##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2006
 o
    
    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
 
 DCP Holding Company
  Ohio
    
    20-1291244(State or Other Jurisdiction of
    
    (IRS Employer Identification No.)Incorporation or Organization)100 Crowne Point Place
    
    45241Sharonville, Ohio
    
    (Zip Code)(Address of Principal Executive Office)
  
 o þ
  o o þ
 o þ




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##### 



INDEX
TO DCP HOLDING COMPANY
 REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2006
 PART I  FINANCIAL INFORMATIONPAGEItem 1.
    
    Financial Statements
    
    
    1Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4.
    
    Controls and Procedures
    
    
    18PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    19Item 1A.
    
    Risk Factors
    
    
    19Item 2.
    
    Unregistered Sales of Equity and Use of Proceeds
    
    
    19Item 3.
    
    Defaults Upon Senior Securities
    
    
    19Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    19Item 5.
    
    Other Information
    
    
    19Item 6.
    
    Exhibits
    
    
    19Signatures
    
    
    20EX-31.1EX-31.2EX-32
  i




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Item 1. Financial Statements.
 DCP HOLDING COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCURRENT ASSETS:Cash
    
    $
    4,433,061
    
    
    $
    5,628,987Short-term investments at fair value, cost of $1,400,000 and
$1,600,000 at September 30, 2006 and December 31, 2005, respectively
    
    
    1,396,153
    
    
    
    1,593,678Accounts receivable, net of allowance of $45,000 and $83,000
at September 30, 2006 and December 31, 2005, respectively
    
    
    450,088
    
    
    
    337,330Prepaid expense, deposits, and other
    
    
    90,121
    
    
    
    174,962Deferred federal income tax
    
    
    356,889
    
    
    
    131,317Total current assets
    
    
    6,726,312
    
    
    
    7,866,274INVESTMENTS
    
    
    497,449
    
    
    
    199,182PROPERTY, PLANT, AND EQUIPMENT:Land
    
    
    364,000
    
    
    
    364,000Building and building improvements
    
    
    2,221,171
    
    
    
    2,160,534Furniture and equipment
    
    
    1,853,302
    
    
    
    1,454,214Total property, plant, and equipment
    
    
    4,438,473
    
    
    
    3,978,748Less accumulated depreciation and amortization
    
    
    (1,172,234
    )
    
    
    (854,902
    )Total property, plant, and equipmentnet
    
    
    3,266,239
    
    
    
    3,123,846INTANGIBLE ASSETS, net of accumulated amortization of
$242,000 and $50,000 at September 30, 2006 and December 31, 2005, respectively
    
    
    207,717
    
    
    
    399,639GOODWILL
    
    
    136,355
    
    
    
    66,990OTHER ASSETS
    
    
    317,410
    
    
    
    593,789TOTAL ASSETS
    
    $
    11,151,482
    
    
    $
    12,249,720LIABILITIES, REDEEMABLE COMMON SHARES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term obligations
    
    $
    406,490
    
    
    $
    413,120Accounts payable and accrued expenses
    
    
    1,319,941
    
    
    
    1,391,889Claims payable
    
    
    2,438,556
    
    
    
    3,257,815Unearned premium revenue
    
    
    900,236
    
    
    
    693,886Federal income tax payable
    
    
    84,883
    
    
    
    104,278Other current liabilities
    
    
    54,165Total current liabilities
    
    
    5,204,271
    
    
    
    5,860,988LONG TERM LIABILITIES:Mortgage loan payable
    
    
    1,290,000
    
    
    
    1,380,000Capital lease obligation
    
    
    296,699
    
    
    
    453,363Notes payable
    
    
    
    
    
    
    55,417Deferred federal income tax
    
    
    98,332
    
    
    
    117,205Other liabilities
    
    
    104,336Total long-term liabilities
    
    
    1,789,367
    
    
    
    2,005,985TOTAL LIABILITIES
    
    
    6,993,638
    
    
    
    7,866,973REDEEMABLE COMMON SHARES:Class A Redeemable Common Shares, no par valueauthorized, 7,500 shares;
issued and outstanding, 683 and 691 at September 30, 2006 and December 31, 2005, respectively
    
    
    351,375
    
    
    
    357,976Class B Redeemable Common Shares, no par valueauthorized, 100,000 shares;
issued and outstanding, 7,399 and 7,769 at September 30, 2006 and December 31, 2005, respectively
    
    
    3,806,469
    
    
    
    4,024,771Total redeemable common shares
    
    
    4,157,844
    
    
    
    4,382,747SHAREHOLDERS EQUITY-Preferred Shares; no par value, 100,000 shared authorized, none issued
    
    
    
    
    
    
    TOTAL LIABILITIES, REDEEMABLE COMMON SHARES AND SHAREHOLDERS EQUITY
    
    $
    11,151,482
    
    
    $
    12,249,720
   1




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DCP HOLDING COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
2005
    
    
2006
    
    
2005Premium revenue
    
    $
    13,264,075
    
    
    $
    11,707,189
    
    
    $
    38,311,477
    
    
    $
    33,366,662Operating expenses:Healthcare services expense
    
    
    11,156,642
    
    
    
    9,891,902
    
    
    
    31,443,891
    
    
    
    27,619,846Selling, general and administrative expense
    
    
    2,445,663
    
    
    
    1,883,623
    
    
    
    7,408,770
    
    
    
    5,856,175Total operating expenses
    
    
    13,602,305
    
    
    
    11,775,525
    
    
    
    38,852,661
    
    
    
    33,476,021Operating loss
    
    
    (338,230
    )
    
    
    (68,336
    )
    
    
    (541,184
    )
    
    
    (109,359
    )Non-Operating Income (Expense):Investment income
    
    
    56,281
    
    
    
    27,516
    
    
    
    139,506
    
    
    
    70,471Other income
    
    
    155,134
    
    
    
    78,751
    
    
    
    436,847
    
    
    
    157,050Interest expense
    
    
    (29,332
    )
    
    
    (33,886
    )
    
    
    (93,209
    )
    
    
    (96,779
    )Total non-operating income
    
    
    182,083
    
    
    
    72,381
    
    
    
    483,144
    
    
    
    130,742INCOME (LOSS) BEFORE INCOME TAX
    
    
    (156,147
    )
    
    
    4,045
    
    
    
    (58,040
    )
    
    
    21,383PROVISION (BENEFIT) FOR INCOME TAX:Current
    
    
    72,428
    
    
    
    59,885
    
    
    
    212,935
    
    
    
    107,017Deferred
    
    
    (111,250
    )
    
    
    (56,335
    )
    
    
    (225,572
    )
    
    
    (65,178
    )Total
    
    
    (38,822
    )
    
    
    3,550
    
    
    
    (12,637
    )
    
    
    41,839NET INCOME (LOSS) ON REDEEMABLE COMMON SHARES
    
    $
    (117,325
    )
    
    $
    495
    
    
    $
    (45,403
    )
    
    $
    (20,456
    )BASIC AND DILUTED EARNINGS (LOSS) PER REDEEMABLE COMMON SHARE
    
    $
    (14.52
    )
    
    $
    0.06
    
    
    $
    (5.52
    )
    
    $
    (2.41
    )BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
    
    
    8,083
    
    
    
    8,460
    
    
    
    8,231
    
    
    
    8,476
   2




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DCP HOLDING COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF REDEEMABLE COMMON SHARES AND SHAREHOLDERS EQUITY
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 (Unaudited)
 Redeemable Common Shares
    
    

Shareholders EquityClass A
    
    
    Class B
    
    
    
    
    
    
    Other AccumulatedNumber of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Total
    
    
    Income (Loss)BALANCEDECEMBER 31, 2005
    
    
    691
    
    
    $
    357,976
    
    
    
    7,769
    
    
    $
    4,024,771Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (45,403
    )
    
    
    
    
    
    $
    (45,403
    )
    
    $
    (45,403
    )Change in fair value of interest rate swap
(net of income tax benefit of $906)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1,760
    )
    
    
    (1,760
    )
    
    
    (1,760
    )Unrealized gain on investments
(net of income tax of $242)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    468
    
    
    
    468
    
    
    
    468Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (46,695
    )Class A
Common Shares exchanged for Class B Common Shares
    
    
    (3
    )
    
    
    (1,555
    )
    
    
    3
    
    
    
    1,555Common shares redeemed or repurchased
    
    
    (5
    )
    
    
    (2,344
    )
    
    
    (373
    )
    
    
    (175,864
    )Dilution Accretion of common shares to
redemption value
    
    
    
    
    
    
    (2,702
    )
    
    
    
    
    
    
    (43,993
    )
    
    
    45,403
    
    
    
    1,292
    
    
    
    46,695BALANCESEPTEMBER 30, 2006
    
    
    683
    
    
    $
    351,375
    
    
    
    7,399
    
    
    $
    3,806,469
    
    
    $
    
    
    
    $
    
    
    
    $
 Redeemable Common Shares
    
    

Shareholders EquityClass A
    
    
    Class B
    
    
    
    
    
    
    Other AccumulatedNumber of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Total
    
    
    Income (Loss)BALANCEDECEMBER 31, 2004
    
    
    708
    
    
    $
    1,958,940
    
    
    
    7,788
    
    
    $
    1,958,940Stock split
    
    
    
    
    
    
    (1,632,463
    )
    
    
    
    
    
    
    1,632,463Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (20,456
    )
    
    
    
    
    
    $
    (20,456
    )
    
    $
    (20,456
    )Unrealized loss on investments
(net of income tax benefit of $1,337)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (2,589
    )
    
    
    (2,589
    )
    
    
    (2,589
    )Total
comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (23,045
    )Class A Common Shares exchanged for Class B
Common Shares
    
    
    (14
    )
    
    
    (2,242
    )
    
    
    14
    
    
    
    2,242Common shares repurchased and retired
    
    
    (3
    )
    
    
    (1,036
    )
    
    
    (33
    )
    
    
    (11,395
    )Dilution of common shares to redemption value
    
    
    
    
    
    
    (6,090
    )
    
    
    
    
    
    
    (16,955
    )
    
    
    20,456
    
    
    
    2,589
    
    
    
    23,045BALANCESEPTEMBER 30, 2005
    
    
    691
    
    
    $
    317,109
    
    
    
    7,769
    
    
    $
    3,565,295
    
    
    $
    
    
    
    $
    
    
    
    $
   3




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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 For the Nine Months Ended September 30,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net loss on redeemable common shares
    
    $
    (45,403
    )
    
    $
    (20,456
    )Adjustments to reconcile net loss
to net cash provided by (used in) operating activities:Depreciation and amortization
    
    
    509,254
    
    
    
    195,882Deferred income taxes
    
    
    (225,572
    )
    
    
    (65,178
    )Effects of changes in operating assets and liabilities, net of acquired assets and liabilities:Accounts receivable
    
    
    (141,065
    )
    
    
    71,443Prepaid expenses, deposits, and other
    
    
    84,841
    
    
    
    39,895Other assets
    
    
    (57,102
    )
    
    
    50,502Claims payable
    
    
    (819,259
    )
    
    
    (259,791
    )Unearned premium revenue
    
    
    180,758
    
    
    
    700,866Accounts payable and accrued expenses
    
    
    (80,623
    )
    
    
    46,463Federal income tax payable
    
    
    104,336
    
    
    
    (192,983
    )Other liabilities
    
    
    (19,395
    )Net cash provided by (used in) operating activities
    
    
    (509,230
    )
    
    
    566,643CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of property, plant and equipment
    
    
    (128,941
    )
    
    
    (67,662
    )Acquisition of business, net of acquired cash
    
    
    (25,000
    )
    
    
    (17,407
    )Purchases of investments
    
    
    (1,300,000
    )
    
    
    (1,400,000
    )Sale of investments
    
    
    1,200,000
    
    
    
    1,200,000Net cash used in investing activities
    
    
    (253,941
    )
    
    
    (285,069
    )CASH FLOWS FROM FINANCING ACTIVITIES:Mortgage loan repayments
    
    
    (90,000
    )
    
    
    (90,000
    )Repayment of capital lease
    
    
    (147,459
    )
    
    
    (123,684
    )Repayments of note
    
    
    (71,250
    )
    
    
    (67,819
    )Repurchase of redeemable common shares
    
    
    (124,046
    )
    
    
    (12,430
    )Net cash used in financing activities
    
    
    (432,755
    )
    
    
    (293,933
    )DECREASE IN CASH
    
    
    (1,195,926
    )
    
    
    (12,359
    )CASHBeginning of period
    
    
    5,628,987
    
    
    
    4,304,797CASHEnd of period
    
    $
    4,433,061
    
    
    $
    4,292,438SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest
    
    
    106,212
    
    
    
    97,929Cash paid for income taxes
    
    
    254,260
    
    
    
    300,000Redeemed common shares in other current liabilities
    
    
    54,162
  4




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DCP HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2006 (UNAUDITED)
 1. BASIS OF PRESENTATION
  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Fully Insured
 Self-Insured
 ASO Fees
  5




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3. NEW ACCOUNTING PRONOUNCEMENTS
 Accounting for Stock Issued to Employees
   6




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4. ACQUISITION
   Preliminary
    
    
    Adjustments
    
    
    FinalCash consideration
    
    $
    250,000
    
    
    $
    25,000
    
    
    $
    275,000Interest bearing debt assumed
    
    
    241,985
    
    
    
    3,666
    
    
    
    245,651Transaction costs
    
    
    47,361
    
    
    
    
    
    
    
    47,361Total purchase price
    
    $
    539,346
    
    
    $
    28,666
    
    
    $
    568,012Current assets (includes cash of $279,954)
    
    $
    354,516
    
    
    $
    (28,307
    )
    
    $
    326,209Fixed assets
    
    
    4,336
    
    
    
    
    
    
    
    4,336Other assets
    
    
    59,320
    
    
    
    
    
    
    
    59,320Intangible assets
    
    
    450,000
    
    
    
    
    
    
    
    450,000Goodwill
    
    
    66,990
    
    
    
    69,365
    
    
    
    136,355Current liabilities assumed
    
    
    (358,659
    )
    
    
    (30,600
    )
    
    
    (389,259
    )Deferred tax liability
    
    
    (37,157
    )
    
    
    18,208
    
    
    
    (18,949
    )Net assets acquired
    
    $
    539,346
    
    
    $
    28,666
    
    
    $
    568,012
  5. INTANGIBLE ASSET IMPAIRMENT
  7




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6. DEFERRED COMPENSATION PLAN
  7. EARNINGS PER REDEEMABLE COMMON SHARE
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income (loss) accretive to (dilutive to) redeemable common shareholders
    
    $
    (117,325
    )
    
    $
    495
    
    
    $
    (45,403
    )
    
    $
    (20,456
    )Weighted average outstanding redeemable common shares used to compute
basic and diluted earnings per redeemable common share
    
    
    8,083
    
    
    
    8,460
    
    
    
    8,231
    
    
    
    8,476Basic and diluted earnings per redeemable common share
    
    $
    (14.52
    )
    
    $
    0.06
    
    
    $
    (5.52
    )
    
    $
    (2.41
    )
  8. SEGMENT INFORMATION
   8




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Fully-Insured
    
    Self-Insured
    
    Corporate,DHMO
    
    DHMO
    
    All Other
    
    TotalThree Months Ended September 30, 2006Revenues from external customers
    
    $
    9,347
    
    
    $
    3,892
    
    
    $
    25
    
    
    $
    13,264Healthcare services expense
    
    
    7,810
    
    
    
    3,347
    
    
    
    
    
    
    
    11,157Net investment income
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    56Interest expense
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    29Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    244
    
    
    
    244Income before taxes
    
    
    
    
    
    
    
    
    
    
    (156
    )
    
    
    (156
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    (39
    )Acquisition of fixed assets
    
    
    
    
    
    
    
    
    
    
    92
    
    
    
    92Identifiable assets
    
    
    
    
    
    
    
    
    
    
    11,151
    
    
    
    11,151Three Months Ended September 30, 2005Revenues from external customers
    
    $
    8,964
    
    
    $
    2,718
    
    
    $
    25
    
    
    $
    11,707Healthcare services expense
    
    
    7,561
    
    
    
    2,331
    
    
    
    
    
    
    
    9,892Net investment income
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    28Interest expense
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    34Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    67Income before taxes
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    4Income tax provision
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    4Acquisition of fixed assets
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    16Identifiable assets
    
    
    
    
    
    
    
    
    
    
    10,792
    
    
    
    10,792
 Fully-Insured
    
    Self-Insured
    
    Corporate,DHMO
    
    DHMO
    
    All Other
    
    TotalNine Months Ended September 30, 2006Revenues from external customers
    
    $
    28,132
    
    
    $
    10,087
    
    
    $
    92
    
    
    $
    38,311Healthcare services expense
    
    
    22,786
    
    
    
    8,658
    
    
    
    
    
    
    
    31,444Net investment income
    
    
    
    
    
    
    
    
    
    
    140
    
    
    
    140Interest expense
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    93Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    509
    
    
    
    509Income before taxes
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    (58
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    (13
    )Acquisition of fixed assets
    
    
    
    
    
    
    
    
    
    
    129
    
    
    
    129Identifiable assets
    
    
    
    
    
    
    
    
    
    
    11,151
    
    
    
    11,151Nine Months Ended September 30, 2005Revenues from external customers
    
    $
    25,570
    
    
    $
    7,732
    
    
    $
    65
    
    
    $
    33,367Healthcare services expense
    
    
    21,003
    
    
    
    6,617
    
    
    
    
    
    
    
    27,620Net investment income
    
    
    
    
    
    
    
    
    
    
    70
    
    
    
    70Interest expense
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    97Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    196
    
    
    
    196Income before taxes
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    21Income tax provision
    
    
    
    
    
    
    
    
    
    
    42
    
    
    
    42Acquisition of fixed assets
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    68Identifiable assets
    
    
    
    
    
    
    
    
    
    
    10,792
    
    
    
    10,792
  9




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
          10




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
    
    We generated net loss of approximately $(117,000) in the three months ended September 30,
2006 compared to net income of approximately $500 for the three months ended September 30,
2005.
    
    In July of 2006 Humana Dental provided us with written notice that it will be terminating
its network lease agreement with us on October 23, 2006. Accordingly, we wrote down the
remaining Humana Dental contract intangible asset.
    
    Our dental and vision products grew by 27,200 members, or 14.4%, from approximately
189,100 members at December 31, 2005 to approximately 216,300 members at September 30, 2006.
Our membership at September 30, 2006 includes 8,100 members from sales related to our new
DentaSelect PPO offering.
    
    We successfully implemented our new fully integrated dental benefits administration
system in February of 2006.
    11




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As of
    
    
    As ofSeptember 30,
    
    
    September 30,2006
    
    
    2006
    
    
    CHANGEMembership:Fully-insured DHMO
    
    
    138,500
    
    
    
    137,300
    
    
    
    0.9
    %Self-insured DHMO
    
    
    62,000
    
    
    
    44,800
    
    
    
    38.4
    %Corporate, All Other
    
    
    15,800
    
    
    
    2,400
    
    
    
    558.3
    %Total membership
    
    
    216,300
    
    
    
    184,500
    
    
    
    17.2
    %
 Three months
    
    
    Three monthsended
    
    
    endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    CHANGEPremium revenue:Fully-insured DHMO
    
    $
    9,347
    
    
    $
    8,964
    
    
    
    4.3
    %Self-insured DHMO
    
    
    3,892
    
    
    
    2,718
    
    
    
    43.2
    %Corporate, All Other
    
    
    25
    
    
    
    25
    
    
    
    0.0
    %Total premium revenue
    
    
    13,264
    
    
    
    11,707
    
    
    
    13.3
    %Healthcare service expense:Fully-insured DHMO
    
    
    7,810
    
    
    
    7,561
    
    
    
    3.3
    %Self-insured DHMO
    
    
    3,347
    
    
    
    2,331
    
    
    
    43.6
    %Total healthcare service expense
    
    
    11,157
    
    
    
    9,892
    
    
    
    12.8
    %Selling, general & administrative expenses:Corporate, All Other
    
    
    2,446
    
    
    
    1,884
    
    
    
    29.8
    %Investment income:Corporate, All Other
    
    
    56
    
    
    
    27
    
    
    
    107.4
    %Other income:Corporate, All Other
    
    
    155
    
    
    
    79
    
    
    
    96.2
    %Interest expense:Corporate, All Other
    
    
    (29
    )
    
    
    (34
    )
    
    
    -14.7
    %Income tax provision:Corporate, All Other
    
    
    (39
    )
    
    
    4
    
    
    
    -1075.0
    %
 Nine months
    
    
    Nine monthsended
    
    
    endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    CHANGEPremium revenue:Fully-insured DHMO
    
    $
    28,132
    
    
    $
    25,570
    
    
    
    10.0
    %Self-insured DHMO
    
    
    10,087
    
    
    
    7,732
    
    
    
    30.5
    %Corporate, All Other
    
    
    92
    
    
    
    65
    
    
    
    41.5
    %Total premium revenue
    
    
    38,311
    
    
    
    33,367
    
    
    
    14.8
    %Healthcare service expense:Fully-insured DHMO
    
    
    22,786
    
    
    
    21,003
    
    
    
    8.5
    %Self-insured DHMO
    
    
    8,658
    
    
    
    6,617
    
    
    
    30.8
    %Total healthcare service expense
    
    
    31,444
    
    
    
    27,620
    
    
    
    13.8
    %Selling, general & administrative expenses:Corporate, All Other
    
    
    7,409
    
    
    
    5,856
    
    
    
    26.5
    %Investment income:Corporate, All Other
    
    
    140
    
    
    
    70
    
    
    
    100.0
    %Other income:Corporate, All Other
    
    
    437
    
    
    
    157
    
    
    
    178.3
    %Interest expense:Corporate, All Other
    
    
    (93
    )
    
    
    (97
    )
    
    
    -3.7
    %Income tax provision:Corporate, All Other
    
    
    (13
    )
    
    
    42
    
    
    
    -131.0
    %
 12




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13




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Self-Insured Claim Revenue
 Self-Insured ASO Fees
       14




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15




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Nine months
    
    
    Nine monthsended
    
    
    endedSeptember 30, 2006
    
    
    September 30, 2005Net cash provided by (used in) operating activities
    
    $
    (509
    )
    
    $
    567Net cash used in investing activities
    
    
    (254
    )
    
    
    (285
    )Net cash used in financing activities
    
    
    (433
    )
    
    
    (294
    )Decrease in cash
    
    $
    (1,196
    )
    
    $
    (12
    )
          16




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
     17




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ITEM 4. CONTROLS AND PROCEDURES
  18




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PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   Total Numberof SharesPurchased as
    
    MaximumPart of a
    
    Number of SharesPublicly
    
    that May Yet BeTotal Class A
    
    Total Class B
    
    Average price
    
    Announced
    
    Purchased Undershares
    
    shares
    
    paid
    
    Plans or
    
    the Plans orPeriod
    
    purchased
    
    purchased
    
    per share
    
    Programs
    
    ProgramsJuly 1  July 31, 2006
    
    
    0
    
    
    
    0
    
    
    
    N/A
    
    
    
    0
    
    
    
    N/AAugust 1  August 31, 2006
    
    
    0
    
    
    
    12
    (a)
    
    $
    453.93
    
    
    
    0
    
    
    
    N/ASeptember 1  September 30, 2006
    
    
    1
    (a)
    
    
    11
    (a)
    
    $
    432.81
    
    
    
    0
    
    
    
    N/A
 
 (a)
    
    Repurchased from provider shareholder retirees in accordance with the Companys
obligations under its Amended and Restated Code of Regulations. 
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5.
    
    OTHER INFORMATION
  
 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.
 19




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SIGNATURES
  DCP HOLDING COMPANYNovember 14, 2006
    
    By:
    
    /s/ Robert C. Hodgkins, Jr.Robert C. Hodgkins, Jr.Vice President and Chief Financial Officer
 20




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Exhibit No.
    
    Item31.1
    
    Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 200231.2
    
    Certifications pursuant to Section 302 of Sarbanes-Oxley Act of 200232
    
    Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002