================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT
(PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
OAK TREE MEDICAL SYSTEMS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OAK TREE MEDICAL SYSTEMS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Parties:
(4) Date Filed:
================================================================================
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
2797 OCEAN PARKWAY
BROOKLYN, NEW YORK 11235
--------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 21, 1999
---------------------------------
To the Stockholders of
Oak Tree Medical Systems, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Oak
Tree Medical Systems, Inc., a Delaware corporation (the "Company") for the
fiscal year ended May 31, 1998, will be held at 10:00 a.m., local time, on
Wednesday, July 21, 1999, at the Hotel Inter-Continental Miami, 100 Chopin
Plaza, Miami, Florida 33131 for the following purposes:
(1) To elect five members to the Company's Board of Directors to
hold office until their terms shall expire or until their
successors are duly elected and qualified; and
(2) To transact such other business as may properly come before
the meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on June 18, 1999
as the record date for determining those stockholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments thereof.
Whether or not you expect to be present, please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors,
Henry Dubbin
President
Brooklyn, New York
July 1, 1999
THIS IS AN IMPORTANT MEETING AND ALL STOCKHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. THOSE STOCKHOLDERS WHO ARE UNABLE TO ATTEND ARE RESPECTFULLY
URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE.
STOCKHOLDERS WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING,
REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
OAK TREE MEDICAL SYSTEMS, INC.
--------------------------------
PROXY STATEMENT
--------------------------------
DATE, TIME AND PLACE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Oak Tree Medical Systems, Inc., a Delaware
corporation (the "Company"), of proxies from the holders of the Company's Common
Stock, par value $0.01 per share (the "Common Stock"), for use at the Annual
Meeting of Stockholders of the Company for the fiscal year ended May 31, 1998
("Fiscal 1998"), to be held on the 21st day of July, 1999, at the Hotel
Inter-Continental Miami, 100 Chopin Plaza, Miami, Florida 33131 or any
adjournment(s) thereof (the "Annual Meeting"), pursuant to the enclosed Notice
of Annual Meeting. The approximate date this Proxy Statement and the enclosed
form of proxy are first being sent to holders of Common Stock is July 1, 1999.
The complete mailing address, including zip code, of the principal executive
offices of the Company is 2797 Ocean Parkway, Brooklyn, New York 11235.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of
the Company. The giving of a proxy does not preclude the right to vote in person
should any stockholder giving the proxy so desire. Stockholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Secretary
of the Company at the Company's headquarters a written revocation or duly
executed proxy bearing a later date; however, no such revocation will be
effective until written notice of the revocation is received by the Company at
or prior to the Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Stockholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone and facsimile. They will receive no
compensation therefor in addition to their regular salaries. Arrangements will
be made with banks, brokers and other custodians, nominees and fiduciaries to
forward copies of the proxy material to their principals and to request
authority for the execution of proxies. The Company will reimburse such persons
for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's stockholders will consider and
vote upon the following matters:
1. The election of five directors to serve until the next Annual
Meeting of Stockholders or until their successors are duly
elected and qualified; and
2. Such other business as may properly come before the Annual
Meeting, including any adjournments thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (i) FOR the election of the five nominees for director named
below; and (ii) in favor of all other proposals as may properly come before the
Annual Meeting. In the event a stockholder specifies a different choice by means
of the enclosed proxy, his shares will be voted in accordance with the
specification so made.
<PAGE>
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors has set the close of business on June 18, 1999
(the "Record Date"), as the record date for determining stockholders of the
Company entitled to notice of and to vote at the Annual Meeting. As of the
Record Date there were 5,637,626 shares of Common Stock issued and outstanding,
all of which are entitled to be voted at the Annual Meeting. Holders of Common
Stock are entitled to one vote per share on each matter that is submitted to
stockholders for approval.
The attendance, in person or by proxy, of the holders of shares of
Common Stock representing a majority of the outstanding shares of such stock is
necessary to constitute a quorum. At the Annual Meeting, directors are elected
by a plurality of the votes of shares present in person or represented by proxy.
Any other matter that may be submitted to a vote of the stockholders will be
approved by an affirmative vote of the majority of shares present in person or
represented by proxy at the meeting and entitled to vote, unless otherwise
required by law or the Company's Certificate of Incorporation or Bylaws.
Abstentions are considered as shares present and entitled to vote for purposes
of determining the presence of a quorum and for purposes of determining the
outcome of any matter submitted to the stockholders for a vote, but are not
counted as votes "for" or "against" any matter. The inspectors of election will
treat shares referred to as "broker or nominee non-votes" (shares held by
brokers or nominees as to which instructions have not been received from the
beneficial owners or persons entitled to vote and the broker or nominee does not
have discretionary voting power on a particular matter) as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. For purposes of determining the outcome of any matter as to which the
proxies reflect broker or nominee non-votes, shares represented by such proxies
will be treated as not present and not entitled to vote on that subject matter
and therefore will not be considered by the inspectors of election when counting
votes cast on the matter (even though those shares are considered entitled to
vote for quorum purposes and may be entitled to vote on other matters.)
Accordingly, abstensions and broker or nominee non-votes will not have the same
effect as a vote against the election of any director. If less than a majority
of the outstanding shares of Common Stock are represented at the Annual Meeting,
a majority of the shares so represented may adjourn the Annual Meeting from
time-to-time without further notice.
SECURITY OWNERSHIP
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock as of June 11, 1999 by (a)
each person known to the Company to own beneficially more than five percent of
the Company's outstanding Common Stock, (b) each director (including nominees)
who owns any such shares, (c) each Named Executive Officer who owns any such
shares (see "Executive Compensation and Other Information--Summary of Cash and
Certain Other Compensation"), and (d) the directors and executive officers of
the Company as a group:
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)
-----------------------------
NAME OF BENEFICIAL OWNER SHARES PERCENT
- ------------------------ ------ -------
<S> <C> <C>
Burton Dubbin..................................................... 925,000(2) 14.54%
21394 Marina Cove Circle, Unit H11
North Miami Beach, FL 33180
Henry Dubbin...................................................... 772,875(3) 13.13%
10155 Collins Avenue, Suite 607
Bal Harbor, FL 33154
Simon Boltuch..................................................... 0 0
c/o Oak Tree Medical Systems
2797 Ocean Parkway
Brooklyn, NY 11235
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)
-----------------------------
NAME OF BENEFICIAL OWNER SHARES PERCENT
- ------------------------ ------ -------
<S> <C> <C>
Fred L. Singer.................................................... 15,000(4) *
9240 West Bay Harbor Dr., Apt. 3-C
Bal Harbor Islands, FL 33154
Jerry D. Klepner.................................................. 20,000(4) *
c/o Black Kelley Scruggs & Healey
1801 K Street, N.W. Suite 201L
Washington, D.C. 20006
Maxwell M. Rabb................................................... 20,000(4)(5) *
c/o Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
Scott S. Rosenblum................................................ 20,000(4)(5) *
c/o Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
Signature Equities Agency GMBH.................................... 598,000 10.61%
100 Bush Street
San Francisco, CA 94101
All directors and executive officers
as a group (6 persons)....................................... 1,772,875(6) 26.51%
</TABLE>
- ----------------------
* Less than one percent.
(1) Based on 5,637,626 shares of Common Stock outstanding. Pursuant to the
rules of the Securities and Exchange Commission (the "Commission"),
certain shares of Common Stock which a person has the right to acquire
within 60 days of June 11, 1999 pursuant to the exercise of stock options
are deemed to be outstanding for the purpose of computing the percentage
ownership of such person but are not deemed outstanding for the purpose
of computing the percentage ownership of any other person.
(2) Includes (i) 225,000 shares of Common Stock subject to currently
exercisable options, (ii) 500,000 shares subject to currently exercisable
options held in the name of Progressive Planning Associates, Inc., (iii)
150,000 shares held directly and (iv) 50,000 shares held indirectly.
(3) Includes (i) 522,875 shares of Common Stock that Mr. Dubbin beneficially
owns through Nevada Minerals Corporation, a corporation of which he is
the majority stockholder and president, and (ii) 250,000 shares of Common
Stock subject to currently exercisable options.
(4) Represents shares of Common Stock subject to currently exercisable
options.
(5) Mr. Rabb is of counsel to and Mr. Rosenblum is a partner at the law firm
of Kramer Levin Naftalis & Frankel LLP ("Kramer Levin"). While the
reporting person owns directly no securities of the Company, Kramer Levin
owns securities of the Company. Messrs. Rabb and Rosenblum disclaim
beneficial ownership of the securities held by Kramer Levin, except to
the extent of his pecuniary interest therein, if any.
(6) Includes 1,050,000 shares subject to presently exercisable options.
3
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Company's Certificate of Incorporation provide that the number of
directors constituting the Company's Board of Directors shall consist of not
less than one member, the exact number of directors to be determined from time
to time by resolution adopted by the Board of Directors. The Company's Bylaws
provide that the number of directors shall be fixed from time to time, within
the limits specified by the Certificate of Incorporation, by resolution of the
Board of Directors. The Board of Directors has fixed five as the number of
directors that will constitute the Board for the ensuing year. Each director
elected at the Annual Meeting will serve for a term expiring at the Annual
Meeting of Stockholders for fiscal 1999, or until his successor has been duly
elected and qualified.
NOMINEES
Each of the incumbent directors has been nominated as a director to be
elected at the Annual Meeting by the holders of Common Stock and proxies will be
voted for such persons absent contrary instructions. See "Management --
Executive Officers and Directors" for the biographies of the incumbent
directors.
The Board of Directors has no reason to believe that any nominee will
refuse to act or be unable to accept election; however, in the event that a
nominee for a directorship is unable to accept election or if any other
unforeseen contingencies should arise, it is intended that proxies will be voted
for the remaining nominees and for such other person as may be designated by the
Board of Directors, unless it is directed by a proxy to do otherwise.
Henry Dubbin has served as Director since May 1993. Mr. Singer has
served as a director since April 1997. Messrs. Klepner, Rabb and Rosenblum have
served as directors since October 1998.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- -------------------------------- --- --------------------------------
<S> <C> <C>
Henry Dubbin.................... 83 President and Director
Simon Boltuch................... 51 Chief Financial Officer
Fred Singer..................... 65 Vice President and Director
Jerry D. Klepner................ 54 Director
Maxwell M. Rabb................. 88 Director
Scott S. Rosenblum.............. 49 Director
</TABLE>
4
<PAGE>
HENRY DUBBIN has served as President of the Company since April 1997
and a director of the Company since May 1993. Mr. Dubbin also served as Vice
Chairman of the Board of Directors and Vice President of the Company from May
1993 to April 1997. Mr. Dubbin currently is the President of Nevada Minerals
Corporation, a diversified company engaged in the mining business. From 1955 to
1992, Mr. Dubbin worked with Canaveral International, Inc., a diversified public
company, from which he retired as Chairman of the Board.
FRED L. SINGER has served as a member of the Board of Directors since
April 1997 and as Vice President of the Company since August 1997. Since 1963,
Mr. Singer has served as director, producer and cinematographer for Coronado
Productions, a/k/a Coronado Studios, a video production company.
SIMON BOLTUCH, Chief Financial Officer, has served as Chief Financial
Officer of the Company since September 1998. Prior to joining the Company, Mr.
Boltuch served as Chief Financial Officer of News America In-Store from 1996 to
1998. Mr. Boltuch served as Vice President of Taxation for News America
Publishing, Inc. from 1992 to 1995. From 1980 to 1991, Mr. Boltuch served as
Vice President Controller of News America Publishing, Inc. Mr. Boltuch is a
certified public accountant.
JERRY D. KLEPNER has served as a member of the Board of Directors since
October 1998 and has served as Managing Director at Black, Kelly, Scruggs &
Healey since February 1998. From June 1996 to February 1998, Mr. Klepner was a
Senior Vice President at Ketchum Public Relations, a public relations firm. From
January 1993 to June 1996, he served as Assistant Secretary for Legislation at
the U.S. Department of Health and Human Services under Secretary Donna Shalala
as an advocate before the U.S. Congress on health and human services
initiatives. He also served as Acting Chief of Staff and Transition Director for
Secretary of Labor Alexis Herman during the spring of 1997, and was a Senior
Advisor for Domestic Policy to the Clinton-Gore Transition Team from November
1992 to January 1993. From 1987 to 1992, Mr. Klepner was Director of Legislation
for the American Federation of State, County and Municipal Employees, a health
care and public sector union.
MAXWELL M. RABB has served as a member of the Board of Directors since
October 1998 and has served as of counsel to the law firm of Kramer, Levin,
Naftalis & Frankel since 1991 and was a partner at Stroock & Stroock & Lavan
from 1958 to 1981 and 1989 to 1991. Ambassador Rabb served as the United States
Ambassador to Italy from 1981 to 1989. Ambassador Rabb is a member of the board
of directors of Sterling National Bank, MIC Industries, Inc., Data Systems and
Software, Inc. and Preferred Employers Holdings, Inc. Ambassador Rabb also
serves as a trustee or director of the Cardinals Cooke and O'Connor Inter City
Scholarship Fund, the Lighthouse, the Eisenhower Institute, the George Marshall
International Center and Seaman's Church Institute.
SCOTT S. ROSENBLUM has served as a member of the Board of Directors
since October 1998 and has been a partner of Kramer, Levin, Naftalis & Frankel
LLP since 1991 and its Managing Director since 1994. Mr. Rosenblum is a member
of the board of directors of several public companies, including Greg Manning
Auctions, Inc., a collectibles auction house, Temco Services Industries, Inc.,
an industrial maintenance company, and I.T. International Theatres, Ltd., a
leading motion picture distributor in Israel and central Europe.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal 1998, there were a total of 16 meetings and actions by
unanimous consent of the Board of Directors. Each director participated in at
least 75 percent of the aggregate of the number of such meetings.
During fiscal 1998, the Company's Board did not have any committees.
DIRECTOR COMPENSATION
Messrs. Singer, Klepner, Rabb and Rosenblum receive director fees of
$1,000 per month and they are reimbursed for any expenses incurred on behalf of
the Company. Directors, other than officers of the Company, are reimbursed for
expenses pertaining to attendance at meetings of the Company's Board of
Directors, including travel, lodging and meals.
5
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries to or on behalf
of the Company's Chief Executive Officer and each of the most highly compensated
executive officers of the Company who were serving as executive officers at the
end of the last completed fiscal year, whose total annual salary and bonus,
determined as of the end of the last fiscal year, exceeded $100,000
(collectively, the "Named Executive Officers"), for the fiscal years ended May
31, 1998, 1997, and 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) -----------------
----------------------------------- NO. OF SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS ($) OPTIONS COMPENSATION
--------------------------- ----- -------- --------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Henry Dubbin 1998 $ 32,000 $ 0 0 $ 0
President and Chief Executive 1997 15,414 0 0 0
Officer.......................... 1996 0 0 0 0
Gary Danziger 1998 $147,000 $ 0 0 $ 94,924(2)
Chief Operating Officer.......... 1997(3) 120,641 100,000 350,000 0
</TABLE>
- -------------------------
(1) The column for "Other Annual Compensation" has been omitted because there
is no compensation required to be reported in such columns. The aggregate
amount of perquisites and other personal benefits provided to each
officer listed above is less than 10% of the total annual salary and
bonus of such officer.
(2) Represents settlement payment upon Mr. Danziger's resignation from the
Company in February 1998 and termination of his employment agreement,
deferred compensation and options to acquire 350,000 shares of Common
Stock.
(3) Includes deferred compensation of $100,000 as of May 31, 1997, pursuant
to Mr. Danziger's amended employment agreement with the Company.
OPTION GRANTS
During Fiscal 1998, the Company did not make any stock option grants to
the Named Executive Officers.
STOCK OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning option
exercises in Fiscal 1998, the number of stock options held by the Named
Executive Officers as of May 31, 1998 and the value (based on the fair market
value of a share of stock at fiscal year-end) of in-the-money options
outstanding as of such date.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED MAY 31, 1998 MAY 31, 1998(1)
ON VALUE -------------------------- ------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Henry Dubbin............... 0 0 250,000 0 $42,969 $0
Fred Singer................ 5,000 5,000 15,000 0 $17,578 $0
Gary Danziger.............. 0 0 0 0 0 0
</TABLE>
- -------------
(1) Value is calculated on the basis of the difference between the option
exercise price and the average of the bid and asked prices for the Common
Stock at May 29, 1998 as quoted on the over-the-counter market,
multiplied by the number of shares underlying the option.
6
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Henry Dubbin, as amended
effective June 1998, expiring on June 14, 2002 and providing for a salary of
$50,000 per year. Mr. Dubbin received a salary of $32,000 in fiscal 1998 and
$15,414 in fiscal 1997 and waived his salary for fiscal 1995.
Gary Danziger had a three-year employment agreement with the Company, a
amended in July 1997, expiring in October 1999 which provided for (i) an annual
salary of $260,000, (ii) deferred compensation for the year ended May 31, 1997
of either $100,000 or 50,000 shares, (iii) incentive bonuses of up to $30,000
per quarter, (iv) options to acquire 350,000 shares of Common Stock, exercisable
at $1.00 per share until October 1, 1998, (v) a loan facility of $350,000,
payable in three years from the date of borrowing at interest of 7% per annum
and (vi) severance equal to 200% or 100% of salary if terminated during twelve
months ended September 30, 1998 or 1999, respectively. In February 1998, Mr.
Danziger resigned all positions with the Company and his employment agreement
was terminated, including his right to receive 50,000 shares of Common Stock
(which was recorded as deferred compensation of $100,000) and his options to
acquire 350,000 shares of Common Stock in exchange for $60,000 in cash. In
addition, the Company forgave outstanding net loans to Mr. Danziger in the
amount of $34,924.
CERTAIN TRANSACTIONS
Mr. Burton Dubbin, the son of Mr. Henry Dubbin, was an employee of the
Company from April 1997 through August 1997. During fiscal 1998, Mr. Burton
Dubbin received total compensation of $125,000 from the Company, which consisted
of salary for the months he served as an employee of the Company and consulting
fees for the months he served as a consultant to the Company. In August 1997,
after termination of his employment with the Company, Mr. Burton Dubbin entered
into a consulting agreement ("Consulting Agreement") for a period of two years
at a fee of $150,000 per year, plus 125,000 shares of Common Stock, with 25,000
shares issued immediately and, the remaining 100,000 shares were issued over a
20 month period at 5,000 shares per month. The Company amended the Consulting
Agreement to extend the term of the agreement to August 2002, and grant 500,000
options to purchase the Common Stock of the Company at an exercise price of
$2.17.
In October 1998, Messrs. Rabb and Rosenblum were appointed to the Board
of Directors of the Company. Mr. Rabb is of counsel to and Mr. Rosenblum is a
partner of the law firm of Kramer Levin Naftalis & Frankel LLP which has served
as outside counsel to the Company during fiscal 1998 and received customary fees
for legal services.
CHANGE IN CONTROL
The Company is in negotiations to acquire certain companies whose
assets consist primarily of management contracts with approximately 30 medical
practices and MRI facilities located in the greater New York metropolitan area.
The Company intends to finance the proposed acquisition through issuance of debt
and equity securities of the Company, which, if consummated, will result in a
substantial change to the Company's current debt and equity structure and could
result in a change in control of the Company. There can be no assurance,
however, that the Company will consummate the purchase of these assets or meet
its obligations of raising capital to complete the acquisition or that all the
other conditions to closing will be met by any of the parties to the
transaction.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and executive officers, and persons who
own more than 10 percent of the Company's Common Stock, to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of Common Stock. Officers, directors and greater
than 10 percent stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and representations that no other reports
were required, during the fiscal year ending December 31, 1998 all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10
percent beneficial owners were complied with, except that Mr. Henry Dubbin did
not file Form 4s to report his disposition of shares.
7
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Simon Krowitz Bolin & Associates, P.A. ("Simon Krowitz") served as the
independent auditors from January 4, 1996 to April 29, 1997 and as the
independent auditors of the Company for the fiscal year ended May 31, 1996.
Effective April 29, 1997, Simon Krowitz resigned as the Company's independent
auditors. The report of Simon Krowitz on the Company's financial statements for
the fiscal year ended May 31, 1996 contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principle. In connection with the audit of the Company's financial
statements for the fiscal year ended May 31, 1996 and through April 29, 1997,
there were no disagreements between the Company and Simon Krowitz on any matters
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.
Effective June 6, 1997, the Company appointed Most Horowitz & Company,
LLP, as its independent auditors. Most Horowitz & Company served as the
Company's independent public accountants for its fiscal ended May 31, 1997 and
fiscal year ended May 31, 1998. No independent public accountant has been
formally selected by the Company for the current fiscal year. A formal selection
of the Company's independent public accountants will be considered by the
Company's newly-elected Board of Directors at a meeting of the Board of
Directors to be held subsequent to the Company's Annual Meeting of Stockholders.
Representatives of Most Horowitz & Company are not expected to be present at the
Company's Annual Meeting of Stockholders, but any stockholder who wishes to
communicate with representatives of Most Horowitz & Company should communicate
directly with the Engagement Partner at 1133 Avenue of the Americas, New York,
New York 10036.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as, in
their discretion, they may deem appropriate unless they are directed by a proxy
to do otherwise.
INFORMATION CONCERNING STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a stockholder intending to present a proposal to be presented at the
Fiscal 1999 Annual Meeting of Stockholders must deliver a proposal in writing to
the Company's principal executive offices on or before March 1, 2000.
By Order Of The Board Of Directors
Henry Dubbin
PRESIDENT
Brooklyn, New York
July 1, 1999
8
<PAGE>
OAK TREE MEDICAL SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY
The undersigned, a stockholder of OAK TREE MEDICAL SYSTEMS, INC., a
Delaware corporation (the "Company"), hereby appoints Henry Dubbin and Fred
Singer, and each of them, as proxies for the undersigned, each with full power
of substitution, and hereby authorizes them to represent and to vote, as
designated below, all of the shares of stock of the Company held of record by
the undersigned at the close of business on June 18, 1999 at the Annual Meeting
of Stockholders of the Company to be held at Hotel Inter-Continental Miami, 100
Chopin Plaza, Miami, Florida 33131, on July 21, 1999 at 10:00 a.m., local time,
and at any adjournments thereof.
The Board of Directors unanimously recommends a vote FOR each proposal.
1. ELECTION OF Henry Dubbin
DIRECTORS Jerry D. Klepner
Maxwell M. Rabb
Scott S. Rosenblum
Fred Singer
[ ] VOTE FOR all nominees listed above, except authority to
vote withheld from the following nominees
(if any).______________________________________________
[ ] AUTHORITY TO VOTE WITHHELD from all nominees.
2. Upon such other matters as may properly come before such Annual
Meeting or any adjournments thereof. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Annual Meeting and any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ALL OF THE PROPOSALS.
(See reverse side)
<PAGE>
(Continued from other side)
The undersigned hereby acknowledges receipt of (1) the Notice of Annual
Meeting for the Annual Meeting for the Fiscal Year Ended May 31, 1998, (2)
the Proxy Statement, and (3) the Company's Form 10-KSB for the fiscal year ended
May 31, 1998.
Dated: _________________, 1999
__________________________________
(Signature)
__________________________________
(Signature if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even though you now plan to attend the meeting. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
When shares are held by joint tenants, both should sign. If a corporation,
please sign in full corporate name by president or other authorized officer. If
a partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE
PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
