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 FEBRUARY 29, 1996
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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 business issuer as specified in its charter)
DELAWARE 02-0401674
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(State or other jurisdiction (IRS employer Identification No.)
of Incorporation or organization)
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 of each of the issuer's classes of common equity,
as of the latest practicable date.
2,446,969 $.01 PAR VALUE AS OF APRIL 15, 1996
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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 reserves. 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 $46,000,000. For the
three month period ending February 29, 1996 the total assets of the company were
$9,376,202, of which its cash position was $30,209.
Current liabilities of the company were $1,830,884 for the three month period
ending February 29, 1996.
For the three month period ending February 29, 1996 additional paid in capital
increased $1,402,765. This increase resulted from the issuance of 400,000
unregistered shares of common stock the company was obligated for under the
terms of the acquisition of the assets of First Coast Physical Medicine
Associates, Inc. Accumulated deficits reflected a decrease of $201,957.
Shareholder equity increased $1,608,722 for the three months ended February 29,
1996.
The company had revenues of $1,172,237 for the quarter. General and
administrative expenses for the three months ended February 29, 1996 were
$804,532. The net income for the period was $201,957. The income per common
share was $.08.
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.
NON-RECURRING CHARGES
Results of operations for the quarter ended February 29, 1996 includes
non-recurring accounting fees of approximately $25,000 incurred in connection
with the acquisition of the assets of First Coast Physical Medicine
Associates, Inc.
<PAGE>
OAK TREE MEDICAL SYSTEMS,INC.
CONSOLIDATED FINANCIAL STATEMENTS
AS AT FEBRUARY 29, 1996
(UNAUDITED)
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
AS AT FEBRUARY 29, 1996
(UNAUDITED)
ASSETS
Current assets:
Cash $ 30,209
Patient care receivables, less allowance
for possible losses 2,550,610
Prepaids and others 102,521
----------
Total current assets 2,683,340
Investment in equity securities 5,000,000
Property and equipment (net) 255,017
Deposits and other 51,340
Accounts receivable - other 75,500
Excess of cost over fair value of net
assets acquired less accumulated
amortization 1,311,005
----------
Total assets $9,376,202
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 601,416
Note payable 260,542
Current maturities of long-term debt 303,588
Income taxes payable 665,338
-----------
Total current liabilities 1,830,884
Deferred income tax 22,662
Long term debt, less current maturities 149,707
Obligation to issue shares of common stock 190,000
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Total liabilities 2,193,253
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Stockholders' equity:
Common stock, $.01 par value,
25,000,000 shares authorized,
2,446,969 shares issued and
outstanding 24,470
Additional paid in capital 9,438,136
Retained earnings (deficit) (2,279,657)
-----------
Total stockholders' equity 7,182,949
-----------
Total liabilities and stockholders' equity $ 9,376,202
===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTH PERIODS ENDED
FEBRUARY 29, 1996
(UNAUDITED)
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
------------- ------------
FEBRUARY 29, 1996
-------------------------------
Revenues:
Net patient services $1,172,237 $3,175,829
---------- ----------
Expenses:
Selling, general
and administrative 804,532 2,099,147
Interest 30,505 35,505
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Total expenses 835,037 2,134,652
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Income before income taxes 337,200 1,041,177
Provision for income taxes 135,243 393,343
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Net income $ 201,957 $ 647,834
========== ==========
Income per common share $.08 $.25
==== ====
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE AND THREE MONTH PERIODS ENDED
FEBRUARY 29, 1996
(UNAUDITED)
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
------------- ------------
FEBRUARY 29, 1996
----------------------------
OPERATING ACTIVITIES:
Net income $ 201,957 $ 647,834
Adjustments to reconcile net
income to net cash
used in/provided by
operating activities:
Depreciation and amortization 47,250 139,750
Increase/decrease in patient
care receivables (636,498) (792,335)
Increase/decrease in prepaids
and other assets (100,503) (101,035)
Increase/decrease in accounts
payable and accrued expenses 74,069 (757,299)
Increase/decrease in income
taxes payable 126,900 385,000
--------- ---------
Net cash used in operating activities (286,825) (478,085)
--------- ---------
INVESTING ACTIVITIES:
Acquisition of property and equipment (9,282) (9,282)
--------- ---------
Net cash used in investing activities (9,282) (9,282)
--------- ---------
FINANCING ACTIVITIES:
Principal payments on borrowings (150,742) (199,912)
Increase in borrowings 270,542 389,292
Obligations to issue shares of
common stock 190,000 190,000
--------- ---------
Net cash provided by
financing activities 309,800 379,380
--------- ---------
Net increase/decrease in cash 13,693 (107,987)
Cash at beginning of period 16,516 138,196
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Cash at end of period $ 30,209 $ 30,209
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
OAK TREE MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
COMMON STOCK ADDITIONAL RETAINED TOTAL
------------------------ PAID IN EARNINGS STOCKHOLDERS'
SHARES AMOUNT CAPITAL (DEFICIT) EQUITY
---------- -------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C>
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
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
Shares issued
in completion
of acquisition
of 1st Coast 400,000 4,000 1,402,765 -- 1,406,765
Net income -- -- -- 647,834 647,834
---------- ---------- ---------- ----------- ----------
Balance,
2/29/96 2,446,969 $ 24,470 $9,438,136 $(2,279,657) $7,182,949
========== ========== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT FEBRUARY 29, 1996
(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 three and nine month periods ended February 29, 1996.
<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.
April 14, 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-END> FEB-29-1996
<CASH> 30,209
<SECURITIES> 0
<RECEIVABLES> 2,648,610
<ALLOWANCES> 98,000
<INVENTORY> 0
<CURRENT-ASSETS> 2,683,340
<PP&E> 391,248
<DEPRECIATION> 136,231
<TOTAL-ASSETS> 9,376,202
<CURRENT-LIABILITIES> 1,830,884
<BONDS> 0
0
0
<COMMON> 20,470
<OTHER-SE> 7,158,479
<TOTAL-LIABILITY-AND-EQUITY> 9,376,202
<SALES> 1,172,237
<TOTAL-REVENUES> 1,172,237
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 804,532
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,505
<INCOME-PRETAX> 337,200
<INCOME-TAX> 135,243
<INCOME-CONTINUING> 201,957
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 201,957
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
