UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB>A1
(Mark one)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended NOVEMBER 30, 1995
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( ) TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from to
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Commission File Number: 0-16206
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OAK TREE MEDICAL SYSTEMS, INC.
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(Exact name of small busines issuer as specified in its charter)
DELAWARE 02-0401674
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(State or other jurisdiction of Incorporation (IRS employer
or organization) Identification No.)
16504 STONEHAVEN ROAD, MIAMI LAKES, FL 33014
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(Address of principal executive offices) (Zip Code)
(Issuer's telephone number) (305)822-8889
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 (X)Yes ( )No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
( )Yes ( )No
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstading of each of the issuer's classes of
common equity, as of the latest practicable date:
2,460,000 $.01 par value as of JANUARY 31, 1996
Transitional Small Business Disclosure Format (Check one): ( ) Yes ( ) No
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
On May 28, 1993 the Company acquired $5,000,000.00 in gold ore. On June 21, 1995
the Company exchanged this property for 6,000,000 shares of Accord Futronics,
Inc., representing 30% of the common stock of this private gold processing
company, which has a certified net worth of $45,000,000. For the three month
period ending November 30, 1995 the total assets of the Company increased from
$5,099,929 on November 30, 1994 to $8,663,476 in 1995, a 70% increase, of which
its cash position was $16,516.
Current liabilities of the Company have increased from $410,306 for the three
month period ending November 30, 1994 to $1,533,785 for the same period in 1995,
which is a 4-fold increase. Of this amount accounts payable in 1994 of $340,693
increased 2-fold in 1995 to $527,347 and debt increased 9-fold from $69,613 in
1994 to $594,037 in 1995.
For the same comparable period additional paid in capital did not change.
Accumulated deficits in 1994 of $3,366,218 as compared with $2,481,614 in 1995
reflected a decrease of $884,604. Shareholder equity in 1994 was $4,689,623
whereas 1995 indicates $5,574,227, for an increase of $884,604.
The Company has had revenues of $932,657 in this quarter as compared with no
revenues for the same quarter in 1994. General and administrative expenses have
increased $451,222 for a 1994 total of $106,969, to $558,191 in 1995 as a result
of increased acquisition related activity. The net income for the period was
$235,366 as opposed to a loss for the comparable period of $106,969. The income
per common share was $.09 as opposed to a loss for the same period of $.05 in
1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no sources of financing and, although it is exploring
funding opportunities, there can be no assurance that it will be successful. The
Company owns stock in a gold ore processing company and has a royalty
arrangement when its formerly owned gold ore reserve is processed, but there is
no assurance that this asset will be marketable or that royalties will be
derived.
<PAGE>
ACQUISITIONS
On January 17, 1995 the Company signed an agreement to acquire the assets of 1st
Coast Physical Medicine Associates, Inc., a five office physical therapy
practice and the attendant medical practice in Jacksonville, Florida.
The investment in Accord is accounted for under the cost method. Accord is a
non-public company with ownership concentrated within a small group of investors
(under 10). Although the Company owns more than 20% of the stock of Accord it
does not exert any significant influence in the operations of Accord.
No gain or loss was recognized on the exchange of gold ore for Accord stock as
the exchange was accounted for under the cost method for the reason stated in
the previous paragraph.
Period to period material changes in the financial information relates to the
acquisition by the Company of 1st Coast Physical Medicine Associates, Inc. The
acquisition greatly increased the financial position of the Company and its
operating income and expenses. 1st Coast is a five office physical therapy
practice and attending medical practice. The agreement to acquire 1st Coast was
signed January 17, 1995, and modified in August, 1995. The August modification
changed the method of payment of the purchase price to include stock of the
Company.
As a result of the acquisition of 1st Coast Medical Associates, Inc., the
Company acquired a business with revenues in excess of $3,000,000 annually and
generating annual profits. The Company also acquired as part of the purchase,
collectible accounts receivable in excess of $1,000,000.
The acquisition substantially enhanced the Company's financial condition and
operations. As a result, the Company's liquidity improved substantially.
<PAGE>
OAK TREE MEDICAL SYSTEMS,INC.
CONSOLIDATED FINANCIAL STATEMENTS
AS AT NOVEMBER 30, 1995 AND 1994
(UNAUDITED)
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
AS AT THE DATES INDICATED
(UNAUDITED)
ASSETS
NOVEMBER 30,
----------------------
1995 1994
---------- ----------
Current assets:
Cash $ 16,516 $ 12,054
Patient care receivables, less
allowance for possible losses 1,914,112 -
Prepaids and other 77,518 47,875
---------- ----------
Total current assets 2,008,146 59,929
Investments 5,000,000 5,000,000
Property and equipment (net) 275,735 -
Deposits and other 51,340 40,000
Excess of cost over fair value of
net assets acquired less
accumulated amortization 1,328,255 -
---------- ----------
Total assets $8,663,476 $5,099,929
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 527,347 $ 340,693
Note payable 100,000 -
Current maturity of long-term debt 368,000 69,613
Income taxes payable 538,438 -
---------- ----------
Total current liabilities 1,533,785 410,306
Deferred income tax 22,662 -
Long-term debt, less current maturities 126,037 -
Obligations to issue shares of
common stock 1,406,765 -
---------- ----------
Total liabilities 3,089,249 410,306
---------- ----------
Stockholders' equity:
Common stock, $.01 par value,
25,000,000 shares authorized,
2,046,969 shares issued and
outstanding 20,470 20,470
Additional paid in capital 8,035,371 8,035,371
Retained earnings (deficit) (2,481,614) (3,366,218)
---------- ----------
Total stockholders' equity 5,574,227 4,689,623
---------- ----------
Total liabilities and
stockholders' equity $8,663,476 $5,099,929
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1995 AND 1994
(UNAUDITED)
1995 1994
---- ----
Revenues:
Net patient services $2,003,592 $ -
---------- --------
Expenses:
Selling, general and administrative 1,294,615 177,770
Interest 5,000 -
---------- --------
Total expenses 1,299,615 177,770
---------- --------
Income (loss) before income taxes 703,977 (177,770)
Provision for income taxes 258,100 -
---------- --------
Net income (loss) $ 445,877 ($177,770)
========== ========
Income (loss) per common share $.17 ($.09)
==== =====
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1995 AND 1994
(UNAUDITED)
1995 1994
---- ----
Revenues:
Net patient services $932,657 $ -
-------- ---------
Expenses:
Selling, general and administrative 558,191 106,969
Interest 3,000 -
-------- ---------
Total expenses 561,191 106,969
-------- ---------
Income (loss) before income taxes 371,466 (106,969)
Provision for income taxes 136,100 -
-------- ---------
Net income (loss) $235,366 ($106,969)
======== =========
Income (loss) per common share $.09 ($.05)
==== =====
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1995 AND 1994
(UNAUDITED)
1995 1994
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $445,877 ($177,770)
Adjustments to reconcile net income
(loss) to net cash used in/provided
by operating activities:
Depreciation and amortization 92,500 -
Increase/decrease in patient care
receivables (155,837) -
Increase/decrease in prepaid and
other assets (532) -
Expenses paid in common shares of
stock - 35,038
Increase/decrease in accounts payable
and accrued expenses (831,368) 123,333
Increase/decrease in income taxes
payable 258,100 -
-------- --------
Net cash used in operating activities (191,260) (19,399)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on borrowing (49,170) -
Increase in borrowings 118,750 20,000
-------- --------
Net cash provided by financing activities 69,580 20,000
-------- --------
Net increase/decrease in cash (121,680) 601
Cash at beginning of year 138,196 11,453
-------- --------
Cash at end of period $ 16,516 $ 12,054
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1995 AND 1994
(UNAUDITED)
1995 1994
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $235,366 ($106,969)
Adjustments to reconcile net income
(loss) to net cash used in/provided by
operating activities:
Depreciation and amortization 46,250 -
Increase/decrease in patient care
receivables (150,349) -
Increase/decrease in prepaid and
other assets 2,500 -
Expenses paid in common shares of
stock - 35,038
Increase/decrease in accounts payable
and accrued expenses (304,075) 59,708
Increase/decrease in income taxes
payable 136,100 -
-------- --------
Net cash used in operating activities (34,208) (12,223)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on borrowing (22,203) -
Increase in borrowings 10,000 -
-------- --------
Net cash used in financing activities (12,203) -
-------- --------
Net increase/decrease in cash (46,411) (12,223)
Cash at beginning of period 62,927 24,277
-------- --------
Cash at end of period $ 16,516 $ 12,054
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD INDICATED
(UNAUDITED)
COMMON STOCK ADDITIONAL RETAINED TOTAL
----------------- PAID IN EARNINGS STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
------ ------ ---------- -------- -------------
Balance -
5/31/94 1,248,469 $ 12,485 $7,920,443 ($3,188,448) $4,744,480
Shares issued
in completion
of acquisition
of gold ore
reserves 693,750 6,938 (6,938) - -
Issuance of
shares of
common stock 104,750 1,047 121,866 - 122,913
Net income - - - 260,957 260,957
--------- -------- ---------- ---------- ----------
Balance,
5/31/95 2,046,969 20,470 8,035,371 (2,927,491) 5,128,350
Net income - - - 445,877 445,877
--------- -------- ---------- ---------- ---------
Balance,
11/30/95 2,046,969 $ 20,470 $8,035,371 $2,481,614) $5,574,227
========= ======== ========== =========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT NOVEMBER 30, 1995 AND 1994
(UNAUDITED)
NOTE 1 - PRESENTATION OF FINANCIAL STATEMENTS:
The accompanying consolidated financial statements are unaudited for the
reported interim period but include all adjustments of a normal and recurring
nature which management considers necessary for the fair presentation of results
for the six month periods ended November 30, 1995 and 1994.
<PAGE>
SIGNATURES
Pursuant to the Requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
OAK TREE MEDICAL SYSTEMS, INC.
January 26, 1996
By: /s/ IRWIN BOSH STACK
---------------------------------
Chairman/Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 16,516
<SECURITIES> 0
<RECEIVABLES> 2,012,112
<ALLOWANCES> 98,000
<INVENTORY> 0
<CURRENT-ASSETS> 2,008,146
<PP&E> 381,966
<DEPRECIATION> 106,231
<TOTAL-ASSETS> 8,663,476
<CURRENT-LIABILITIES> 1,533,785
<BONDS> 0
0
0
<COMMON> 20,470
<OTHER-SE> 5,553,757
<TOTAL-LIABILITY-AND-EQUITY> 8,663,476
<SALES> 932,657
<TOTAL-REVENUES> 932,657
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 558,191
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,000
<INCOME-PRETAX> 371,466
<INCOME-TAX> 136,100
<INCOME-CONTINUING> 235,366
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 235,366
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
