR CONFERENCE

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In addition to historical facts or statements of current condition, this presentation may contain forward-looking statements. The Company's performance and financial results could differ materially from those reflected in the forward-looking statements due to general financial, economic, regulatory and political conditions or additional factors unknown to the Company at this time, as well as more specific risks and uncertainties such as those set forth in documents filed by the Company with the SEC (including, but not limited to, its most recent reports on Form 8-K, Form 10-Q and Form 10-K, copies of which are available upon request or over the Internet at www.sec.gov). Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. Furthermore, the Company has no intent, and disclaims any obligation, to update any such factors or forward-looking statements to reflect future events or developments.

Safe Harbor Statement

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PHC: What We do...

• PHC (dba Pioneer Behavioral Health), is a leading

provider of behavioral healthcare services

• In-patient & out-patient; acute & long-term

• Four markets: Michigan, Nevada, Utah, and

Virginia

• Strong Growth & Outlook: Record revenues: For FY ‘09 of $46.4 million,

up 2.2% year over year; 9 mos FY’10 $39.0 million, up 12.4%

Operated profitably for last five quarters with recent profitability

increasing

CMS certification anticipated for Seven Hills Behavioral Institute

would allow PHC to gain government reimbursement for many

of the services provided

Opportunities for accelerated revenue growth & acquisitions

Annual RevenuesContinuing Operations

$ Millions

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• Individuals with psychiatric disorders, alcohol & drug dependency

• Corporate employees in the gaming & transportation industry via a

diversified marquee customer base:

Who we do it for....

Covering more than 1 million lives

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Mental Health Care Market Drivers

Catalysts for Mental Health Treatment

• Events of 9-11 were tipping point for Americans to seek help; created an

unprecedented need for emergency workplace mental health services

• 22.5M Americans suffer from drug abuse; less than 4M receive treatment*

• 7.5% of US population (16.5M) had at least one major depressive episode

(MDE) in the previous year (2007)*

• Adults with MDE had more than double the rate of illicit drug use (27.4% vs.

12.8%)*

• 5.4M Americans experience severe and persistent mental illnesses†

• Students grades 9-12 who have seriously considered suicide: 16.9% (2005)

• Behavioral health care sector continues to benefit from lingering effects of

facility closures in the 1990s

• Total inpatient psychiatric hospital beds 44% lower than 1991 peak*Thomson Healthcare report, June 2007. †Center for Mental Health Services, Mental Health, United States, 1996.

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Financial Impact of Mental Health Care

• Large, expanding market: $100 billion

spent annually on mental health treatment

• U.S. substance abuse treatment costs

totaled $20.7 billion in 2003, up 124%

from $9.3 billion in 1986*

• Total economic cost of alcohol & drug

abuse: $246 billion annually

$98 billion related to drug abuse†

$20.7B

*2007 National Survey on Drug Use & Health †The Lewin Group, 1998 (most recent data available)

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New Government Drivers

Supporting Legislation:

•Mental Health Parity Legislation signed into law on

October 3, 2008:

Requires group health insurance plans to provide

equal access and cost sharing for physical and mental

health treatment

Legislation becomes effective October 2009 and

implemented by most plans on January 1, 2010

• In addition, the new economic stimulus plan

includes more than $80 billion to be used for

state-level healthcare needs

• 32 million new insureds through healthcare

reform legislation

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Most Important Driver: Treatment WorksAccording to a major U.S. Dept of Health & Human Services study, negative consequences of drug abuse decrease dramatically following treatment, improving many aspects of a patient’s life:

Source: National Treatment Improvement Evaluation, HHS 1997 (most recent of its kind). See: http://ncadi.samhsa.gov/govstudy/f027/

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PHC’s Operating Structure

Patient Care Patient Care via Hospitalvia Hospital

& Clinical Services& Clinical Services

Patient Care Patient Care via Hospitalvia Hospital

& Clinical Services& Clinical Services

Contract SupportContract Support& Integrated & Integrated

Delivery ServicesDelivery Services

Contract SupportContract Support& Integrated & Integrated

Delivery ServicesDelivery Services

Operating UnitsOperating UnitsOperating UnitsOperating Units

Capstone AcademyCapstone Academy

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Fiscal 2010- 9 months ended 3/31/2010

PHC Revenue Mix

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PHC Hospital & Clinical Services

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PHC Bed Count Growth

CAGR 22% FY03 – FY10 (proj.)

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Integrated Delivery Services

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Harmony Healthcare

• 10-Year, $100 million mental health contract with Behavioral Healthcare Options, subsidiary of United Healthcare, (NYSE: UNH)

Largest in company history, started 1/1/07

More than doubled Harmony's annual run-rate: $5M to

~$13M

• Strong presence in Southern Nevada region

Established relationships with 21 casino and resort

properties

Combined, PHC of Nevada will provide mental & behavioral healthcare services to 600,000+ consumers in So. Nevada

Presence strengthened with Seven Hills Behavioral Institute

opened May 2008

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Major New Las Vegas Expansion

Las Vegas, Nevada Expansion announced April

2008

• Secured 93,000 sq ft building site for two new behavioral

treatment facilities ~15 miles SW of downtown

• A 7,000 sq ft behavioral health outpatient facility opened

June 2009

• Planning an additional 45,000 sq ft, three-story

behavior/medical complex on the site

• ~100 beds & capacity to generate >$25M annually

SHBSHenderson, NV

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Wellplace Positioned For Growth

• Renewed a major deal to

service 2.2M citizens of

Wayne County, MI

• Increased marketing effort

underway to achieve better

economies of scale and

expansion into other areas of

the Department of Defense

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Three Months/ Fiscal Year Comparison

Three Months Ended March 31,

FY2010 FY2009

Total Revenue $13.5 M $12.0M

Patient Care Revenues $12.7M $11.1M

Income from Operations

$781,000 $98,000

EBITDA $1,128 $336

Income Before Taxes $758,000 $12,000

*Net Income (loss) $500,000 $(200,000)

Diluted Earnings Per Common Share

$0.02 $(0.01)

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Year/Year Annual Record Growth*

*Continuing Operations in Millions (excluding Pivotal revenue). Fiscal Year Ended June 30

CAGR 12.5% FY03 - FY09

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2010 Fiscal Third Quarter Highlights

Quarter Ended 3/30/2010 :

• Total Net Revenues increased 12.7% to $13.5 million

• Increased census at Seven Hills Hospital in Las Vegas and overall across facilities

• Income from operations improved $683,000 to $781,000 compared to Income from

Operations of $98,000 in year-earlier period

• The 2010 fiscal third quarter represented the company’s fifth consecutive quarter of

profitability.

• Strong sequential revenue and profit growth

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Balance Sheet Summary

03/31/10 06/30/09

Cash & Cash Equivalents

$3.3M $3.2M

Current Assets $14.2M $11.8M

Total Assets $24.9M $22.7M

Total Current Liabilities

$7.1M $5.7M

Long-Term Debt $300K $500K

Total Liabilities $8.0M $6.6M

Shareholders Equity $ 16.9M $16.0M

Liabilities + SE $24.9M $22.7M

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New Expansion in Detroit, Michigan

Expanding youth services in Detroit, Michigan, with enrollment in new Capstone Academy underway January 2009:

• Capstone represents next phase of PHC's efforts to

provide expanded residential treatment services to

adjudicated youth in the Detroit Metro Area

• DBI has been successfully delivering similar programs

since 2004

• Additional expansion opportunities under consideration

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Stock Repurchase Program

Buyback program initiated June 2008 that authorizes repurchase of up to one million common shares on the open market extended through June 2010.

Plan was executed because management believes PHC’s fundamentals and prospects for growth have never been stronger:

•Excluding startup losses from new facilities in Henderson, NV and Detroit, MI, PHC continues long tradition of operating profitably

•Demand for services is strong and industry is prospering

•New Mental Health Parity bill expected to serve as strong market driver

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PHC Management Team

Bruce A. Shear

•CEO and Director since 1980

•VP, Financial Affairs of PHC 1976-1980

•20+ years on Federation of American Health Systems Board of Governors

•Board of trustees for the National Association of Psychiatric Health Systems

Robert H. Boswell

•Senior VP since February 1999

•Exec. VP of PHC 1992 to 1999

•Administrator of PHC’s Highland Ridge Hospital facility 1989 to 1994

Paula C. Wurts•Chief Financial Officer since

1989

•Assistant Clerk since 1996

•Assist. Treasurer 1993-2000; currently Treasurer

•Accounting Manager 1985-1989

Alexander N. Luvall

•Executive Vice President since September 2004

•Experienced attorney

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Investment Considerations

A leading provider of behavioral healthcare

services

Strong market drivers, including new

federal regs

Strong revenue growth and increasing

profitability

Multiple new facilities coming up-to-speed,

driving growth & profitability in FY2010

Stock repurchase program continuing

NYSE Amex:PHC

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For More Information

Company ContactBruce A. Shear

President & CEO

PHC Inc.

200 Lake Street

Suite 102

Peabody, MA 01960

Tel 978-536-2777

Fax 978-536-2677

www.phc-inc.com

Investor Relations

Dan Schustack

CEOcast, Inc.

Tel (212) 732-4300

Fax (212) 732-1132

www.ceocast.com

dschustack@ceocast.com