<PAGE i>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary proxy statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SUBSTANCE ABUSE TECHNOLOGIES, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
SUBSTANCE ABUSE TECHNOLOGIES, 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 transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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 party:
(4) Date filed:
- --------------------------------
1. Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE ii>
SUBSTANCE ABUSE TECHNOLOGIES, INC.
4517 N.W. 31st Avenue
Ft. Lauderdale, Florida 33309
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of
SUBSTANCE ABUSE TECHNOLOGIES, INC.
The Special Meeting of Stockholders of Substance Abuse
Technologies, Inc. (the "Company") will be held at the Westin
Hotel, 400 Corporate Drive, Fort Lauderdale, Florida 33334, on
Monday, May 5, 1997, at 10:00 a.m., Eastern Standard Time (the
"Special Meeting"), for the following purpose:
To approve an increase in number of authorized shares
of the Company's Common Stock, par value $.01 per
share, from 50,000,000 shares to 65,000,000 shares.
Only stockholders of record at the close of business on March 26,
1997 are entitled to notice of, and to vote at, the Special
Meeting or any adjournment thereof.
By Order of the Board of Directors
/s/Robert W. Berend
----------------------------------
Robert W. Berend
Secretary
April 7, 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING,
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE. THE PROXY MAY BE REVOKED IN WRITING PRIOR TO
THE SPECIAL MEETING OR, IF YOU ATTEND THE SPECIAL MEETING, YOU MAY
REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE 1>
SUBSTANCE ABUSE TECHNOLOGIES, INC.
4517 N.W. 31st Avenue
Ft. Lauderdale, Florida 33309
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
May 5, 1997
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Substance Abuse
Technologies, Inc. (the "Company") of proxies to be voted at the
Special Meeting of Stockholders (the "Special Meeting") to be held
on Monday, May 5, 1997, or at any adjournment thereof. The
purpose for which the Special Meeting is to be held is set forth
in the preceding Notice of Special Meeting. This Proxy Statement
and the enclosed form of proxy are first being mailed on or about
April 7, 1997 to holders of record of the Company's Common Stock,
par value $.01 per share (the "Common Stock"), as of the close of
business on March 26, 1997 (the "Record Date"), which has been
fixed as the record date for the determination of the stockholders
entitled to notice of, and to vote at, the Special Meeting.
VOTING SECURITIES
On the Record Date, [36,030,591] shares of the Common Stock,
which is the only class entitled to vote at the Special Meeting,
were issued and outstanding. Each stockholder of record is
entitled to cast, in person or by proxy, one vote for each share
of the Common Stock held by such stockholder as of the close of
business on the Record Date. The affirmative vote of a majority
of the outstanding shares of the Common Stock shall be necessary
to approve an increase in the number of authorized shares of the
Common Stock.
Proxies will be voted as indicated in this Proxy Statement
and the enclosed proxy. Shares represented by properly executed
proxies, if received in time, will be voted in accordance with any
specifications made therein. A proxy may be revoked by delivering
a written notice of revocation to the Company (Attention: Robert
Muccini, Treasurer) at its principal executive office or in person
at the Special Meeting, or by a subsequently dated proxy, at any
time prior to the voting thereof. The principal executive office
of the Company is located at the above address.
Rule 577 of the American Stock Exchange, Inc. permits a
member firm to vote for the proposal to approve the increase in
the number of authorized shares of the Company's Common Stock if
the member firm holds the shares of the Common Stock for a
beneficial owner and receives no instructions to the contrary
within ten days after receipt by the beneficial owner of a copy of
this Proxy Statement. The Company, accordingly, urges each
beneficial owner to instruct the member firm which holds of record
the stockholder's shares of the Common Stock to vote in favor of
the proposal submitted to the stockholders for a vote.
A stockholder shall have no right to receive payment for his,
her or its shares as a result of stockholder approval of the
proposal in the Notice of Special Meeting.
<PAGE 2>
APPROVAL OF THE INCREASE IN THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors of the Company has approved and
recommends an Amendment to Article IV of the Certificate of
Incorporation of the Company to increase the number of authorized
shares of the Common Stock from 50,000,000 to 65,000,000. There
will be no change effected in the par value of the Common Stock,
which will remain as par value $.01 per share. The failure to
adopt this proposal will put the Company in the position of
potentially being unable to fulfill its obligations to issue
shares upon the exercise of outstanding stock options and
warrants.
As of the Record Date, there were [36,030,591] shares of the
Common Stock outstanding, and there were reserved, as of such
date, an aggregate of [17,788,712] shares of the Common Stock,
consisting of (1) 10,091,746 shares reserved for the exercise of
warrants; (2) 2,500,000 shares reserved upon the conversion of
convertible notes; (3) 1,532,679 shares reserved for issuance with
respect to future acquisitions; and (4) an aggregate of 3,664,557
shares reserved for use in proposed transactions to take private
its subsidiaries Good Ideas Enterprises, Inc. ("Good Ideas") and
U.S. Drug Testing, Inc. ("U.S. Drug") as described in the
succeeding paragraph. Due to the antidilution provisions in
certain of the warrants and in the convertible notes, the number
of shares reserved for issuance may in the future be further
adjusted.
The Company is currently seeking to acquire the minority
stock interests in (1) U.S. Drug, which is 67.0% owned by the
Company, by an offer of (a) an aggregate of 2,789,478 shares of
the Common Stock to the minority stockholders of U.S. Drug in
exchange for their shares of the common stock of U.S. Drug at a
ratio of 1.62 of a share of the Common Stock for each share of
common stock of U.S. Drug and (b) an aggregate of 243,000 shares
issuable upon the exercise of Common Stock purchase warrants in
exchange for U.S. Drug's outstanding common stock purchase
warrants; and (2) Good Ideas, which is 60.8% owned by the Company,
by an offer of (a) an aggregate of 557,524 shares of the Common
Stock to the minority stockholders of Good Ideas in exchange for
their shares of the common stock of Good Ideas at a ratio of .36
of a share of the Common Stock for each share of common stock of
Good Ideas and (b) an aggregate of 74,285 shares issuable upon the
exercise of Common Stock purchase warrants in exchange for Good
Idea's outstanding common stock purchase warrants. Although there
can be no assurance that these acquisitions will be consummated,
if they are, the Company will be required to issue an aggregate of
3,347,002 shares and reserve an aggregate of 317,285 shares for
the exercise of the warrants.
An aggregate of [53,819,303] shares of the Common Stock
would be outstanding if all of the shares reserved as of the
Record Date were issued. Accordingly, the authorization of shares
would be exceeded by [3,819,303] shares. In addition, because of
the Company's financing requirements, primarily to finance the
development of drug testing products, additional shares will
likely be issued, whether made subject to additional Common Stock
purchase warrants and/or stock options or issued directly.
<PAGE 3>
The Board has in the past granted stock options and issued
Common Stock purchase warrants to employees as additional
compensation and deems it advisable to be in a position to grant
stock options and warrants in the future as an incentive for
attracting and retaining qualified and competent employees by
providing them with the ability to acquire a proprietary interest
in the Company through ownership of the Common Stock.. The Board
deems it advisable to have shares of the Common Stock available
for such purposes in the future. The Company currently has no such
stock option plan.
Although the Board has no specific company, other than U.S.
Drug and Good Ideas, as to which its stock or assets would be
acquired under consideration, the Board believes that, should an
appropriate acquisition opportunity present itself in the future,
the Company should have the flexibility to use shares of the
Common Stock instead of, or in addition to, cash to effect such an
acquisition.
Except as described in the preceding four paragraphs, there
are no other proposals for use of the Common Stock which have been
approved or which are currently under consideration by the Board
of Directors.
Effect on Stockholders
Holders of the Common Stock have no preemptive rights and
are entitled to dividends when and if declared by the Board of
Directors (see the second succeeding paragraph). Each holder of
the Common Stock has one vote per share on all matters submitted
to stockholders for a vote. The proposed Amendment to the
Certificate of Incorporation would create no material differences
between shares of the Common Stock prior to the Amendment and the
shares of the Common Stock after the Amendment.
Authorization of the additional shares of the Common Stock
will have no effect on the rights of the existing holders of the
Common Stock and their rights will continue as described in the
preceding paragraph, unless and until such shares are issued, in
which event the only effect will be a dilution of the voting
rights of such holders as a result of the increased number of
outstanding shares of the Common Stock.
Although the issuance of additional shares of the Common
Stock would theoretically increase the amount necessary to pay
dividends, because of the Company's cash requirements and
continuing losses, management does not anticipate that cash
dividends will be paid on the Common Stock in the foreseeable
future.
The fact that the Company may issue so many additional
shares may, in the opinion of management, have a depressive effect
on the market price for the Common Stock.
The number of the additional shares which may be issued and
the extent of dilution of voting rights cannot be predicted
because the Board does not know for what number of shares, if
<PAGE 4>
any, whether part or all of the outstanding stock warrants will be
exercised. In addition, the Board does not know the number of
shares, whether of the Common Stock or securities convertible or
exercisable into shares of the Common Stock, that may be issued in
future private placements or public offerings, or which may be
used to effectuate future acquisitions.
For the reasons described above, the Board of Directors
recommends that the stockholders vote FOR an increase in the
authorized number of shares of the Common Stock. Approval of the
increase in the authorized number of shares of the Common Stock
requires the affirmative vote of a majority of all of the
outstanding shares entitled to vote at the Special Meeting and
proxies not marked to the contrary will be so voted at the Special
Meeting.
INTEREST OF MANAGEMENT
Because, Robert M. Stutman and Linda H. Masterson, each a
director and an executive officer of the Company, Alan I. Goldman,
John C. Lawn, Peter M. Mark, Michael S. McCord and Lee S. Rosen,
each a director of the Company, and two other executive officers
have outstanding warrants to purchase shares of the Common Stock
and each director and executive officer may be granted warrants in
the future, they have an interest in having the proposed Amendment
to increase the number of authorized shares of the Common Stock
approved by the stockholders. There is no other proposal in the
Notice of Special Meeting.
Of the outstanding warrants, the executive officers and
directors of the Company hold Common Stock purchase warrants as
follows:
(1) Robert M. Stutman, Chairman of the Board, Chief
Executive Officer and a director of the Company, holds warrants to
purchase (a) 3,125 shares of the Common Stock issuable upon the
exercise at $2.00 per share of a Common Stock purchase warrant
expiring December 13, 1998 issued to him for his consulting
services while still an employee of Robert Stutman & Associates,
Inc. ("RSA"), the operations of RSA now being conducted by the
Robert Stutman & Associates Consulting Division of the Company;
(b) 105,500 shares of the Common Stock issuable upon the exercise
at $2.00 per share of a Common Stock purchase warrant expiring
March 31, 1999 issued to him when the Common Stock purchase
warrant to purchase 200,000 shares issued to RSA was divided among
the RSA shareholders; and (c) 474,750 shares of the Common Stock
issuable upon the exercise at $2.125 per share of a Common Stock
purchase warrant expiring May 20, 1999 issued to him in exchange
for his ownership interest in RSA when the Company acquired RSA on
May 21, 1996;
(2) Linda H. Masterson, President and a director of the
Company, holds warrants to purchase (a) 10,000 shares of the
Common Stock issuable upon the exercise at $1.9375 per share of a
Common Stock purchase warrant expiring November 15, 1998 issued to
her as a director of the Company and (b) 200,000 shares of the
Common Stock issuable upon the exercise at $2.125 per share and
400,000 shares of the Common Stock issuable upon the exercise at
$3.125 per share of a
<PAGE 5>
Common Stock purchase warrant expiring May 12, 1999 issued pursuant to
Ms. Masterson's terms of employment;
(3) Alan I. Goldman, John C. Lawn and Peter M. Mark, each a
director of the Company, each hold warrants to purchase (a) 10,000
shares of the Common Stock issuable upon the exercise at $1.9375
per share of a Common Stock purchase warrant expiring November 15,
1998 and (b) 10,000 shares of the Common Stock issuable upon the
exercise at $1.825 per share of a warrant expiring November 15,
1999, both issued to the holder as a director of the Company who
is not employed by the Company or any subsidiary thereof;
(4) Michael S. McCord, a director of the Company, holds
warrants to purchase (a) 10,000 shares of the Common Stock
issuable upon the exercise at $1.9375 per share of a Common Stock
purchase warrant expiring November 15, 1998 issued to Mr. McCord
as a consultant to the Board of Directors of the Company and (b)
10,000 shares of the Company Common Stock issuable upon the
exercise at $1.825 per share of a warrant expiring November 15,
1999 issued to him as a director of the Company who is not
employed by the Company or any subsidiary thereof;
(5) Lee S. Rosen, a director of the Company, holds warrants
to purchase (a) 10,000 shares of the Common Stock issuable upon
the exercise at $1.9375 per share of a Common Stock purchase
warrant expiring November 15, 1998 issued to Mr. Rosen as a
director of the Company who is not employed by the Company or any
subsidiary thereof; (b) 10,000 shares of the Common Stock issuable
upon the exercise at $1.825 per share of a warrant expiring
November 15, 1999 issued to Mr. Rosen as a director of the Company
who is not employed by the Company or any subsidiary thereof; (c)
200,000 shares of the Common Stock issuable upon the exercise at
$1.9375 per share of a Common Stock purchase warrant expiring
November 15, 1998; (d) 150,000 shares of the Common Stock issuable
upon the exercise at $3.00 per share of a Common Stock purchase
warrant expiring November 15, 2000; (e) 150,000 shares of the
Common Stock issuable upon the exercise at $2.00 per share of a
Common Stock purchase warrant expiring November 15, 2000; (f)
300,000 shares of the Common Stock issuable upon the exercise at
$2.125 per share of a Common Stock purchase warrant expiring April
17, 1999; and (g) 200,000 shares of the Common Stock issuable upon
the exercise at $2.00 per share of a warrant expiring December 2,
1999; the Common Stock purchase warrants described in (c), (d) and
(e) were issued to Mr. Rosen as consideration for his services,
not as a director of the Company, including those related to the
private placement consummated in February, 1996, and 50,000 of the
shares subject to each of the warrants described in (d) and (e)
may be forfeited if none of the Common Stock purchase warrants
issued to the purchasers in such private placement are exercised
and may be reduced in the number of shares which may be exercised
pro rata to the exercise of the private placement warrants;
(6) Robert Muccini, the Vice President, Finance, the
Treasurer, the Chief Financial Officer and the Chief Accounting
Officer of the Company, holds a Common Stock purchase warrant
expiring December 15, 2003 to purchase 40,000 shares of the Common
Stock at $2.125 per share; and
<PAGE 6>
(7) Brian Stutman, the Vice President, Sales and Marketing
of the Company, holds warrants to purchase (a) 159,876 shares of
the Common Stock issuable upon the exercise at $2.00 per share of
a Common Stock purchase warrant expiring March 31, 1999 issued to
him when the Common Stock purchase warrant to purchase 200,000
issued to RSA was divided among the RSA shareholders and (b)
317,250 shares of the Common Stock issuable upon the exercise at
$2.125 per share of a Common Stock purchase warrant expiring May
20, 1999 issued to him in exchange for his ownership interest in
RSA.
FINANCIAL STATEMENTS
The following financial statements, management's discussion
and analysis and market information, all of which appear in the
Company's Annual Report on Form 10-K, for the year ended March 31,
1996 ("fiscal 1996"), a copy of which accompanies this Proxy
Statement, are incorporated herein by this reference:
Page in
Item Form 10-K
---- ---------
1. Report of Independent Auditors........................... F-1
2. Report of Independent Certified Public Accountants....... F-2
3. Consolidated Balance Sheets at March 31, 1997 and 1995... F-3
4. Consolidated Statements of Operations for the
Years Ended March 31, 1996, 1995 and 1994................ F-4
5. Consolidated Statements of Stockholders' Equity for
the Years Ended March 31, 1996, 1995 and 1994............ F-5
6. Consolidated Statements of Cash Flow for the Years
Ended Years Ended March 31, 1996, 1995 and 1996.......... F-8
7. Notes to Consolidated Financial Statements............... F-10
8. Market Information....................................... 18
9. Management's Discussion and Analysis or Plan of
Operations............................................... 21
<PAGE 7>
The following financial statements, all of which appear in
the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1996, a copy of which report accompanies this Proxy
Statement, are incorporated herein by this reference:
Page in
Form 10-Q
---------
Item
----
1. Consolidated Balance Sheets at December 31, 1996
(unaudited) and March 31, 1996.......................... 1
2. Consolidated Statements of Operations (unaudited) for
the Quarter and the Nine Months Ended
December 31, 1996 and 1995.............................. 3
3. Consolidated Statements of Cash Flows for the
Nine Months Ended December 31, 1996 and 1995............ 4
4. Notes to Consolidated Financial Statements (unaudited)
December 31, 1996....................................... 6
A representative of Ernst & Young LLP, the Company's
independent public accountants for the fiscal years ending March
31, 1996 and 1997 will not be present at the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
HOLDERS AND MANAGEMENT
The following table sets forth certain information, as of the
Record Date, with respect to (1) any person who owned beneficially
more than 5% of the Common Stock; (2) each director of the
Company; (3) the Chief Executive Officer of the Company; (4) each
executive officer of the Company (including the then Chief
Executive Officer) who was paid more than $100,000 in fiscal 1996,
whether or not he or she was still an executive officer on the
Record Date; and (5) all directors and executive officers as a
group. Each beneficial owner has advised the Company that he or
she has sole voting and investment power as to the shares of the
Common Stock reported in the table, except that the Common Stock
purchase warrants and stock options described in the notes below
do not have any voting power until exercised and may not be sold
or otherwise transferred except in compliance with the Securities
Act.
<PAGE 8>
Number of Shares
Name and Address Beneficially Owned Percentage
- ---------------- ------------------ ----------
Steven A. Cohen(2) 1,748,100(3) 4.9%
777 Long Ridge Road
Stamford, CT 06902
S.A.C. Capital Associates, LLC(2) 508,100(4) 1.4%
777 Long Ridge Road
Stamford, CT 06902
Robert M. Stutman (5) 930,500(6) 2.5%
4517 N.W. 31st Avenue
Ft. Lauderdale, FL 33309
Linda H. Masterson(7) 210,000(8) nil
10410 Trademark Street
Rancho Cucamonga, CA 91730
Gary S. Wolff (9) 25,000(10) nil
190 Sylvan Avenue
Englewood Cliffs, NJ 07632
James C. Witham(11) 878,500 2.4%
27 La Costa Drive
Rancho Mirage, CA 92270
Karen B. Laustsen (12) 104,500 nil
3000 C La Paz Lane
Diamond Bar, CA 91765
Alan I. Goldman (13) 20,000(14) nil
497 Ridgewood Avenue
Glen Ridge, NJ 07028
John C. Lawn (13) 20,000(14) nil
c/o The Century Council
550 South Hope Street
Suite 1950
Los Angeles, CA 90071-2604
<PAGE 9>
Number of Shares
Name and Address Beneficially Owned Percentage
- ---------------- ------------------ ----------
Peter M. Mark (13) 587,600(14) 1.6%
5531 Sugar Hill
Houston, TX 77056
Michael S. McCord (13) 234,441(15) nil
Suite 701
2001 Kirby Drive
Houston, TX 77019
Lee S. Rosen (13) 1,478,648(16) 4.0%
17332 Saint James Court
Boca Raton, FL 33496
All directors and 3,884,565(6)(8) 10.2%
executive officers as a group
(eight persons) (14)(15)(16)
___________________________
1. The percentages computed in this column of the table are
based upon [36,030,591] shares of the Common Stock
outstanding on the Record Date and effect being given, where
appropriate, pursuant to Rule 13d-3(d)(1) under the Exchange
Act, to shares issuable upon the exercise of Common Stock
purchase warrants and stock options which are currently
exercisable or exercisable within 60 days of the Record
Date.
2. Steven A. Cohen and S.A.C. Capital Associates, LLC filed a
Schedule 13D, as amended, (the "Cohen Schedule 13D"),
because their joint beneficial ownership may constitute
ownership by a "group" as such term is defined in Rule 13d-
5(b) under the Exchange Act. Based on the holders' advice to
the Company and the subsequent grants by the Company, the
group beneficially owned an aggregate of 2,354,200 shares or
6.6% of the outstanding shares on the Record Date.
3. The shares reported in the table as being beneficially owned
reflect (a) 1,743,100 shares of the Common Stock and (b)
5,000 shares of the Common Stock issuable at $1.8125 per
share upon the exercise of a warrant expiring November 15,
1999. The shares reported in the table do not reflect (a)
2,500,000 shares of the Common Stock issuable upon the
conversion of a convertible note at $2.00 per share and (b)
1,250,000 shares of the Common Stock issuable at $2.00 per
share upon the exercise of a warrant expiring June 30, 2000,
because neither the convertible note is convertible, nor the
warrant expiring June
<PAGE 10>
30, 2000, exercisable, on the Record
Date or within 60 days thereafter.
4. The shares reported in the table as being beneficially owned
reflect (a) 503,100 shares of the Common Stock and (b) 5,000
shares of the Common Stock issuable at $1.8125 per share
upon the exercise of a warrant expiring November 15, 1999.
The Cohen Schedule 13D reported that S.A.C. Capital
Associates, LLC, an Anguillan limited liability company,
acquired the foregoing securities, but, because S.A.C.
Capital Advisors, LLC, a Delaware limited liability company,
has voting and dispositive power over the securities, the
latter was deemed to be the beneficial owner thereof. The
shares reported in the table do not reflect (a) 2,500,000
shares of the Common Stock issuable upon the conversion of a
convertible note at $2.00 per share and (b) 1,250,000 shares
of the Common Stock issuable at $2.00 per share upon the
exercise of a warrant expiring June 30, 2000 because neither
the convertible note is convertible, nor the warrant
expiring June 30, 2000 exercisable, on the Record Date or
within 60 days thereafter.
5. Mr. Stutman was elected as Chairman of the Board and a
director of the Company and designated as its Chief
Executive Officer on April 18, 1996.
6. The shares reported in the table include (a) 3,125 shares of
the Common Stock issuable upon the exercise at $2.00 per
share of a Common Stock purchase warrant expiring December
13, 1998 issued to him for his consulting services while
still an employee of Robert Stutman & Associates, Inc.
("RSA"); (b) 105,500 shares of the Common Stock issuable
upon the exercise at $2.00 per share of a Common Stock
purchase warrant expiring March 31, 1999 issued to him when
the Common Stock purchase warrant to purchase 200,000 shares
issued to RSA was divided among the RSA shareholders; and
(c) 474,750 shares of the Common Stock issuable upon the
exercise at $2.125 per share of a Common Stock purchase
warrant expiring May 20, 1999 issued to him in exchange for
his ownership interest in RSA.
7. Ms. Masterson, a director of the Company, became its
President and Chief Operating Officer effective May 13,
1996. Effective November 19, 1996, Ms. Masterson
relinquished her duties as Chief Operating Officer in order
to concentrate on certain operations of the Company.
8. The shares reported in the table reflect (a) 10,000 shares
of the Common Stock issuable upon the exercise at $1.9375
per share of a Common Stock purchase warrant expiring
November 15, 1998 issued to her as a director of the Company
on the same basis as described in Note 14 to the table and
(b) 20,000 shares of the Common Stock issuable upon the
exercise at $2.125 per share of a Common Stock purchase
warrant expiring May 12, 1999 issued pursuant to Ms.
Masterson's terms of employment, which 20,000 shares
<PAGE 11>
are the only shares as to which the warrant to purchase an aggregate
of 400,000 shares is currently exercisable or exercisable
within 60 days of the Record Date.
9. Mr. Wolff was the Treasurer, Chief Financial Officer and
Chief Accounting Officer of the Company until he resigned on
July 3, 1996.
10. The shares reported in the table reflect (a) 15,000 shares
of the Common Stock issuable upon the exercise at $1.06 per
share of a Common Stock purchase warrant expiring September
30, 1996 and (b) 10,000 shares of the Common Stock issuable
upon the exercise at $4.00 per share of a Common Stock
purchase warrant expiring May 17, 1997.
11. Mr. Witham was the Chairman, the President, the Chief
Executive Officer and a director of the Company until April
18, 1996.
12. Ms. Laustsen was an Executive Vice President and a director
of the Company until April 18, 1996.
13. A director of the Company.
14. The shares reported in this table include or reflect (a)
10,000 shares of the Common Stock issuable upon the exercise
at $1.9375 per share of a Common Stock purchase warrant
expiring November 15, 1998 and (b) 10,000 shares of the
Common Stock issuable upon the exercise at $1.825 per share
of a warrant expiring November 15, 1999, both issued to the
holder as a director of the Company who is not employed by
the Company or any subsidiary thereof.
15. The shares reported in the table include (a) 10,000 shares
of the Common Stock issuable upon the exercise at $1.9375
per share of a Common Stock purchase warrant expiring
November 15, 1998 issued to Mr. McCord as a consultant to
the Board of Directors of the Company and (b) 10,000 shares
of the Common Stock issuable upon the exercise at $1.825 per
share of a warrant expiring November 15, 1999 issued to him
as a director of the Company on the same basis as those
described in Note 14 to this table.
16. The shares reported in the table include (a) 10,000 shares
of the Common Stock issuable upon the exercise at $1.9375
per share of a Common Stock purchase warrant expiring
November 15, 1998 issued to Mr. Rosen on the same basis as
those described in Note 14 to this table; (b) 10,000 shares
of the Common Stock issuable upon the exercise at $1.825 per
share of a warrant expiring November 15, 1999 issued to Mr.
Rosen on the same basis as those described in Note 14 to
this table; (c) 200,000 shares of the Common Stock issuable
upon the exercise at $1.9375 per share of a Common Stock
purchase warrant expiring November 15, 1998; (d) 150,000
shares of the Common Stock issuable upon the
<PAGE 12>
exercise at $3.00 per share of a Common Stock purchase warrant
expiring November 15, 2000; (e) 150,000 shares of the Common
Stock issuable upon the exercise at $2.00 per share of a Common
Stock purchase warrant expiring November 15, 2000; (f)
300,000 shares of the Common Stock issuable upon the
exercise at $2.125 per share of a Common Stock purchase
warrant expiring April 17, 1999; and (g) 200,000 shares of
the Common Stock issuable upon the exercise at $2.00 per
share of a warrant expiring December 2, 1999. The Common
Stock purchase warrants described in (c), (d) and (e) were
issued to Mr. Rosen as consideration for his services,
including those related to the private placement consummated
in February 1996. 50,000 of the shares subject to each of
the warrants described in (d) and (e) may be forfeited if
none of the Common Stock purchase warrants issued to the
purchasers in such private placement are exercised and may
be reduced in the number of shares which may be exercised
pro rata to the exercise of the private placement warrants.
17. The shares reported in the table include, in addition to
those reported for a director (who may also be an executive
officer) elsewhere in the table (see the text relating to
Notes 6, 8, 14, 15 and 16 to the table), (a) 176,250 shares
of the Common Stock issued to an executive officer of SAT in
exchange for his ownership interest in RSA; (b) 59,876
shares of the Common Stock issuable upon the exercise at
$2.00 per share by such executive officer of a Common Stock
purchase warrant expiring March 31, 1999 issued to him when
the Common Stock purchase warrant to purchase 200,000 shares
issued to RSA was divided among the RSA shareholders; and
(c) 317,250 shares of the Common Stock issuable upon the
exercise at $2.125 per share by such executive officer of a
Common Stock purchase warrant expiring May 20, 1999 issued
to him in exchange for his ownership interest in RSA. The
shares reported in the table exclude 40,000 shares of the
Common Stock issuable upon the exercise at $2.125 per share
by another executive officer of a warrant expiring December
15, 2003 because the warrant is not currently exercisable or
exercisable within 60 days of the Record Date.
OTHER MATTERS COMING BEFORE THE SPECIAL MEETING
As of the date of this Proxy Statement, the Board of
Directors does not know of any matters to be presented to the
Special Meeting other than the proposal set forth in the attached
Notice of Special Meeting. If any other matters properly come
before the Special Meeting, it is intended that the holders of the
management proxies will vote thereon in their discretion.
<PAGE 13>
MISCELLANEOUS
The solicitation of proxies on the enclosed form of proxy is
made by and on behalf of the Board of Directors of the Company and
the cost of this solicitation is being paid by the Company. In
addition to the use of the mails, proxies may be solicited
personally, or by telephone or telegraph, by the officers or
directors of the Company.
Stockholder proposals for inclusion in the Company's Proxy
Statement for the Special Meeting must be received no later than a
reasonable time before the solicitation is made.
By Order of the Board of Directors
/s/Robert W. Berend
-----------------------------------
Robert W. Berend
Secretary
April 7, 1997
<PAGE I>
- ---------------------------- ---------------------------------
- ---------------------------- ---------------------------------
Substance Abuse Technologies, Inc.
Table of Contents
Page
Notice of the Special Meeting Notice of Special Meeting
of Stockholders................. NA of Stockholders on May 5, 1997
Proxy Statement:
Voting Securities.................. 1
Proposal One: Approval of the Income
in the Number of Authorized
Shares of Common Stock......... 2
Effect on Stockholders......... 3
Interest of Management............ 4
Financial Statements.............. 6
Security Ownership of Certain
Beneficial Holders and
Management....................... 7
Other Matters Coming Before
the Special Meeting.............. 12
Miscellaneous..................... 13
- ------------------------------- ------------------------------
- ------------------------------- ------------------------------
<PAGE II>
PROXY SUBSTANCE ABUSE TECHNOLOGIES, INC.
4517 N.W. 31st Avenue, Ft. Lauderdale, Florida 33309
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS-MAY 5, 1997
The undersigned hereby appoints Robert Stutman and Linda H.
Masterson, or either of them, as Proxy or Proxies of the
undersigned with full power of substitution or revocation to
attend and to represent the undersigned at the Special Meeting of
Stockholders of Substance Abuse Technologies, Inc. (the "Company")
to be held on May 5, 1997, and at any adjournments thereof, and to
vote thereat the number of shares of stock of the Company the
undersigned would be entitled to vote if personally present, in
accordance with the directions indicated below.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE.
Approval of the increase in the number of authorized shares of the Company.
[] FOR the increase in the number of shares [] AGAINST the increase in
the number of shares [] ABSTAIN
If no specification is made, this proxy will be voted FOR
the Proposal listed above.
Dated:________________________
Name:________________________
Please sign exactly
as name appears
above. For joint
accounts, each joint
owner must sign.
Please give full
title if signing in
a representative
capacity.
Please check if you
plan to attend this
Special Meeting []
