UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 12, 1997
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OAK TREE MEDICAL SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-16206 02-0401674
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2500 Westchester Avenue, Suite 306, Purchase, New York 10577
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 253-9494
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(Former name or former address, if changed since last report.)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Consolidated Financial Statements
(c) Exhibits
99.2 Press Release, dated February 27, 1997
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PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
These unaudited pro forma condensed consolidated financial statements give
effect to the sale of certain operations of Oak Tree Medical Systems, Inc. (the
"Company"), as set forth in Note 1 to these financial statements, as if this
transaction had occurred, for balance sheet purposes, on November 30, 1996 and,
for statement of operations purposes, as of June 1, 1995. These unaudited pro
forma condensed consolidated financial statements should be read in conjunction
with the Company's audited consolidated financial statements and notes thereto,
for the fiscal year ended May 31, 1996, included in Form 10-KSB, and its
unaudited consolidated financial statements for the six months ended November
30, 1996, included in Form 10-QSB. The pro forma information is not necessarily
indicative of the Company's future results.
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OAK TREE MEDICAL SYSTEMS, INC., AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
November 30, 1996
(000's)
Pro Forma
ASSETS Historical Adjustment #1 Pro Forma
---------- ------------- ---------
CURRENT ASSETS
Cash $ 661 $ 661
Patient care receivables 5,029 $(2,800) 2,229
Due from purchaser 100 100
Prepaids and other current assets 78 78
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TOTAL CURRENT ASSETS 5,768 (2,700) 3,068
Investments 5,000 5,000
Property and equipment 659 (50) 609
Other assets 153 (40) 113
Goodwill 1,222 (1,222)
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TOTAL ASSETS $ 12,802 $(4,012) $ 8,790
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 760 $ (75) $ 685
Notes payable 1,628 (1,850) (222)
Current maturities of long-term debt 329 329
Deferred income taxes payable 972 972
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TOTAL CURRENT LIABILITIES 3,689 (1,925) 1,764
Long-term debt 231 231
Obligation to issue
shares of common stock 350 (350)
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TOTAL LIABILITIES 4,270 (2,275) 1,995
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STOCKHOLDERS' EQUITY
Common stock 26 (4) 22
Additional paid-in capital 9,908 (696) 9,212
Deficit (1,402) (1,037) (2,439)
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TOTAL STOCKHOLDERS' EQUITY 8,532 (1,737) 6,795
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 12,802 $(4,012) $ 8,790
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OAK TREE MEDICAL SYSTEMS, INC., AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended November 30, 1996
(000's, Except per share data)
Pro Forma
Historical Adjustment #2 Pro Forma
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REVENUE $ 1,237 $(353) $ 884
SELLING, GENERAL AND
ADMINISTRATION (631) 183 (448)
INTEREST (39) 40 1
DEPRECIATION AND
AMORTIZATION (63) 41 (22)
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INCOME BEFORE INCOME
TAXES 504 (89) 415
INCOME TAXES (170) 27 (143)
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NET INCOME $ 334 $ (62) $ 272
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INCOME PER COMMON SHARE $ 0.12 $0.12
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AVERAGE NUMBER OF SHARES 2710 2310
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OAK TREE MEDICAL SYSTEMS, INC., AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended May 30, 1996
(000's, Except per share data)
Pro Forma
Historical Adjustment #2 Pro Forma
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REVENUE $ 4,664 $(4,364) $ 300
SELLING, GENERAL AND
ADMINISTRATION (3,107) 2,924 (183)
INTEREST (131) 87 (44)
DEPRECIATION AND
AMORTIZATION (181) 142 (39)
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INCOME BEFORE INCOME
TAXES AND EXTRAORDINARY 1,245 (1,211) 34
INCOME TAXES (375) 363 (12)
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INCOME BEFORE
EXTRAORDINARY 870 (848) 22
CANCELLATION OF DEBT 170 170
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NET INCOME $ 1,040 $ (848) $ 192
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INCOME PER COMMON SHARE $ 0.39 $0.08
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AVERAGE NUMBER OF SHARES 2679 2279
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Note 1
On February 6, 1997, the Company: (1) sold substantially all the assets
and assigned certain liabilities of the physical therapy and rehabilitation care
centers and related medical practices in Orange Park (ACORN CORF I, Inc.) and
Jacksonville (Riverside CORF, Inc.), Florida, and (2) sold all the outstanding
shares of Oak Tree Receivables, Inc. ("Receivables"), a wholly-owned subsidiary
of the Company. The purchase priced consisted of $200,000 in cash, $100,000
payable upon closing by payment against a secured loan, $50,000 on April 6, 1996
and $50,000 on May 6, 1996.
The assets of Receivables consisted of certain patient care receivables
and a secured loan. The Company also transferred to the lender, accounts
receivable of $700,000, which had been additional collateral under the secured
loan. 40% of the collections in excess of amounts owed the lender, if any, will
be returned to the Company.
In connection with the sale, the Company terminated an employment
agreement and had 400,000 shares of common stock of the Company returned. The
shares were valued at $1.75 per share, the fair value of the shares. In
addition, the Company was relieved of its obligation to issue additional 145,000
shares of the Company's common stock.
Adjustment (1) to record the pro forma sale
Total purchase price
Due from purchaser $100
Note payable 100
Accounts payable 75
Note payable 1,750
Obligation to issue shares of common stock 350
Common stock 4
Additional paid-in capital 696
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Total purchase price 3,075
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Cost of sale
Accounts receivable sold 2,100
Accounts receivable transferred 700
Property and equipment 50
CORF licenses 40
Excess of cost over fair value of assets acquired 1,222
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Total cost of sale 4,112
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Loss on sale $1,037
======
Adjustment (2) to remove operations of sold centers
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Note 2
The pro forma condensed consolidated financial does not reflect the
acquisition of certain physical therapy centers located in Long Island, New
York, in December 1996 or the write-down of the investment as of February 28,
1997.
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SIGNATURES
Pursuant to the requirements 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.
By: /s/ William Kedersha
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Name: William Kedersha
Title: Chief Executive Officer
Date: March 7, 1997
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EXHIBIT 99.2
OAK TREE MEDICAL SYSTEMS, INC.
2500 Westchester Avenue, Suite 306
Purchase, NY 10577
FOR IMMEDIATE RELEASE CONTACT:
WILLIAM KEDERSHA, CEO
OAK TREE MEDICAL SYSTEMS, INC.
(914) 253-9494
PURCHASE, NEW YORK, February 27, 1997--Oak Tree Medical Systems, Inc. has
announced that it intends to write-off, as of the close of its third fiscal
quarter ending today, its investment in Accord Futronics, Inc., which has been
valued on Oak Tree's balance sheet at $5,000,000. Oak Tree received its interest
in Accord in June 1995, in exchange for the transfer to Accord of the shares of
a subsidiary of the Company holding 50,000 tons of gold ore, with an appraised
value of $5,000,000. The Company has determined to write-down the Accord
interest because of the absence of current financial information for Accord and
management's present inability to determine, after due investigation and
inquiry, whether any value can be realized on the Accord interest.
Commenting on the write-off, William Kedersha, the Company's Chief Executive
Officer, said: While prudent accounting practices require us at this time to
remove the Accord interest from our balance sheet, we are not abandoning the
asset. We intend to continue to pursue possibilities of realizing value on the
Accord interest, although there can be no assurance that our efforts in this
regard will be successful.
Oak Tree Medical Systems, Inc. owns or operates eight physical therapy clinics,
and two hospital contracts, primarily in the New York metropolitan area.
