##### Table of Contents





SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 June 30, 2009



| ̈ | 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 000-51954





DCP Holding Company

(Exact name of Registrant as specified in its Charter)







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Ohio                                                           |  | 20-1291244                       
|(State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|100 Crowne Point Place Sharonville, Ohio |  | 45241     
|(Address of Principal Executive Office)  |  | (Zip Code)

Registrants telephone number, including area code: (513) 554-1100





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 and 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 has
submitted electronically and posted on its corporate website, if any, every Interactive Data File required and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).  Yes   ̈    No   ̈

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of large accelerated filer, accelerated filer and
smaller reporting company in rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                      |  |                                             |  |                             
|-------------------------- |  | -------------------- |  | ------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer   ̈ |  | Non-accelerated filer  x                    |  | Smaller reporting Company   ̈
|                           |  |                      |  | (Do not check if smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).  Yes   ̈    No  x

As of
June 30, 2009 there were 622 of the Registrants Class A Redeemable Common Shares outstanding , 7,641 of the Registrants Class B Redeemable Common Shares outstanding and 225 of the Registrants Provider Preferred-2009
Series Redeemable Preferred Shares.









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##### Table of Contents

TABLE OF CONTENTS



|                               |  |                                                                                       |  |     
|------------------------------ |  | ------------------------------------------------------------------------------------- |  | ----
|                               |  |                                                                                       |  | PAGE
|PART I  FINANCIAL INFORMATION |  |                                                                                      
|Item 1.                        |  | Financial Statements                                                                  |  | 1   
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 19  
|Item 4.                        |  | Controls and Procedures                                                               |  | 20  
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                      
|Item 1.                        |  | Legal Proceedings                                                                     |  | 21  
|Item 1A.                       |  | Risk Factors                                                                          |  | 21  
|Item 2.                        |  | Unregistered Sales of Equity and Use of Proceeds                                      |  | 21  
|Item 3.                        |  | Defaults Upon Senior Securities                                                       |  | 21  
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                   |  | 21  
|Item 5.                        |  | Other Information                                                                     |  | 22  
|Item 6.                        |  | Exhibits                                                                              |  | 23  
|                               |  | Signatures                                                                            |  | 23  



i



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##### Table of Contents

|Item 1. | Financial Statements.
|------- | ---------------------

DCP HOLDING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)





|                                                                                                                                                                                             |  |              |            |                  |   |           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ---------------- | - | ----------
|                                                                                                                                                                                             |  | June 30,2009 |            | December 31,2008
|ASSETS                                                                                                                                                                                       |  |              |            |                  |   |           
|INVESTMENTS:                                                                                                                                                                                 |  |              |            |                  |   |           
|Fixed maturities at fair value, cost of $700,000 and $900,000 at June 30, 2009 and December 31, 2008, respectively                                                                           |  | $            | 701,036    |                  | $ | 909,987   
|Short-term investments at fair value, cost of $5,101,624 and $5,643,000 at June 30, 2009 and December 31, 2008,
respectively                                                                 |  |              | 5,117,609  |                  |   | 5,655,920 
|                                                                                                                                                                                             |  |              |            |                  |   |           
|Total investments                                                                                                                                                                            |  |              | 5,818,645  |                  |   | 6,565,907 
|CASH AND CASH EQUIVALENTS                                                                                                                                                                    |  |              | 2,162,175  |                  |   | 2,527,946 
|ACCRUED INVESTMENT INCOME                                                                                                                                                                    |  |              | 10,676     |                  |   | 21,384    
|ACCOUNTS RECEIVABLE, net of allowance of $30,495 and $17,172 at June 30, 2009 and December 31, 2008, respectively                                                                            |  |              | 364,501    |                  |   | 455,626   
|UNBILLED ACCOUNTS RECEIVABLE (Note 2)                                                                                                                                                        |  |              | 27,716,401 |                  |   | 20,845,634
|DEFERRED ACQUISITION COSTS (Note 2)                                                                                                                                                          |  |              | 1,690,204  |                  |   | 1,196,060 
|PROPERTY AND EQUIPMENT, net of depreciation and amortization of $2,022,826 and $1,805,789 at June 30, 2009 and December 31, 2008,
respectively                                               |  |              | 2,661,359  |                  |   | 2,833,495 
|INTANGIBLE ASSETS, net of accumulated amortization of $74,491 and $66,817 at June 30, 2009 and December 31, 2008,
respectively                                                               |  |              | 165,509    |                  |   | 173,183   
|GOODWILL                                                                                                                                                                                     |  |              | 136,355    |                  |   | 136,355   
|DEFERRED INCOME TAX                                                                                                                                                                          |  |              | 144,292    |                  |   | 145,588   
|OTHER ASSETS                                                                                                                                                                                 |  |              | 844,174    |                  |   | 620,132   
|                                                                                                                                                                                             |  |              |            |                  |   |           
|TOTAL ASSETS                                                                                                                                                                                 |  | $            | 41,714,291 |                  | $ | 35,521,310
|                                                                                                                                                                                             |  |              |            |                  |   |           
|                                                                                                                                                                                             |  |             
|LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS EQUITY                                                                                                                                      |  |              |            |                  |   |           
|CLAIMS PAYABLE                                                                                                                                                                               |  | $            | 1,770,981  |                  | $ | 2,631,070 
|UNEARNED PREMIUM REVENUE (Note 2)                                                                                                                                                            |  |              | 28,709,012 |                  |   | 21,605,647
|OTHER PAYABLES AND ACCRUALS                                                                                                                                                                  |  |              | 3,097,147  |                  |   | 3,164,403 
|REVOLVING NOTE                                                                                                                                                                               |  |              | 630,000    |                  |   | 630,000   
|MORTGAGE LOAN PAYABLE                                                                                                                                                                        |  |              | 1,080,000  |                  |   | 1,140,000 
|CAPITAL LEASE OBLIGATION                                                                                                                                                                     |  |              |            |                  |   | 19,253    
|DEFERRED COMPENSATION                                                                                                                                                                        |  |              | 831,351    |                  |   | 684,363   
|                                                                                                                                                                                             |  |              |            |                  |   |           
|TOTAL LIABILITIES                                                                                                                                                                            |  |              | 36,118,491 |                  |   | 29,874,736
|                                                                                                                                                                                             |  |              |            |                  |   |           
|REDEEMABLE PREFERRED AND COMMON SHARES:                                                                                                                                                      |  |              |            |                  |   |           
|Provider Preferred-2009 Series Redeemable Preferred Shares, no par valueauthorized, 5,000 shares; issued and outstanding, 225 and zero
at June 30, 2009 and December 31, 2008, respectively |  |              | 147,001    |                  |   |           
|Class A, Redeemable Common Shares, no par valueauthorized, 7,500 shares; issued and outstanding, 622 and 630 at June 30, 2009
and December 31, 2008, respectively                           |  |              | 410,160    |                  |   | 423,241   
|Class B Redeemable Common Shares, no par valueauthorized, 100,000 shares; issued and outstanding, 7,641 and 7,775 at June 30, 2009
and December 31, 2008, respectively                      |  |              | 5,038,639  |                  |   | 5,223,333 
|                                                                                                                                                                                             |  |              |            |                  |   |           
|Total redeemable preferred and common shares                                                                                                                                                 |  |              | 5,595,800  |                  |   | 5,646,574 
|                                                                                                                                                                                             |  |              |            |                  |   |           
|                                                                                                                                                                                             |  |             
|SHAREHOLDERS EQUITYPreferred Shares; no par valueauthorized, 95,000 shares; issued, none                                                                                                  |  |              |            |                  |   |           
|                                                                                                                                                                                             |  |              |            |                  |   |           
|                                                                                                                                                                                             |  |             
|TOTAL LIABILITIES, REDEEMABLE SHARES AND SHAREHOLDERS EQUITY                                                                                                                                |  | $            | 41,714,291 |                  | $ | 35,521,310
|                                                                                                                                                                                             |  |              |            |                  |   |           

See notes to unaudited condensed consolidated financial statements.



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DCP HOLDING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)





|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|------------------------------------------------------------- |  | ---------------------------------- | ---------- | -------------------------------- | - | ---------- |  | - | ---------- | - |  | - | ---------- | -
|                                                              |  | For the Three Months EndedJune 30, |            | For the Six Months EndedJune 30, |  
|                                                              |  | 2009                               |            | 2008                             |   | 2009       |  |   | 2008       |  
|REVENUES                                                      |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|Premium revenue                                               |  | $                                  | 17,609,699 |                                  | $ | 16,126,075 |  | $ | 35,010,230 |   |  | $ | 31,660,271 |  
|Investment income                                             |  |                                    | 28,143     |                                  |   | 52,083     |  |   | 63,215     |   |  |   | 117,873    |  
|Other income                                                  |  |                                    | 16,733     |                                  |   | 12,196     |  |   | 38,401     |   |  |   | 25,935     |  
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|Total revenues                                                |  |                                    | 17,654,575 |                                  |   | 16,190,354 |  |   | 35,111,846 |   |  |   | 31,804,079 |  
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|                                                              |  |                                    |            |                                 
|EXPENSES                                                      |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|Healthcare services expense                                   |  |                                    | 14,445,952 |                                  |   | 13,016,785 |  |   | 29,023,092 |   |  |   | 25,938,783 |  
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|Insurance expense:                                            |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|Salaries and benefit expense                                  |  |                                    | 1,123,658  |                                  |   | 1,076,868  |  |   | 2,305,006  |   |  |   | 2,189,317  |  
|Commission expense and other acquisition costs                |  |                                    | 823,518    |                                  |   | 606,041    |  |   | 1,538,030  |   |  |   | 1,267,278  |  
|Other insurance expense                                       |  |                                    | 1,179,617  |                                  |   | 1,104,699  |  |   | 2,399,333  |   |  |   | 2,479,236  |  
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|Total insurance expense                                       |  |                                    | 3,126,793  |                                  |   | 2,787,608  |  |   | 6,242,369  |   |  |   | 5,935,831  |  
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|Total expenses                                                |  |                                    | 17,572,745 |                                  |   | 15,804,393 |  |   | 35,265,461 |   |  |   | 31,874,614 |  
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|                                                              |  |                                    |            |                                 
|INCOME (LOSS) BEFORE INCOME TAX                               |  |                                    | 81,830     |                                  |   | 385,961    |  |   | (153,615   | ) |  |   | (70,535    | )
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|                                                              |  |                                    |            |                                 
|INCOME TAX EXPENSE (BENEFIT)                                  |  |                                    | 28,821     |                                  |   | 135,626    |  |   | (54,507    | ) |  |   | (24,786    | )
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|                                                              |  |                                    |            |                                 
|INCOME (LOSS) ON REDEEMABLE SHARES                            |  | $                                  | 53,009     |                                  | $ | 250,335    |  | $ | (99,108    | ) |  | $ | (45,749    | )
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  
|                                                              |  |                                    |            |                                 
|BASIC AND DILUTED EARNINGS (LOSS) PER REDEEMABLE COMMON SHARE |  | $                                  | 6.21       |                                  | $ | 29.60      |  | $ | (12.03     | ) |  | $ | (5.41      | )
|                                                              |  |                                    |            |                                  |   |            |  |   |            |   |  |   |            |  

See notes to unaudited condensed consolidated financial statements.



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DCP HOLDING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY AND REDEEMABLE SHARES

FOR THE SIX MONTHS ENDED JUNE
30, 2009 AND 2008 (Unaudited)





|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------- |  | ---------------------- | - |  | ------------------------- | ------- | ------------------- | ----------------- | ----- | ---------------- | ------ | - | ----------------------------------------- | -------------- |  | ------ |  | - | ------------------------- |  | - | ------- | - |  | - | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                                 |  | RedeemableCommonShares |   |  | RedeemablePreferredShares |         | ShareholdersEquity |                   |       |                  |       
|                                                                                 |  | Class A                |   |  | Class B                   |         |                     | ProviderPreferred |       | RetainedEarnings |        |   | OtherAccumulatedComprehensiveIncome(Loss) |                |  | Total  |  |   | ComprehensiveIncome(Loss) | 
|                                                                                 |  | NumberofShares         |   |  | Amount                    |         |                     | NumberofShares    |       |                  | Amount |   |                                           | NumberofShares |  | Amount |  |   |                           | 
|BALANCEDECEMBER 31, 2008                                                        |  | 630                    |   |  | $                         | 423,241 |                     |                   | 7,775 |                  |        | $ | 5,223,333                                 |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Net loss                                                                         |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  | $ | (99,108 | ) |  |   |        |   |  | $ | (99,108 | ) |  | $ | (99,108 | )
|Change in fair value of interest rate swap (net of income tax of $4,949)         |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  | $ | 9,581  |   |  |   | 9,581   |   |  |   | 9,581   |  
|Unrealized loss on investments (net of income tax benefit of $3,703)             |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   | (7,092 | ) |  |   | (7,092  | ) |  |   | (7,092  | )
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Total comprehensive loss                                                         |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  | $ | (96,619 | )
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Redeemable Shares issued, net of issuance cost                                   |  |                        |   |  |                           |         |                     |                   | 30    |                  |        |   | 18,066                                    |                |  | 225    |  | $ | 140,024                   |  |   |         |   |  |   |        |   |  |   |        |   |  |   |         |  
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Class A Common Shares exchanged for Class B Common Shares                        |  | (3                     | ) |  |                           | (2,012  | )                   |                   | 3     |                  |        |   | 2,012                                     |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Redeemable Shares repurchased                                                    |  | (5                     | ) |  |                           | (3,305  | )                   |                   | (167  | )                |        |   | (108,940                                  | )              |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Accretion (dilution) of shares to redemption value                               |  |                        |   |  |                           | (7,764  | )                   |                   |       |                  |        |   | (95,832                                   | )              |  |        |  |   | 6,977                     |  |   | 99,108  |   |  |   | (2,489 | ) |  |   | 96,619  |   |  |   |         |  
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|BALANCEJUNE 30, 2009                                                            |  | 622                    |   |  | $                         | 410,160 |                     |                   | 7,641 |                  |        | $ | 5,038,639                                 |                |  | 225    |  | $ | 147,001                   |  | $ |         |   |  | $ |        |   |  | $ |         |   |  |   |         |  
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|                                                                                 |  |                        |   | 
|                                                                                 |  | RedeemableCommonShares |   |  | RedeemablePreferredShares |         | ShareholdersEquity |                   |       |                  |       
|                                                                                 |  | Class A                |   |  | Class B                   |         |                     | ProviderPreferred |       | RetainedEarnings |        |   | OtherAccumulatedComprehensiveIncome(Loss) |                |  | Total  |  |   | ComprehensiveIncome(Loss) | 
|                                                                                 |  | NumberofShares         |   |  | Amount                    |         |                     | NumberofShares    |       |                  | Amount |   |                                           | NumberofShares |  | Amount |  |   |                           | 
|BALANCEDECEMBER 31, 2007                                                        |  | 653                    |   |  | $                         | 392,603 |                     |                   | 7,815 |                  |        | $ | 4,698,608                                 |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Net loss                                                                         |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  | $ | (45,749 | ) |  |   |        |   |  | $ | (45,749 | ) |  | $ | (45,749 | )
|Change in fair value of interest rate swap (net of income tax benefit of $2,428) |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  | $ | (4,714 | ) |  |   | (4,714  | ) |  |   | (4,714  | )
|Unrealized gain on investments (net of income tax of $5,785)                     |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   | 11,228 |   |  |   | 11,228  |   |  |   | 11,228  |  
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Total comprehensive loss                                                         |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  | $ | (39,235 | )
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Redeemable Shares issued                                                         |  |                        |   |  |                           |         |                     |                   | 93    |                  |        |   | 53,145                                    |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Class A Common Shares exchanged for Class B Commons Shares                       |  | (3                     | ) |  |                           | (1,698  | )                   |                   | 3     |                  |        |   | 1,698                                     |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Redeemable Shares repurchased                                                    |  | (4                     | ) |  |                           | (2,367  | )                   |                   | (44   | )                |        |   | (26,037                                   | )              |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|Dilution of shares to redemption value                                           |  |                        |   |  |                           | (3,297  | )                   |                   |       |                  |        |   | (35,938                                   | )              |  |        |  |   |                           |  |   | 45,749  |   |  |   | (6,514 | ) |  |   | 39,235  |   |  |   |         |  
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  
|BALANCEJUNE 30, 2008                                                            |  | 646                    |   |  | $                         | 385,241 |                     |                   | 7,867 |                  |        | $ | 4,691,476                                 |                |  |        |  | $ |                           |  | $ |         |   |  | $ |        |   |  | $ |         |   |  |   |         |  
|                                                                                 |  |                        |   |  |                           |         |                     |                   |       |                  |        |   |                                           |                |  |        |  |   |                           |  |   |         |   |  |   |        |   |  |   |         |   |  |   |         |  

See notes to unaudited condensed consolidated financial statements.



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##### Table of Contents

DCP HOLDING COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)





|                                                                         |  |                                  |            |   |      |   |             |  
|------------------------------------------------------------------------ |  | -------------------------------- | ---------- | - | ---- | - | ----------- | -
|                                                                         |  | For the Six Months EndedJune 30, |           
|                                                                         |  | 2009                             |            |   | 2008 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                    |  |                                  |            |   |      |   |             |  
|Net loss on redeemable shares                                            |  | $                                | (99,108    | ) |      | $ | (45,749     | )
|Adjustments to reconcile net loss to net cash from operating activities: |  |                                  |            |   |      |   |             |  
|Depreciation and amortization                                            |  |                                  | 224,711    |   |      |   | 210,559     |  
|Deferred compensation                                                    |  |                                  | 146,988    |   |      |   | 125,642     |  
|Effects of changes in operating assets and liabilities:                  |  |                                  |            |   |      |   |             |  
|Accrued investment income                                                |  |                                  | 10,708     |   |      |   | 14,056      |  
|Accounts receivable                                                      |  |                                  | 91,125     |   |      |   | 109,733     |  
|Unbilled accounts receivable                                             |  |                                  | (6,870,767 | ) |      |   | (26,737,274 | )
|Reinsurance recoverable on paid losses                                   |  |                                  |            |   |      |   | (9,480      | )
|Deferred acquisition costs                                               |  |                                  | (494,144   | ) |      |   | (1,340,562  | )
|Other assets                                                             |  |                                  | (228,900   | ) |      |   | 861         |  
|Claims payable                                                           |  |                                  | (860,089   | ) |      |   | (249,895    | )
|Unearned premium revenue                                                 |  |                                  | 7,103,365  |   |      |   | 26,955,282  |  
|Other payables and accruals                                              |  |                                  | (54,314    | ) |      |   | 972,786     |  
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|Net cash provided by (used in) operating activities                      |  |                                  | (1,030,425 | ) |      |   | 5,959       |  
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|CASH FLOWS FROM INVESTING ACTIVITIES:                                    |  |                                  |            |   |      |   |             |  
|Purchases of investments                                                 |  |                                  | (8,278,383 | ) |      |   | (8,914,803  | )
|Sales and maturities of investments                                      |  |                                  | 9,019,758  |   |      |   | 9,025,132   |  
|Acquisition of property and equipment                                    |  |                                  | (44,916    | ) |      |   | (246,767    | )
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|Net cash provided by (used in) investing activities                      |  |                                  | 696,459    |   |      |   | (136,438    | )
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|CASH FLOWS FROM FINANCING ACTIVITIES:                                    |  |                                  |            |   |      |   |             |  
|Mortgage loan repayments                                                 |  |                                  | (60,000    | ) |      |   | (60,000     | )
|Repayment of capital lease                                               |  |                                  | (19,253    | ) |      |   | (110,119    | )
|Repurchase of redeemable shares                                          |  |                                  | (110,642   | ) |      |   | (19,366     | )
|Redeemable shares issued                                                 |  |                                  | 165,115    |   |      |   | 28,178      |  
|Issuance cost for redeemable shares                                      |  |                                  | (7,025     | ) |      |   |             |  
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|Net cash used in financing activities                                    |  |                                  | (31,805    | ) |      |   | (161,307    | )
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|DECREASE IN CASH AND CASH EQUIVALENTS                                    |  |                                  | (365,771   | ) |      |   | (291,786    | )
|                                                                         |  |                                 
|CASH AND CASH EQUIVALENTSBeginning of period                            |  |                                  | 2,527,946  |   |      |   | 2,262,888   |  
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|CASH AND CASH EQUIVALENTSEnd of period                                  |  | $                                | 2,162,175  |   |      | $ | 1,971,102   |  
|                                                                         |  |                                  |            |   |      |   |             |  
|                                                                         |  |                                 
|SUPPLEMENTAL CASH FLOW INFORMATION                                       |  |                                  |            |   |      |   |             |  
|Cash paid for interest                                                   |  | $                                | 31,000     |   |      | $ | 37,544      |  
|Cash paid for income taxes                                               |  |                                  | 296,000    |   |      |   | 65,000      |  
|                                                                         |  |                                 
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                             |  |                                  |            |   |      |   |             |  
|Redeemed common shares in other payables and accruals                    |  | $                                | 39,659     |   |      | $ | 9,038       |  
|Redeemable common shares issued in lieu of cash payment of compensation  |  |                                  |            |   |      |   | 24,967      |  

See notes to unaudited condensed consolidated financial statements.



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DCP HOLDING COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2009 (UNAUDITED)





|1. | BASIS OF PRESENTATION
|-- | ---------------------

The condensed consolidated
interim financial statements included in this report have been prepared by DCP Holding Company and subsidiaries (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the
Commission). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation are reflected in the interim financial statements. These unaudited condensed consolidated financial
statements should be read in conjunction with the audited 2008 financial statements and notes thereto as included in the DCP Holding Company Form 10-K for the year ended December 31, 2008 filed with the Commission on March 17, 2009. These
unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial statements. Certain financial information that is required in
the annual financial statements may not be required for interim financial reporting purposes and has been condensed or omitted. Operating results for the three and six months ended June 30, 2009 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2009.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

The interim condensed consolidated financial statements have been prepared in accordance with the accounting policies described in the notes to the Companys consolidated financial statements for the year ended December 31,
2008. While management believes that the procedures followed in preparation of interim financial information are reasonable the accompanying condensed consolidated financial statements include estimates for items such as changes in claims payable,
deferred tax accounts, deferred acquisition costs, and accrued expenses, among others. Actual results could differ from these estimates. Any adjustments related to such estimates during the fiscal quarter were of a normal recurring nature.

Premium Revenue

Fully-InsuredMembership contracts are written on an annual basis and are subject to cancellation by the employer group upon thirty days written notice. The Company amended its fully-insured dental HMO contracts and dental
indemnity contracts to be non-cancelable by the Company effective May 1, 2008 and its fully-insured dental PPO contracts to be non-cancelable by the Company effective June 1, 2008. The Companys unearned premium revenue was
approximately $28,709,000 and $21,606,000 at June 30, 2009 and December 31, 2008, respectively. The unearned premium revenue related to the estimated premium revenue associated with the remaining contract periods and related amounts
recorded in unbilled accounts receivable were approximately $27,716,000 and $20,845,000 at June 30, 2009 and December 31, 2008, respectively. Premiums are due monthly in advance and are recognized evenly as revenue during the period in
which the Company is obligated to provide services to members. Any amounts not received by the end of a reporting period are recorded as accounts receivable by the Company. Any premiums received prior to the beginning of a reporting period are
recognized as premiums received in advance and are included in unearned premium revenue in the accompanying condensed consolidated balance sheets. Premiums received in advance were approximately $993,000 and $761,000 at June 30, 2009 and
December 31, 2008, respectively. Management has determined that as of June 30, 2009 and December 31, 2008, respectively, no premium deficiency reserve is required.

Self-InsuredThe Company provides administrative and claims processing services, benefit plan design, and access to its provider networks for
an administrative fee, generally, to self-insured groups. The Company has no underwriting risk arising from the provision or cost of any services provided to the self-insured groups. Consistent with the provisions of Financial Accounting Standards
Board (FASB) Emerging Issues Task Force (EITF) 99-19, Recording Revenue Gross as a Principal Versus Net as an Agent, the Company recognizes and records self-insured premiums on a gross basis because: (i) the
Company is the primary obligor in its contractual relationships with self-insured employers and dental service providers, (ii) the Company establishes the pricing for the services provided, (iii) the Company controls the selection of and
the relationships with the dental service providers, and (iv) the Company is involved in the determination of dental service specifications. Self-insured premium revenue is recognized upon the payment of claims for self-insured members in
accordance with agreements with self-insured employers and is included in premium revenue in the accompanying condensed consolidated statements of operations.



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Third-party administration fee revenue (ASO fees) is recognized monthly when earned and is
normally based on annual contracts with the self-insured groups. ASO fees are charged to self-insured employer groups monthly on a per subscriber per month basis. ASO fees also include the administrative fees the Company earns relative to the dental
PPO, dental indemnity and vision products that are underwritten by third-party insurance carriers.

Healthcare Services
Expense The Company compensates its providers based on contractual reimbursement for various services. With respect to the dental HMO product, the Company generally retains 10% of this reimbursement (including payments on self-insured
claims) in accordance with the Companys provider agreements. Healthcare services expense is recorded net of any amounts withheld in the accompanying condensed consolidated statements of operations. Under the terms of the Companys
provider agreement, the Company is not obligated to return to providers any amounts withheld. Withheld amounts are retained by the Company but not reserved or retained in a separate fund. Participating providers have no interest in the amounts
withheld unless the Companys Board of Directors (the Board) authorizes any amount to be paid to the providers.

The cost
of healthcare services provided to members is accrued in the period such services are provided based on the accumulation of estimates of claims reported prior to the end of a reporting period and of estimates of dental services provided but not
reported to the Company, net of the amounts withheld in accordance with the provider agreements.

Managements estimates of dental
services provided are based on the Companys historical experience and current trends, with assistance from the Companys consulting actuary. Estimated dental claims payable are reviewed monthly by management and are adjusted based on
current information, actual paid claims data, dental utilization statistics and other pertinent information. However, final claim payments may differ from the established reserves. Any resulting adjustments are reflected in current operations.

Each year the Board evaluates the performance of the dental HMO plan, capital and surplus requirements prescribed by the Ohio Department
of Insurance, factors affecting the Companys financial strength rating, funding needed to support strategic objectives for the coming years and any other factors deemed relevant by the Board and, based on that evaluation, determines whether or
not to authorize the payment to the providers of any portion of the provider withhold. Once authorized by the Board, such amounts are recorded as additional healthcare services expense in the period authorized and shown as additional claims payable
liability until paid.

Deferred Acquisition CostsDeferred acquisition costs are those costs that vary with and are
primarily related to the acquisition of new and renewal business. Such costs include commissions, costs of contract issuance and underwriting, premium taxes and other costs the Company incurs to acquire new business or renew existing business.
Effective May 1, 2008, the Company began deferring policy acquisition costs and amortizing them over the estimated life of the contracts, which are generally short-duration in nature, in proportion to premiums earned. The Company capitalized
deferred acquisition costs of approximately $409,000 and $1,663,000 and amortized approximately $679,000 and $322,000 of capitalized costs for the three months ended June 30, 2009 and 2008, respectively, and capitalized $1,833,000 and
$1,663,000 and amortized approximately $1,339,000 and $322,000 for the six months ended June 30, 2009 and 2008, respectively. These amounts are recorded in commission expense and other acquisition costs included in the Condensed Consolidated
Statements of Operations. Prior to the dates of the amendment of our contracts to be non-cancelable, all costs were expensed as incurred.

Use of EstimatesThe preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from
those estimates.



|3. | NEW ACCOUNTING PRONOUNCEMENTS
|-- | -----------------------------

In December 2007,
the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141(R), Business Combinations. SFAS No. 141(R) changes the accounting for business
combinations, including the measurement of acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for preacquisition gain and loss contingencies, the recognition of capitalized
in-process research and development, the accounting for acquisition-related restructuring cost accruals, the treatment of acquisition-related transaction costs and the recognition of changes in the acquirers income tax valuation allowance.
SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for certain tax adjustments for
prior business combinations. The adoption of SFAS No. 141(R) did not have a material effect on the Companys consolidated financial position or results of operations.



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In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51. SFAS No. 160 changes the accounting for noncontrolling (minority) interests in consolidated financial statements, including the requirement to classify noncontrolling interests as a
component of consolidated stockholders equity, and the elimination of minority interest accounting in results of operations with earnings attributable to noncontrolling interests reported as part of consolidated earnings.
Additionally, SFAS 160 revises the accounting for both increases and decreases in a parents controlling ownership interest. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The adoption of SFAS
No. 160 did not have a material effect on the Companys consolidated financial position or results of operations.

In March 2008,
the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of SFAS No. 133. SFAS No. 161 requires enhanced disclosures for derivative instruments and hedging activities
regarding the impact on financial position, financial performance, and cash flows. This statement encourages but does not require comparative disclosures for earlier periods upon initial adoption. The effective date of SFAS 161 is the Companys
fiscal year beginning on or after January 1, 2009. The adoption of SFAS No. 161 did not have a material effect on the Companys disclosures.

In April 2008, the FASB issued FASB Staff Position (FSP) 142-3,Determination of the Useful Lives of Intangible Assets. This FSP amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between
the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset. This FSP is effective for consolidated financial statements issued for fiscal years beginning
after December 15, 2008. The adoption of SFAS No. 142-3 did not have a material effect on the Companys useful lives of intangible assets and on the Companys consolidated financial position or results of operations.

In April 2009, the FASB issued FSP 107-1/Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value of
Financial Instruments. FSP 107-1/APB 28-1 amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments and APB 28, Interim Financial Reporting. FSP 107-1/APB28-1 extends the disclosure of SFAS
No. 107 to interim financial statements. FSP 107-1/APB 28-1 is effective for interim periods ending after June 15, 2009. The Company adopted FSP 107-1/APB28-1 and the required disclosure is included in Fair Value Measurements (Note 8).

In April 2009, the FASB issued FSP 115-2, Recognition and Presentation of Other-Than-Temporary Impairments. FSP 115-2
revised the guidance for determining whether an impairment is other-than-temporary for debt securities, requires bifurcation of any other-than-temporary impairment between the amount representing credit loss and the amount related to all other
factors and requires additional disclosures on other-than-temporary impairment of debt and equity securities. FSP 115-2 is effective for interim and annual reporting periods ending after June 15, 2009. The adoption of FSP 115-2 did not have a
material effect on the Companys consolidated financial position or results of operations.

In April 2009, the FASB issued FSP
157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. FSP 157-4 is an amendment of SFAS No. 157, Fair
Value Measurements. FSP 157-4 provides additional guidance on estimating fair value when the volume and level of activity for an asset or liability have significantly decreased in relation to normal market activity for the asset or liability,
provides guidance on circumstances that may indicate that a transaction is not orderly and requires additional disclosures about fair value measurements in annual and interim reporting periods. FSP 157-4 is effective for interim and annual periods
ending after June 15, 2009. The adoption of FSP 157-4 did not have a material effect on the Companys consolidated financial position or results of operations.

In May 2009, the FASB issued No. SFAS 165, Subsequent Events. SFAS No. 165 sets forth general standards of accounting for and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued. SFAS 165 is effective for periods ending after June 15, 2009. The adoption of SFAS No. 165 did not have an effect on our consolidated financial condition,
results of operations or related disclosures. The Company evaluated subsequent events through August 12, 2009.

In
June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162. SFAS No. 168 establishes the
FASB Accounting Standards Codification as the single source of authoritative accounting principles in the preparation of financial statements in conformity with GAAP. SFAS No. 168 explicitly recognizes rules and interpretive releases
of the Securities and Exchange Commission (SEC) under federal securities laws as authoritative GAAP for SEC registrants. SFAS 168 is effective for financial statements issued for periods ending after September 15, 2009 and we
do not expect the adoption to have a material effect, if any, on our consolidated financial condition and results of operations.



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|4. | INVESTMENTS
|-- | -----------

The Company owned FDIC insured
certificates of deposit with a cost of $1,800,000 and $1,909,000 as of June 30, 2009 and December 31, 2008, respectively. Each certificate of deposit is invested with a separate FDIC-insured financial institution. As of June 30, 2009,
six certificates of deposit with a cost of $700,000 and a fair value of $701,036 have maturities between 13 and 18 months and eleven certificates of deposit with a cost of $1,100,000 and a fair value of $1,115,985 have a maturities less than 12
months. As of December 31, 2008, nine certificates of deposit with a cost of $900,000 and a fair value of $909,987 have maturities between 13 and 18 months and eleven certificates of deposit with a cost of $1,009,000 and a fair value of
$1,021,920 have a maturities less than 12 months. The Company also invests in a money market fund with a cost of $4,001,624 and $4,634,000 as of June 30, 2009 and December 31, 2008, respectively. These short-term and fixed maturities
investments are classified as available-for-sale and are carried at fair value, which is based on quoted market prices for similar assets. The unrealized gains and losses on investment activity are due to a change in the quoted market prices for
these certificates of deposit caused by an changes in prevailing interest rates since they were purchased. There were no realized gains or losses for the six months ended June 30, 2009 and 2008.

Investments classified at June 30, 2009 and December 31, 2008, as fixed maturities and short-term assets were as follows:



|                                         |  |      |           |                     |   |                     |  |           |       |  |   |          
|---------------------------------------- |  | ---- | --------- | ------------------- | - | ------------------- |  | --------- | ----- |  | - | ---------
|June 30, 2009                            |  | Cost |           | GrossUnrealizedGain |   | GrossUnrealizedLoss |  | FairValue
|Money market                             |  | $    | 4,001,624 |                     |   |                     |  |           |       |  | $ | 4,001,624
|Certificates of depositshort term       |  |      | 1,100,000 |                     | $ | 15,985              |  |           |       |  |   | 1,115,985
|Certificates of depositfixed maturities |  |      | 700,000   |                     |   | 2,822               |  | $         | 1,786 |  |   | 701,036  
|                                         |  |      |           |                     |   |                     |  |           |       |  |   |          
|                                         |  |      |           |                    
|Total investments                        |  | $    | 5,801,624 |                     | $ | 18,807              |  | $         | 1,786 |  | $ | 5,818,645
|                                         |  |      |           |                     |   |                     |  |           |       |  |   |          
|                                         |  |      |           |                    
|December 31, 2008                        |  | Cost |           | GrossUnrealizedGain |   | GrossUnrealizedLoss |  | FairValue
|Money market                             |  | $    | 4,634,000 |                     |   |                     |  |           |       |  | $ | 4,634,000
|Certificates of depositshort term       |  |      | 1,009,000 |                     | $ | 12,920              |  | $         |       |  |   | 1,021,920
|Certificates of depositfixed maturities |  |      | 900,000   |                     |   | 9,987               |  |           |       |  |   | 909,987  
|                                         |  |      |           |                     |   |                     |  |           |       |  |   |          
|                                         |  |      |           |                    
|Total investments                        |  | $    | 6,543,000 |                     | $ | 22,907              |  | $         |       |  | $ | 6,565,907
|                                         |  |      |           |                     |   |                     |  |           |       |  |   |          



|5. | DEFERRED COMPENSATION PLAN
|-- | --------------------------

Under the fair value
recognition provisions of SFAS No. 123R, Accounting for Stock-Based Compensation, share-based compensation cost is measured at the grant date based on the fair value of the liability awards and is recognized as expense ratably over
the vesting periods. The fair value of the liability awards are remeasured at the end of each reporting period through the remaining vesting period with the change in fair value recognized in earnings currently.

In accordance with the 2006 Dental Care Plus Management Equity Incentive Plan and the Dental Care Plus, Inc. and DCP Holding Company Deferred
Compensation Plan (the Plans), Company directors and certain key employees elected to defer portions of their director fees and employee compensation, as applicable. The Company recorded expense of approximately $24,000 and $22,000
related to deferred director fees and deferred employee compensation for the three months ended June 30, 2009 and 2008, respectively. For the six months ended June 30, 2009 and 2008, the Company recorded expense related to deferred
director fees and deferred employee compensation of approximately $57,000 and $55,000, respectively. Directors and key employees who elect to defer cash compensation may request that the Company invest this compensation in phantom shares of the
Company. The Plans also provide for the directors and key employees to receive awards based on the book value of the Redeemable Common Shares and to elect to defer receiving such amounts until termination of board membership or employment and
vesting requirements are met. If a



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director or key employee does not elect to defer receiving his or her share awards, the individual will receive Class B Redeemable Common Shares upon
vesting. If the share awards are deferred, these deferred amounts will be paid in cash. An individual directors award vests 100% at the end of each year if the director meets the board meeting attendance requirements. The key employee awards
vest 10%, 20%, 30% and 40% at the end of each respective year in a four-year period following the grant date. There are no performance criteria associated with the vesting of the awards for key employees. The only requirement for vesting is that the
individual is an employee of the Company at the end of the vesting year in question. The deferred compensation expense related to these awards is recorded ratably during the applicable vesting period. For the three months ended June 30, 2009
and 2008, respectively, the Company recorded deferred compensation expense of approximately $56,000 and $51,000 related to deferred share awards and the change in the value of phantom shares. For the six months ended June 30, 2009 and 2008,
respectively, the Company recorded deferred compensation expense of approximately $126,000 and $110,000 related to deferred share awards and the change in the value of phantom shares. As of June 30, 2009 there is approximately $297,000 of total
unrecognized compensation cost related to non-vested award compensation under the Plans. That cost is expected to be recognized over a weighted average period of 1.8 years.

The expected fair value of the awards are calculated by applying the three year annual historical average growth rate of the book value per redeemable
common share over the respective vesting period. The weighted average grant date fair value of the awards granted in the three and six months ended June 30, 2009 and 2008 were $801 and $680, respectively. There was no vesting of awards for the
three and six months ended June 30, 2009 and 2008.

The following is a summary of activity of non-vested awards for the three months
and six months ended June 30, 2009:



|                                     |  |                            |  |                                     |     |                    |       |                                     |   |    
|------------------------------------ |  | -------------------------- |  | ----------------------------------- | --- | ------------------ | ----- | ----------------------------------- | - | ---
|                                     |  | IndividualDirectorsAwards |  | WeightedAverage GrantDate FairValue |     | Key EmployeeAwards |       | WeightedAverage GrantDate FairValue
|Non-vested awards at January 1, 2009 |  |                            |  |                                     |     |                    | 134.2 |                                     | $ | 705
|Granted                              |  | 324.0                      |  | $                                   | 753 |                    | 80.0  |                                     |   | 998
|Vested                               |  |                            |  |                                     |     |                    |       |                                     |   |    
|                                     |  |                            |  |                                     |     |                    |       |                                     |   |    
|Non-vested awards at June 30, 2009   |  | 324.0                      |  | $                                   | 753 |                    | 214.2 |                                     | $ | 815
|                                     |  |                            |  |                                     |     |                    |       |                                     |   |    



|6. | EARNINGS (LOSS) PER REDEEMABLE COMMON SHARE
|-- | -------------------------------------------

Detail
supporting the computation of loss per redeemable common share was as follows for the three and six months ended June 30, 2009 and 2008, respectively:



|                                                                                                                                  |  |                            |        |                          |   |         |  |   |          |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | ------------------------ | - | ------- |  | - | -------- | - |  | - | ------- | -
|                                                                                                                                  |  | Three Months EndedJune 30, |        | Six Months EndedJune 30, |  
|                                                                                                                                  |  | 2009                       |        | 2008                     |   | 2009    |  |   | 2008     |  
|Net income (loss) on redeemable shares                                                                                            |  | $                          | 53,009 |                          | $ | 250,335 |  | $ | (99,108  | ) |  | $ | (45,749 | )
|                                                                                                                                  |  |                            |        |                         
|Less net income accretive to redeemable preferred shareholders                                                                    |  |                            | 1,352  |                          |   |         |  |   | 1,352    |   |  |   |         |  
|                                                                                                                                  |  |                            |        |                          |   |         |  |   |          |   |  |   |         |  
|                                                                                                                                  |  |                            |        |                         
|Net income (loss) accretive (dilutive) to redeemable common shareholders                                                          |  | $                          | 51,657 |                          | $ | 250,335 |  | $ | (100,460 | ) |  | $ | (45,749 | )
|                                                                                                                                  |  |                            |        |                          |   |         |  |   |          |   |  |   |         |  
|                                                                                                                                  |  |                            |        |                         
|Weighted average outstanding redeemable common shares used to compute basic and diluted income (loss) per redeemable common
share |  |                            | 8,319  |                          |   | 8,457   |  |   | 8,352    |   |  |   | 8,452   |  
|                                                                                                                                  |  |                            |        |                          |   |         |  |   |          |   |  |   |         |  
|                                                                                                                                  |  |                            |        |                         
|Basic and diluted income (loss) per redeemable common share                                                                       |  | $                          | 6.21   |                          | $ | 29.60   |  | $ | (12.03   | ) |  | $ | (5.41   | )
|                                                                                                                                  |  |                            |        |                          |   |         |  |   |          |   |  |   |         |  

There have been no restricted share awards granted that would have a dilutive effect on the Companys basic
earnings per share for the three and six months ended June 30, 2009 and 2008.



|7. | REDEEMABLE PREFERRED SHARES
|-- | ---------------------------

The Board designated
and approved for issuance the Provider Preferred Shares-2009 Series that includes 5,000 preferred shares



9



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##### Table of Contents

out of the 100,000 preferred shares authorized. These Provider Preferred Shares may only be purchased by a participating dentist in the Companys dental
plans or retired participating dentists that own at least 12 Redeemable Common Shares. The Provider Preferred Shares are considered to be redeemable preferred shares due to the fact that the shareholders have the option to require the Company to
repurchase these shares upon their death, permanent disability or retirement. The Company records the provider preferred shares as Redeemable Preferred shares in the consolidated balance sheets outside of shareholders equity at the redemption
value of the preferred shares. Accordingly, the Company records any net income (loss) or other comprehensive income (loss) as a change to the redemption value to each of the Redeemable Common Shares and Redeemable Provider Preferred Shares to
accrete the carrying value of the Redeemable Common Shares and Redeemable Provider Preferred Shares to the redemption value at the end of each reporting period. Under this method, the end of the reporting period is treated as if it were also the
redemption date for the security. The holders of Redeemable Provider Preferred Shares are entitled to a cumulative cash dividend equal to 5% of the year end book value of the Redeemable Provider Preferred Shares to be paid upon declaration by the
Board of Directors.



|8. | SEGMENT INFORMATION
|-- | -------------------

The Company manages its
business with three reportable segments: fully-insured dental, self-insured dental and corporate, all other. Fully-insured dental consists of the fully-insured DHMO, fully-insured PPO and fully-insured indemnity products. Self-insured dental
consists of the self-insured DHMO, self-insured PPO and self-insured indemnity products. Corporate, all other consists of revenue associated with our dental PPO and vision products underwritten by third-party insurance carriers and certain other
corporate activities. The Company identifies the segments in accordance with SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. These segments are consistent with information used by the Chief
Executive Officer (the chief decision maker) in managing the business. The segment information aggregates products with similar economic characteristics. These characteristics include the nature of employer groups and pricing, benefits and
underwriting requirements.

The results of the fully-insured and self-insured dental segments are measured by gross profit. The Company
does not allocate insurance expense, investment and other income, goodwill, or other assets or liabilities to these segments. The Companys gross profit was approximately $3,164,000 and $3,109,000 for the three months ended June 30, 2009
and 2008, respectively, and was $5,987,000 and $5,721,000 for the six months ended June 30, 2009 and 2008, respectively.

Listed below
is financial information required to be reported for each industry segment for the three and six months ended June 30, 2009 and 2008 (amounts in thousands):



|                         |  |                                 |        |                                 |   |        |  |                            |        |                           |   |        |  |   |        |  |   |       
|------------------------ |  | ------------------------------- | ------ | ------------------------------- | - | ------ |  | -------------------------- | ------ | ------------------------- | - | ------ |  | - | ------ |  | - | ------
|                         |  | Three Months EndedJune 30, 2009 |        | Three Months EndedJune 30, 2008
|                         |  | Revenues-ExternalCustomers      |        | HealthcareServicesExpense       |   | Total  |  | Revenues-ExternalCustomers |        | HealthcareServicesExpense |   | Total 
|Reportable segments:     |  |                                 |        |                                 |   |        |  |                            |        |                           |   |        |  |   |        |  |   |       
|Fully-insured dental     |  | $                               | 11,194 |                                 | $ | 8,985  |  | $                          | 2,209  |                           | $ | 9,796  |  | $ | 7,695  |  | $ | 2,101 
|Self-insured dental      |  |                                 | 6,321  |                                 |   | 5,461  |  |                            | 860    |                           |   | 6,215  |  |   | 5,322  |  |   | 893   
|Corporate, all other     |  |                                 | 95     |                                 |   |        |  |                            | 95     |                           |   | 115    |  |   |        |  |   | 115   
|                         |  |                                 |        |                                 |   |        |  |                            |        |                           |   |        |  |   |        |  |   |       
|Total                    |  | $                               | 17,610 |                                 | $ | 14,446 |  |                            | 3,164  |                           | $ | 16,126 |  | $ | 13,017 |  |   | 3,109 
|                         |  |                                 |        |                                 |   |        |  |                            |        |                           |   |        |  |   |        |  |   |       
|                         |  |                                 |        |                                 |   |       
|Investment income        |  |                                 |        |                                 |   |        |  |                            | 28     |                           |   |        |  |   |        |  |   | 52    
|Other income             |  |                                 |        |                                 |   |        |  |                            | 17     |                           |   |        |  |   |        |  |   | 12    
|                         |  |                                 |        |                                 |   |       
|Insurance expense        |  |                                 |        |                                 |   |        |  |                            | 3,127  |                           |   |        |  |   |        |  |   | 2,787 
|                         |  |                                 |        |                                 |   |        |  |                            |        |                           |   |        |  |   |        |  |   |       
|                         |  |                                 |        |                                 |   |       
|Income before income tax |  |                                 |        |                                 |   |        |  | $                          | 82     |                           |   |        |  |   |        |  | $ | 386   
|                         |  |                                 |        |                                 |   |        |  |                            |        |                           |   |        |  |   |        |  |   |       
|                         |  |                                 |        |                                 |   |       
|Total assets-corporate   |  |                                 |        |                                 |   |        |  | $                          | 41,714 |                           |   |        |  |   |        |  | $ | 39,889
|                         |  |                                 |        |                                 |   |        |  |                            |        |                           |   |        |  |   |        |  |   |       



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|                                |  |                               |        |                           |                               |        |  |   |                            |   |                           |   |        |  |   |        |  |   |        |  
|------------------------------- |  | ----------------------------- | ------ | ------------------------- | ----------------------------- | ------ |  | - | -------------------------- | - | ------------------------- | - | ------ |  | - | ------ |  | - | ------ | -
|                                |  | Six Months EndedJune 30, 2009 |        |                           | Six Months EndedJune 30, 2008 |       
|                                |  | Revenues-ExternalCustomers    |        | HealthcareServicesExpense |                               | Total  |  |   | Revenues-ExternalCustomers |   | HealthcareServicesExpense |   | Total  | 
|Reportable segments:            |  |                               |        |                           |                               |        |  |   |                            |   |                           |   |        |  |   |        |  |   |        |  
|Fully-insured dental            |  | $                             | 22,327 |                           | $                             | 18,245 |  | $ | 4,082                      |   |                           | $ | 19,183 |  | $ | 15,476 |  | $ | 3,707  |  
|Self-insured dental             |  |                               | 12,484 |                           |                               | 10,778 |  |   | 1,706                      |   |                           |   | 12,225 |  |   | 10,463 |  |   | 1,762  |  
|Corporate, all other            |  |                               | 199    |                           |                               |        |  |   | 199                        |   |                           |   | 252    |  |   |        |  |   | 252    |  
|                                |  |                               |        |                           |                               |        |  |   |                            |   |                           |   |        |  |   |        |  |   |        |  
|Total                           |  | $                             | 35,010 |                           | $                             | 29,023 |  |   | 5,987                      |   |                           | $ | 31,660 |  | $ | 25,939 |  |   | 5,721  |  
|                                |  |                               |        |                           |                               |        |  |   |                            |   |                           |   |        |  |   |        |  |   |        |  
|                                |  |                               |        |                           |                               |       
|Investment income               |  |                               |        |                           |                               |        |  |   | 63                         |   |                           |   |        |  |   |        |  |   | 118    |  
|Other income                    |  |                               |        |                           |                               |        |  |   | 38                         |   |                           |   |        |  |   |        |  |   | 26     |  
|                                |  |                               |        |                           |                               |       
|Insurance expense               |  |                               |        |                           |                               |        |  |   | 6,242                      |   |                           |   |        |  |   |        |  |   | 5,936  |  
|                                |  |                               |        |                           |                               |        |  |   |                            |   |                           |   |        |  |   |        |  |   |        |  
|                                |  |                               |        |                           |                               |       
|Income (loss) before income tax |  |                               |        |                           |                               |        |  | $ | (154                       | ) |                           |   |        |  |   |        |  | $ | (71    | )
|                                |  |                               |        |                           |                               |        |  |   |                            |   |                           |   |        |  |   |        |  |   |        |  
|                                |  |                               |        |                           |                               |       
|Total assets-corporate          |  |                               |        |                           |                               |        |  | $ | 41,714                     |   |                           |   |        |  |   |        |  | $ | 39,889 |  
|                                |  |                               |        |                           |                               |        |  |   |                            |   |                           |   |        |  |   |        |  |   |        |  

Inter-segment revenues were not significant for the three and six months ended June 30, 2009
and 2008.



|9. | FAIR VALUE MEASUREMENTS
|-- | -----------------------

In accordance with SFAS
No. 157 Fair Value Measurements as amended, the Company classified the assets and liabilities that require measurement of fair value on a recurring basis based on the priority of the observable and market-based sources of
data into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Company
has not changed its valuation techniques from December 31, 2008. The three levels of the fair value hierarchy defined by SFAS No. 157 are as follows:



| |  |  | Level 1  Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2  Valuations based on significant other observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities,
quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3  Valuations based on unobservable inputs such as when observable inputs are not available or inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or liabilities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11



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##### Table of Contents

The following table presents for each of the fair value levels, the Companys assets that are
measured at fair value on a recurring basis as of June 30, 2009 (amounts in thousands):



|                                      |  |         |       |         |   |               |  |   |      
|------------------------------------- |  | ------- | ----- | ------- | - | ------------- |  | - | -----
|                                      |  | Level 1 |       | Level 2 |   | Total Balance
|Assets                                |  |         |       |         |   |               |  |   |      
|Fixed maturities (a)                  |  |         |       |         | $ | 701           |  | $ | 701  
|Short-term investments (b)            |  | $       | 4,002 |         |   | 1,116         |  |   | 5,118
|Deferred compensation investments (c) |  |         | 170   |         |   |               |  |   | 170  
|State guarantee fund deposits (c)     |  |         | 244   |         |   | 50            |  |   | 294  
|                                      |  |         |       |         |   |               |  |   |      
|Total                                 |  | $       | 4,416 |         | $ | 1,867         |  | $ | 6,283
|                                      |  |         |       |         |   |               |  |   |      
|                                      |  |         |      
|Liabilities                           |  |         |       |         |   |               |  |   |      
|Interest rate swap (d)                |  |         |       |         | $ | 23            |  | $ | 23   
|                                      |  |         |       |         |   |               |  |   |      
|Total                                 |  | $       |       |         | $ | 23            |  | $ | 23   
|                                      |  |         |       |         |   |               |  |   |      

| | 
| | 

| | (a) | Invested in Federally-Insured certificates of deposits
| | --- | ------------------------------------------------------

| | (b) | Invested in Federally-Insured certificates of deposits and actively traded money market funds
| | --- | ---------------------------------------------------------------------------------------------

| | (c) | Included in other assets
| | --- | ------------------------

| | (d) | Included in other payables and accruals
| | --- | ---------------------------------------

Certain assets
and liabilities are measured at fair value on a non-recurring basis, and therefore, are not included in the table above. These include long-lived assets such as certain plant, property and equipment items, intangible assets and goodwill, as well as
assets measured at cost that are written down to fair value during a period as a result of an impairment. For the three and six months ended June 30, 2009, there were no assets or liabilities that were required to be measured at fair value on a
non-recurring basis.

In 2003, the Company purchased land and an office building and in connection therewith, the Company executed a
mortgage note, secured by the land and the office building, with a bank in the amount of $1,800,000. Interest is payable based on the 30-day LIBOR rate plus 1.75% and was 2.07% and 3.19% at June 30, 2009 and December 31, 2008,
respectively. At June 30, 2009, the fair value of the mortgage note is approximately $1,163,000.

In 2008, the Company executed a
revolving note with a commercial bank in the amount of $650,000 collateralized by a second mortgage on the office building. There was a principal balance outstanding of $630,000 at June 30, 2009 and December 31, 2008. Interest is payable
based on the 30-day LIBOR rate plus 1.75% and was 2.07% and 3.19% at June 30, 2009 and December 31, 2008, respectively. At June 30, 2009, the carrying value of the revolving note approximates fair value.



|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Forward-Looking statements

Portions of this report, including this discussion and the information
contained in the notes to the condensed consolidated financial statements contain forward-looking statements under the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as may,
might, will, should, could, would, expect, plan, anticipate, believe, estimate, project, predict,
intend, potential, likely will result, or the negative of such terms or similar expressions. These forward-looking statements reflect our current expectations and views about future events and speak only as of the
date of this report. The forward-looking statements are subject to risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. Important
factors that could cause actual results to differ materially from those in the forward-looking statements, include, among others: claims costs exceeding our estimates, a downgrade in our financial strength rating, competitive pressures, changes in
demand for dental benefits and other economic conditions, the loss of a significant customer or broker, the occurrence or non-occurrence of circumstances beyond our control and those items described in Item 1A  Risk Factors of the
Companys Form 10-K for the fiscal year ended December 31, 2008. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the
date this report is filed.



12



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Overview

Headquartered in Cincinnati, Ohio, we offer to employer groups of two or more employees dental HMO, dental PPO, dental indemnity and vision PPO benefit plans and related services. As of June 30, 2009, we had approximately 262,400
members in our dental and vision benefit programs with approximately 2,287 dentists participating in our networks of providers.

We manage
our business with three reportable segments: fully-insured dental, self-insured dental, and Corporate, all other. Corporate, all other consists of revenue associated with our dental PPO and vision products underwritten by third-party insurance
carriers and certain other corporate activities. Our dental HMO, PPO and indemnity products and our vision product line are marketed to employer groups. We identified our segments in accordance with SFAS No. 131 which is consistent with
information used by our Chief Executive Officer in managing our business. The segment information aggregates products with similar economic characteristics. These characteristics include the nature of employer groups and pricing, benefits and
underwriting requirements.

The results of our fully-insured and self-insured dental segments are measured by gross profit. We do not
measure the results of our Corporate, all other segment. We do not allocate investment and other income, insurance expenses, or other assets or liabilities to our fully-insured and self-insured segments. These items are retained in our Corporate,
all other segment. Our segments do not share overhead costs and assets. We do, however, measure the contributions of each of our fully-insured and self-insured segments to costs retained in our Corporate, all other segment.

Many factors have an affect on our results, but most notably our results are influenced by our ability to establish and maintain a competitive and
efficient cost structure and to accurately and consistently establish competitive premiums, ASO fees, and plan benefit levels that are commensurate with our dental and administrative costs. Dental costs are subject to a high rate of inflation due to
many forces, including new higher priced technologies and dental procedures, new dental service techniques and therapies, an aging population, lifestyle choices.

Strategy

Our strategy focuses on providing solutions for employers to the rising cost of dental care through leveraging our
growing networks of participating dentists and deploying a variety of products that give employer groups and members more choices. Additionally, we have increased the diversification of our membership base, not only through our newer products, but
also by entering new geographic territories. We expect our dental PPO and indemnity products to be important components of growth in the years ahead.

In our original eight county service area, our non-exclusive dental HMO provider network includes approximately 94% of the dental providers in the market. In that market our dental HMO provides the broad provider
access of a dental PPO along with effective utilization and cost control features. Because of the broad provider network, our fully-insured dental HMO is priced higher than other dental HMOs and has premium rates more equivalent to competitor dental
PPOs.

Highlights



| |  |  | We generated net income of approximately $53,000 for the three months ended June 30, 2009 compared to a net income of approximately $250,000 for the three
months ended June 30, 2008.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We had a net loss of approximately $(99,000) for the six months ended June 30, 2009 compared to a net loss of approximately $(46,000) for the six months ended
June 30, 2008.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our dental and vision product membership decreased by approximately 5,400 members, or 2.0%, from approximately 267,800 members at December 31, 2008 to
approximately 262,400 members at June 30, 2009. This membership decrease is due to one large self-insured employer group whose contract did not renew effective January 1, 2009, with approximately 15,700 members, which was partially offset
by an increase in fully-insured dental membership of approximately 7,900 members, an increase in other self-insured membership of approximately 700 members, and an increase in corporate, all other membership of approximately 1,700 members. Our
membership at June 30, 2009 includes approximately 28,300 members from sales related to our DentaSelect dental PPO offering.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our ratio of healthcare services expense to premium revenue (loss ratio) increased from 81.9% in the 2008 period to 82.9% in the 2009 period. We
determined, by analyzing the claims information, that our members received more preventative and basic dental services in the 2009 period compared to the 2008 period.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Comparison of Results of Operations

The following discussion primarily deals with our results of operations for the three months ended June 30, 2009, or the 2009 quarter, the three months ended June 30, 2008, or the 2008 quarter, the six
months ended June 30, 2009, or the 2009 period, and the six months ended June 30, 2008, or the 2008 period.

The following table
presents membership and financial data for our three segments (dollar amounts in thousands):



|                                 |  |                                 |         |                                 |   |         |  |       |   
|-------------------------------- |  | ------------------------------- | ------- | ------------------------------- | - | ------- |  | ----- | --
|                                 |  | As ofJune 30, 2009              |         | As ofJune 30, 2008              |   | Change  | 
|Membership:                      |  |                                 |         |                                 |   |         |  |       |   
|Fully-insured dental             |  |                                 | 162,900 |                                 |   | 151,400 |  | 7.6   | % 
|Self-insured dental              |  |                                 | 83,000  |                                 |   | 95,500  |  | (13.1 | )%
|Corporate, all other             |  |                                 | 16,500  |                                 |   | 14,300  |  | 15.4  | % 
|                                 |  |                                 |         |                                 |   |         |  |       |   
|Total membership                 |  |                                 | 262,400 |                                 |   | 261,200 |  | 0.5   | % 
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|                                 |  | Three months endedJune 30, 2009 |         | Three months endedJune 30, 2008 |   | Change  | 
|Premium revenue:                 |  |                                 |         |                                 |   |         |  |       |   
|Fully-insured dental             |  | $                               | 11,194  |                                 | $ | 9,796   |  | 14.3  | % 
|Self-insured dental              |  |                                 | 6,321   |                                 |   | 6,215   |  | 1.7   | % 
|Corporate, all other             |  |                                 | 95      |                                 |   | 115     |  | (17.4 | )%
|                                 |  |                                 |         |                                 |   |         |  |       |   
|Total premium revenue            |  |                                 | 17,610  |                                 |   | 16,126  |  | 9.2   | % 
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|Investment income                |  |                                 | 28      |                                 |   | 52      |  | (46.2 | )%
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|Other income                     |  |                                 | 17      |                                 |   | 12      |  | 41.7  | % 
|                                 |  |                                 |         |                                 |   |         |  |       |   
|Total revenue                    |  |                                 | 17,655  |                                 |   | 16,190  |  | 9.0   | % 
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|Healthcare service expense:      |  |                                 |         |                                 |   |         |  |       |   
|Fully-insured dental             |  |                                 | 8,985   |                                 |   | 7,695   |  | 16.8  | % 
|Self-insured dental              |  |                                 | 5,461   |                                 |   | 5,322   |  | 2.6   | % 
|Corporate, all other             |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|Total healthcare service expense |  |                                 | 14,446  |                                 |   | 13,017  |  | 11.0  | % 
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|Insurance expense                |  |                                 | 3,127   |                                 |   | 2,787   |  | 12.2  | % 
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|Income tax expense               |  |                                 | 29      |                                 |   | 136     |  | (78.7 | )%
|                                 |  |                                 |         |                                 |   |         |  |       |   
|                                 |  |                                 |        
|Net Income                       |  | $                               | 53      |                                 | $ | 250     |  | (78.8 | )%
|                                 |  |                                 |         |                                 |   |         |  |       |   



14



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|                                 |  |                               |        |                               |   |        |  |       |   
|-------------------------------- |  | ----------------------------- | ------ | ----------------------------- | - | ------ |  | ----- | --
|                                 |  | Six months endedJune 30, 2009 |        | Six months endedJune 30, 2008 |   | Change | 
|Premium revenue:                 |  |                               |        |                               |   |        |  |       |   
|Fully-insured dental             |  | $                             | 22,327 |                               | $ | 19,183 |  | 16.4  | % 
|Self-insured dental              |  |                               | 12,484 |                               |   | 12,225 |  | 2.1   | % 
|Corporate, all other             |  |                               | 199    |                               |   | 252    |  | (21.0 | )%
|                                 |  |                               |        |                               |   |        |  |       |   
|Total premium revenue            |  |                               | 35,010 |                               |   | 31,660 |  | 10.6  | % 
|                                 |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |       
|Investment income                |  |                               | 63     |                               |   | 118    |  | (46.6 | )%
|                                 |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |       
|Other income                     |  |                               | 38     |                               |   | 26     |  | 46.2  | % 
|                                 |  |                               |        |                               |   |        |  |       |   
|Total revenue                    |  |                               | 35,111 |                               |   | 31,804 |  | 10.4  | % 
|                                 |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |       
|Healthcare service expense:      |  |                               |        |                               |   |        |  |       |   
|Fully-insured dental             |  |                               | 18,245 |                               |   | 15,476 |  | 17.9  | % 
|Self-insured dental              |  |                               | 10,778 |                               |   | 10,463 |  | 3.0   | % 
|Corporate, all other             |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |       
|Total healthcare service expense |  |                               | 29,023 |                               |   | 25,939 |  | 11.9  | % 
|                                 |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |       
|Insurance expense                |  |                               | 6,242  |                               |   | 5,936  |  | 5.2   | % 
|                                 |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |       
|Income tax benefit               |  |                               | 55     |                               |   | 25     |  | 120.0 | % 
|                                 |  |                               |        |                               |   |        |  |       |   
|                                 |  |                               |       
|Net Loss                         |  | $                             | 99     |                               | $ | 46     |  | 115.2 | % 
|                                 |  |                               |        |                               |   |        |  |       |   

Summary

Net income on Redeemable Shares decreased by $197,000, from approximately $250,000 in the 2008 quarter to approximately $53,000 in the 2009 quarter. Basic earnings on Redeemable Common Shares decreased from $29.60 per
Redeemable Common share in the 2008 quarter to $6.21 per Redeemable Common Share in the 2009 quarter. The decrease in the net income was primarily due to an increase in the ratio of healthcare services expense to premium revenue or loss
ratio from 80.7% in the 2008 quarter to 82.0% in the 2009 quarter. This loss ratio increase was primarily due to an increase in dental service utilization by our dental membership in the 2009 quarter compared to the 2008 quarter.

While total revenue less healthcare services expense for the 2009 quarter increased by $36,000 as compared to the 2008 quarter, insurance expense
increased by $340,000, from $2,787,000 for the 2008 quarter to $3,127,000 for the 2009 quarter. This increase is primarily attributable to higher salary and benefit costs, higher broker commission expense, and higher premium taxes associated with
increased premiums.

Membership

Our
fully-insured dental membership increased by approximately 11,500 members, from 151,400 members as of June 30, 2008 to approximately 162,900 members as of June 30, 2009. This membership increase is primarily attributable to an increase of
approximately 2,000 fully-insured dental HMO members, an increase of approximately 9,100 fully-insured dental PPO members, and an increase of approximately 400 fully-insured dental indemnity members underwritten by Dental Care Plus Inc.
(DCP). The increase in fully-insured dental HMO membership of 2,000 members is due to new sales in the Cincinnati and Northern Kentucky markets of approximately 11,400 members, offset by the loss of approximately 9,400 members due to
employer groups that did not renew with the Company or reduced employee and member counts of retained employer groups. The increase in fully-insured dental PPO membership is due to new sales in the new geographical areas.

Our self-insured dental membership decreased by approximately 12,500 members, from approximately 95,500 members as of June 30, 2008 to approximately
83,000 members as of June 30, 2009. This decrease is primarily due to one large self-insured employer group whose contract did not renew effective January 1, 2009, representing approximately 15,700 members effective January 1, 2009
offset by an increase in self-insured membership of 3,200 members attributable to new sales.

Our Corporate, all other membership increased
by approximately 2,200 members in the six months ended June 30, 2009. The increase is primarily due to an increase in our vision plan membership.



15



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##### Table of Contents

Revenue

Fully-insured dental premium revenue for the 2009 quarter increased by approximately $1,398,000 compared to the 2008 quarter. An increase in fully-insured membership volume in the 2009 quarter resulted in an increase in fully-insured dental
premiums of approximately $1,304,000. Fully-insured dental premium rate increases negotiated with employer groups at their annual renewals resulted in an increase of approximately $94,000 in fully-insured dental premium revenue.

Fully-insured dental premium revenue for the 2009 period increased by approximately $3,144,000 compared to the 2008 period. An increase in fully-insured
membership volume in the 2009 period resulted in an increase in fully-insured dental premiums of approximately $2,915,000. Fully-insured dental premium rate increases negotiated with employer groups at their annual renewals resulted in an increase
of approximately $229,000 in fully-insured dental premium revenue.

Total self-insured dental revenue for the 2009 quarter increased
approximately $106,000 compared to the 2008 quarter. Self-insured revenue decreased by approximately $1,258,000 due to the loss of the member month volume associated with the loss of the large employer group discussed above. This decrease in
self-insured revenue was offset by an increase of approximately $468,000 related to new self-insured sales and by an increase of approximately $896,000 related to an increase in dental service utilization by our self-insured members in the 2009
quarter compared to the 2008 quarter and the run out claims of the self-insured group that did not renew its contract.

Total self-insured
dental revenue for the 2009 period increased approximately $259,000 compared to the 2008 period. Self-insured revenue decreased by approximately $2,515,000 due to the loss of the member month volume associated with the loss of the large employer
group discussed above. This decrease in self-insured claim revenue was offset by an increase of approximately $1,120,000 related to new self-insured sales and by an increase of approximately $1,654,000 related to an increase in dental service
utilization by our self-insured members in the 2009 period compared to the 2008 period and the run out claims of the self-insured group that did not renew its contract. The self-insured segment revenue has two components:

Self-Insured Claim Revenue - Self-insured claim revenue for the 2009 quarter increased approximately $132,000, or 2.2%, from
approximately $5,878,000 in the 2008 quarter to approximately $6,010,000 in the 2009 quarter. This is due to an increase of approximately $443,000 related to new self-insured sales and by an increase of approximately $879,000 related to an increase
in dental service utilization by our self-insured members in the 2009 quarter compared to the 2008 quarter and the run out claims of the self-insured group that did not renew its contract. This was offset by self-insured claims revenue decreased by
approximately $1,190,000 due to the loss of the member month volume associated with the large employer group discussed above.

Self-insured claim revenue for the 2009 period increased approximately $309,000, or 2.7%, from approximately $11,560,000 in the 2008 period to approximately $11,869,000 in the 2009 period. This is due to an increase of approximately
$1,059,000 related to new self-insured sales and by an increase of approximately $1,628,000 related to an increase in dental service utilization by our self-insured members in the 2009 quarter compared to the 2008 quarter and the run out claims of
the self-insured group that did not renew its contract. This increase is offset by self-insured claims revenue decreased of approximately $2,378,000 due to the loss of the member month volume associated with the large employer group discussed above.

Self-Insured ASO Fees - Self-insured ASO fees for the 2009 quarter decreased approximately $26,000, or 7.7%, from
approximately $337,000 in the 2008 quarter to approximately $311,000 in the 2009 quarter. This decrease is primarily attributable to the decrease of approximately $68,000 related to the loss of the member month volume associated with the large
employer group discussed above. This decrease in self-insured ASO fees was offset by an increase of approximately $25,000 related to new self-insured sales and an increase of approximately $17,000 related to a small increase in average self-insured
ASO fee rates.

Self-insured ASO fees for the 2009 period decreased approximately $51,000, or 7.7%, from approximately
$665,000 in the 2008 period to approximately $614,000 in the 2009 period. This decrease is primarily attributable to the decrease of approximately $137,000 related to the loss of the member month volume associated with the large employer group
discussed above. This decrease in self-insured ASO fees was offset by an increase of approximately $61,000 related to new self-insured sales and an increase of approximately $25,000 related to a small increase in average self-insured ASO fee rates.
We provide administrative and claims processing services, benefit plan design, and access to our provider networks for an administrative fee, generally to self-insured groups. Our ASO fee revenue is recognized monthly when earned and is normally
based on annual contracts with the self-insured groups.

Corporate, all other premium revenue is primarily derived from the dental
indemnity product, the dental PPO product and the vision product underwritten by third-party insurance carriers. In aggregate, corporate, all other premium revenue decreased by approximately $20,000 in the 2009 quarter compared to the 2008 quarter.



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Investment Income

Investment income for the 2009 quarter decreased approximately $24,000 compared to the 2008 quarter. Investment income for the 2009 period decreased approximately $55,000 compared to the 2008 period. These decreases
are attributable to a decrease in prevailing interest rates on our certificates of deposit and money market funds in the 2009 quarter and period as compared to the 2008 quarter and period.

Other Income

Other income for the 2009 quarter
increased approximately $5,000 compared to the 2008 quarter. Other income for the 2009 period increased approximately $12,000 compared to the 2008 period.

Healthcare Services Expense

Fully-insured dental healthcare services expense for the 2009 quarter increased approximately
$1,290,000 compared to the 2008 quarter. An increase in fully-insured membership volume of 7.6% in the 2009 quarter resulted in an increase in fully-insured dental healthcare services expense of approximately $1,024,000. An increase in fully-insured
dental healthcare services expense of approximately $267,000 is the result of a 3.1% increase in fully-insured dental healthcare services expense on a per member per month basis compared to the 2008 quarter. This increase is primarily due to higher
dental service utilization by fully-insured dental members in the 2009 quarter compared to the 2008 quarter.

Fully-insured dental
healthcare services expense for the 2009 period increased approximately $2,769,000 compared to the 2008 period. An increase in fully-insured membership volume of 16.4% in the 2009 period resulted in an increase in fully-insured dental healthcare
services expense of approximately $2,351,000. An increase in fully-insured dental healthcare services expense of approximately $418,000 is the result of a 2.4% increase in fully-insured dental healthcare services expense on a per member per month
basis compared to the 2008 period. This increase is primarily due to higher dental service utilization by fully-insured dental members in the 2009 period compared to the 2008 period.

Self-insured dental healthcare services expense for the 2009 quarter increased approximately $139,000. This increase is due to an increase of
approximately $401,000 related to new self-insured sales and by an increase of approximately $816,000 related to an increase in dental service utilization by our self-insured members in the 2009 quarter compared to the 2008 quarter and the run out
claims of the self-insured group that did not renew its contract. This is offset by self-insured healthcare services expense decreased of approximately $1,078,000 related to the loss of the member month volume associated with the large employer
group discussed above.

Self-insured dental healthcare services expense for the 2009 period increased approximately $315,000. This increase
is due to an increase of approximately $959,000 related to new self-insured sales and by an increase of approximately $1,508,000 related to an increase in dental service utilization by our self-insured members in the 2009 period compared to the 2008
period and the run out claims of the self-insured group that did not renew its contract. This is offset by self-insured healthcare services expense decreased of approximately $2,152,000 related to the loss of the member month volume associated with
the large employer group discussed above.

Corporate, all Other healthcare services expense is not recognized by the Company due to the
fact that our other dental indemnity, dental PPO and vision PPO products are underwritten by third-party insurance carriers.

Insurance Expense

Consolidated insurance expense for the 2009 quarter increased approximately $340,000 compared to the 2008 quarter. Insurance expense as a
percentage of total revenue, or the insurance expense ratio, was 17.7% for the 2009 quarter compared to 17.3% for the 2008 quarter. Consolidated insurance expense for the 2009 period increased approximately $306,000 compared to the 2008 period.
Insurance expense as a percentage of total revenue, or the insurance expense ratio, was 17.8% for the 2009 period compared to 18.7% for the 2008 period. The higher consolidated insurance expense for both the 2009 quarter and 2009 period were
primarily due to higher commission expense and other acquisition costs.

Income Taxes

The Company calculates its year to date income tax provision or benefit by applying the estimated annual effective tax rate for the year to date pretax
income or loss. Our estimated income tax expense for the 2009 quarter was approximately $29,000 with an effective tax rate of 35.2%. Our estimated income tax expense for the 2008 quarter was approximately $136,000 with an effective tax rate of
approximately 35.1%. Our estimated income tax benefit for the 2009 period was approximately $55,000 with an effective tax rate of 35.5%. Our estimated income tax benefit for the 2008 period was approximately $25,000 with an effective tax
rate of approximately 35.1%.



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Liquidity and Capital Resources and Changes in Financial Condition

Our primary sources of cash include receipts of premiums, ASO fees, investment and other income, as well as the proceeds from the sale or maturity of our
investment securities and from borrowings. Our primary uses of cash include disbursements for claims payments, insurance expense, taxes, purchases of investment securities, capital expenditures, and payments on borrowings. Because premiums are
collected in advance of claims payments, our business normally produces positive cash flows during a period of increasing enrollment. Conversely, cash flows would normally be negatively affected during a period of shrinking enrollment.

Cash decreased approximately $366,000, or 14.5%, during the 2009 period to approximately $2,162,000 from $2,528,000 as of December 31, 2008. The
change in cash for the 2009 and 2008 periods is summarized as follows (in thousands):



|                                                    |  |                               |        |   |                               |   |      |  
|--------------------------------------------------- |  | ----------------------------- | ------ | - | ----------------------------- | - | ---- | -
|                                                    |  | Six months endedJune 30, 2009 |        |   | Six months endedJune 30, 2008 |  
|Net cash provided by (used in) operating activities |  | $                             | (1,030 | ) |                               | $ | 6    |  
|Net cash provided by (used in) investing activities |  |                               | 696    |   |                               |   | (137 | )
|Net cash used in financing activities               |  |                               | (32    | ) |                               |   | (161 | )
|                                                    |  |                               |        |   |                               |   |      |  
|Decrease in cash and cash equivalents               |  | $                             | (366   | ) |                               | $ | (292 | )
|                                                    |  |                               |        |   |                               |   |      |  

Cash Flow from Operating Activities

In the 2009 period, approximately $1,030,000 of cash was used in operating activities. Non-cash depreciation and amortization expense was approximately
$225,000 in the 2009 period compared to approximately $211,000 in the 2008 period. In addition, approximately $296,000 of cash was used related to income taxes in the 2009 period compared to approximately $65,000 in the 2008 period.

In the 2009 period, accounts receivable decreased by approximately $91,000 due to more aggressive collection activities during the first six months of
2009. Our claims payable liability decreased by approximately $860,000 in the 2009 period, from approximately $2,631,000 at December 31, 2008 to approximately $1,771,000 at June 30, 2009. This decrease is primarily due to the payment of
provider withhold return of $464,000 in March 2009 that was approved by the Board of Directors in December 2008 and a decrease in the elapsed time from dental claims submission to claims payment in the second quarter of 2009 resulting in accelerated
payments to providers of approximately $400,000. The increase in our unearned premium liability of approximately $7.1 million, from approximately $21.6 million at December 31, 2008 to approximately $28.7 million at June 30, 2009 and the
increase in unbilled accounts receivable of approximately $6.9 million from $20.8 million December 31, 2008 to approximately $27.7 million at June 30, 2009 are primarily attributable to the renewal of a large portion of our fully-insured
dental HMO, PPO and indemnity employer groups on January 1, 2009. Deferred acquisition costs increased by approximately $494,000 in the 2009 period primarily due to the renewal of a large portion of our fully-insured employer group contracts
that are non-cancelable by DCP in the 2009 period. The remaining effects of changes in operating assets and liabilities that represent fluctuations in these assets and liabilities are not unusual and are consistent with the 2008 period.

Cash Flow from Investing Activities

In the 2009
period, we invested approximately $45,000 in building improvements, furniture and fixtures and computer equipment. During the 2009 period, we made purchases totaling approximately $8.3 million of certificates of deposit and an institutional money
market fund in order to improve investment income. Also during the 2009 period, we had certificate of deposit maturities and institutional money market sales to pay current obligations that together totaled approximately $9.0 million.

Cash Flow from Financing Activities

In the 2009
period, we made the scheduled principal payments of approximately $60,000 related to our office building mortgage and approximately $19,000 related to our capital lease financing for our dental administration system. During the 2009 period, we
repurchased Redeemable Common Shares with a value of approximately $111,000 and issued Redeemable Common Shares and Redeemable Provider Preferred Shares with a combined value of approximately $158,000 net of issuance cost of approximately $7,000. We
have received requests for Common Share redemptions totaling approximately $40,000 that will be paid in future periods.

Provider Withhold Funds

In most cases, the fees of our participating providers for covered dental services under the dental HMO are generally subject to a 10%
withhold by us. The amounts withheld are not retained in a separate fund and we have no obligation to pay any portion of the amounts withheld to the providers. The dental providers have no vested rights in the amounts withheld unless our Board of
Directors authorizes that any amounts withheld shall be paid to the providers, and then vesting is only to the extent of such amounts authorized to be paid by the Board. Once authorized for payment by the Board, such amounts are recorded as claims
payable liabilities until paid.



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In the 2009 period, we paid $464,000 to participating providers that was authorized by the Board in
December of 2008. In the 2008 period, we paid $650,000 to participating providers that was authorized by the Board in December of 2007.

Financial
Condition

Our consolidated cash and short-term investments were approximately $7.3 million as of June 30, 2009 and approximately
$8.2 million as of December 31, 2008. Based on total expenses for the six months ended June 30, 2009, we estimate that we had approximately 38 days of cash and short-term investments on hand at June 30, 2009.

Our cash and short-term investments totaled approximately $7.3 million at June 30, 2009 due to the decrease in cash of approximately $366,000 during
the 2009 period and the decrease in short-term investment of approximately $538,000 during the 2009 period. These decreases in cash and short-term investments were primarily due to a significant decrease in the elapsed time from dental claims
submission to claims payment in the second quarter of 2009. We expect to generate positive cash flow from operations during the balance of 2009.

We have an agreement with a commercial bank for a $500,000 annually renewable working capital line of credit. Interest is payable based on the prime borrowing rate that was 3.25% as of June 30, 2009. The Company incurred no interest
expense in 2008 or the 2009 period related to this line of credit. As of June 30, 2009, there was no amount outstanding on this line of credit. We also have an agreement with a commercial bank for a $1,000,000 annually renewable working capital
line of credit. Interest is payable based on the prime borrowing rate that was 3.25% as of June 30, 2009. The Company incurred no interest expense in the 2009 period related to this line of credit. As of June 30, 2009, there was no amount
outstanding on this line of credit.

Together, we believe our premium revenues, cash, short-term investments and working capital lines of
credit are sufficient to meet our short-term and long-term liquidity needs. In the short-term, we are obligated to make payments related to our contractual obligations such as our healthcare services expense, building mortgage, and our operating
leases and other commitments. In the long-term, we will continue to be obligated to make payments related to our contractual obligations delineated above. We will also be obligated in certain circumstances to repurchase the Redeemable Common Shares
and Redeemable Provider Preferred Shares of our provider shareholders who die, are permanently disabled, or retire. Our Board of Directors establishes limitations on the amount of share redemptions each year. While we are not able to estimate future
redemptions of our Redeemable Common Shares and Redeemable Provider Preferred Shares, we believe our cash balances, investment securities, operating cash flows, and borrowing capacity, taken together, provide adequate resources to fund ongoing
operating and regulatory requirements and fund future expansion opportunities and capital expenditures in the foreseeable future.

We
operate as a holding company in a highly regulated industry. We are primarily dependent upon management fees that we receive from our subsidiaries. We also receive dividends from our subsidiaries from time to time. The dividends from our subsidiary,
Dental Care Plus Inc., are subject to regulatory restrictions. We are required to maintain aggregate statutory capital and surplus and are in compliance with these requirements.

Risk-Based Capital

Our regulated subsidiarys state of domicile has statutory risk-based
capital, or RBC, requirements for health and other insurance companies largely based on the NAICs RBC Model Act. These RBC requirements are intended to measure capital adequacy, taking into account the risk characteristics of an insurers
investments and products. The NAIC sets forth the formula for calculating the RBC requirements, which are designed to take into account asset risks, insurance risks, interest rate risks and other relevant risks with respect to an individual
insurance companys business. In general, an insurance company must submit a report of its RBC level to the state insurance department or insurance commissioner, as appropriate, at the end of each calendar year. Our subsidiarys risk-based
capital as of December 31, 2008, which was the most recent date for which reporting was required, was in excess of all mandatory RBC thresholds.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|------- | ---------------------------------------------------------

Market risk is the risk that we will incur investment losses or increased interest expense due to adverse changes in market rates and prices. Our market risk exposures are substantially related to our investment portfolio and the impact of
interest rate changes on these securities. In addition, interest rate changes can affect future interest expense for debt obligations that have a variable rate of interest associated with them.



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At June 30, 2009 and December 31, 2008, respectively, our investment portfolio consisted of
approximately $4,002,000 and $4,634,000 of institutional money market funds. The remaining amount of approximately $1,817,000 and $1,932,000 at June 30, 2009 and December 31, 2008, respectively consisted of investments in FDIC-insured bank
certificates of deposit, U.S. Treasury securities and U.S. government security mutual funds. We have evaluated the impact on the invested portfolios fair value considering an immediate 100 basis point change in interest rates. A 100 basis
point increase in interest rates would result in an approximate $19,200 decrease in fair value, whereas a 100 basis point decrease in interest rates would result in an approximate $17,300 increase in fair value. The certificates of deposit with a
cost of $1,800,000 at June 30, 2009 and $1,909,000 at December 31, 2008 are all classified as available-for-sale.

At
June 30, 2009 and December 31, 2008, we had a mortgage note with a bank with an outstanding principal balance of $1,080,000 and $1,140,000, respectively, with a variable rate based on LIBOR plus 1.75%. However, in June of 2003, we entered
into a variable to fixed interest rate swap contract that effectively eliminated the interest rate risk exposure on all but $300,000 of the outstanding loan principal. Management estimates that a 100 basis point increase in interest rates would
decrease our annual pre-tax earnings by $3,000.

At June 30, 2009 and December 31, 2008, we had a revolving note with a
commercial bank with an outstanding principal balance of $630,000 with a variable rate based on LIBOR plus 1.75%. Management estimates that a 100 basis point increase in interest rates would decrease our annual pre-tax earnings by $6,300.

There have been no material changes in our exposures to market risk for the quarter ended June 30, 2009.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation of
Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Companys
management, including the Chief Executive Officer and Chief Financial Officer, of the design and effectiveness of the Companys disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e))
as of June 30, 2009. Based on the evaluation, the Companys management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Companys disclosure controls and procedures were effective as of
June 30, 2009.

Changes in Internal Control over Financial Reporting

There were no changes in the Companys internal control over financial reporting (as defined in Securities Exchange Act Rules 13a-15(f) and
15(d)-15(f)) during the three and six months ended June 30, 2009 that materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

We are not a party to any
pending legal proceedings that we believe would, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

Certain factors may have a material
adverse effect on our business, financial condition and results of operations and you should carefully consider them. It is not possible to predict or identify all such factors. For discussion of our potential risks or uncertainties, refer to Part
I, Item 1A, Risk Factors, included in our 2008 Annual Report on Form 10-K. There have been no material changes to the risk factors disclosed in our 2008 Annual Report on Form 10-K.



|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

In May of 2009, the Company sold and issued 30 Class B Redeemable Common Shares in a private placement, at a price of $647.51 per share, the book value of a Redeemable Common share at April 30, 2009. The private placement is being made
(i) solely to the Companys directors, officers, employees and participating dentists with the assistance of a placement agent, Ludlow Ward Securities, LLC (LWS), (ii) pursuant to a Confidential Private Placement
Memorandum, which incorporates, among other things, the Companys Form 10-K registration statement and most recent periodic reports and (iii) (a) in the case of the Class B Common Shares, only to participating dentists in the
Companys dental plans, retired participating dentists, or employees, officers and directors of the Company or the Companys subsidiaries and (b) in the case of the Class A Common Shares, only to persons who do not already own a
Class A Common Share who are licensed dentists engaged in the practice of dentistry in Ohio or Kentucky and who are participating dentists in the Companys dental plan and (c) in the case of the Provider Preferred Shares, only to
participating dentists in the Companys dental plans or retired participating dentists that own at least 12 Redeemable Common Shares. In addition, the Company will sell securities in the private placement only to those persons who meet the
suitability standards necessary to comply with a Rule 506 private placement and will require potential investors to make representations in a subscription agreement as to their accredited investor status and/or financial sophistication. The
Company has paid and will pay a placement fee of 7% of the proceeds of the certain share sales associated with these offerings to LWS.

We
repurchased and retired 3 Class A Redeemable Common Shares and 145 Class B Redeemable Common Shares during the three months ended June 30, 2009 as follows:



|                         |  |                              |     |  |                              |     |  |                             |        |                                                                                 |   |                                                                             |    
|------------------------ |  | ---------------------------- | --- |  | ---------------------------- | --- |  | --------------------------- | ------ | ------------------------------------------------------------------------------- | - | --------------------------------------------------------------------------- | ---
|Period                   |  | Total Class Asharespurchased |     |  | Total Class Bsharespurchased |     |  | Average pricepaid per share |        | Total Number of SharesPurchased as Part of aPublicly AnnouncedPlans or Programs |   | Maximum Number ofShares that May Yet BePurchased Under thePlans or Programs
|April 1  April 30, 2009 |  | 3                            | (a) |  | 33                           | (a) |  | $                           | 653.89 |                                                                                 | 0 |                                                                             | N/A
|May 1  May 31, 2009     |  | 0                            |     |  | 100                          |     |  |                             | 647.51 |                                                                                 | 0 |                                                                             | N/A
|June 1  June 30, 2009   |  | 0                            |     |  | 12                           |     |  |                             | 653.53 |                                                                                 | 0 |                                                                             | N/A



|(a) | Repurchased from provider shareholder in accordance with the Companys obligations under its Amended and Restated Code of Regulations.
|--- | --------------------------------------------------------------------------------------------------------------------------------------



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

The Companys annual meeting of shareholders was held on April 25, 2009. At the meeting, the shareholders voted to re-elect certain persons to the Board of Directors for a term expiring at the 2011 annual meeting of shareholders
and to elect Anthony A. Cook for a term expiring at the 2010 annual meeting of shareholders. The individuals listed below were elected to the Companys Board of Directors, each to hold office until the designated annual meeting or until his or
her successor is elected and qualified, or until his or her earlier resignation. The table below indicates the votes for, votes withheld as well as shares not voted for the election of the seven nominees.



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|                              |  |     |  |          |  |          
|----------------------------- |  | --- |  | -------- |  | ---------
|                              |  | For |  | Withheld |  | Not Voted
|Fred J. Bronson, DDS          |  | 322 |  | 23       |  | 282      
|Anthony A. Cook, MS, MBA      |  | 321 |  | 24       |  | 282      
|Jack M. Cook, MHA             |  | 321 |  | 24       |  | 282      
|Fred H. Peck, DDS             |  | 322 |  | 23       |  | 282      
|Molly Meakin-Rogers, MBA, CPA |  | 322 |  | 23       |  | 282      
|Stephen T. Schuler, DMD       |  | 321 |  | 24       |  | 282      
|Mark Zigoris, DDS             |  | 322 |  | 23       |  | 282      

The following are the names of each other director whose term of office as a director continued
after the 2009 annual meeting of shareholders (in this case, for terms expiring at the 2010 annual meeting of shareholders):



|                          
|--------------------------
|Michael Carl, DDS         
|Anthony A. Cook, MS, MBA  
|Ross A. Geiger            
|Roger M. Higley, DDS      
|David A. Kreyling, DMD    
|James E. Kroeger, MBA, CPA
|Donald J. Peak, CPA       



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.



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##### Table of Contents

|ITEM 6. | EXHIBITS
|------- | --------



|         |  |                                                                                                                                     
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  |                                                                                                                                     
|31.1     |  | CEO certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002.                                                           
|         | 
|31.2     |  | CFO certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002.                                                           
|         | 
|32       |  | CEO and CFO certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                |  |                     |  |                                                           
|--------------- |  | ------------------- |  | ----------------------------------------------------------
|                |  | DCP HOLDING COMPANY
|                |  |                    
|August 12, 2009 |  | By:                 |  | /s/ Anthony A. Cook                                       
|                |  |                     |  | Anthony A. Cook.                                          
|                |  |                     |  | President and Chief Executive Officer                     
|                |  |                     |  | (Principal Executive Officer)                             
|                |  |                    
|August 12, 2009 |  | By:                 |  | /s/ Robert C. Hodgkins, Jr.                               
|                |  |                     |  | Robert C. Hodgkins, Jr.                                   
|                |  |                     |  | Vice President and Chief Financial Officer                
|                |  |                     |  | (Principal Financial Officer and Chief Accounting Officer)



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INDEX TO EXHIBITS



|            |  |                                                                                                                        
|----------- |  | -----------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Item                                                                                                                   
|31.1        |  | Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002                                                   
|            | 
|31.2        |  | Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002                                                   
|            | 
|32          |  | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002