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:
Preliminary Proxy Statement Confidential, for Use of the
Commission
Only (as permitted by Rule 14a-
6(e)(2))
x Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Lancer Orthodontics, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
(Payment of Filing Fee (Check the appropriate box):
x No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and
state how it was determined):
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Fee paid previously with preliminary materials
Check box if any part of the fee is offset as provided by Exchange
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the filing for which the offsetting fee was paid previously.
Identify the previous filing be
registration statement number or the Form or Schedule and date of
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LANCER ORTHODONTICS, INC.
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 12, 2001
AND PROXY STATEMENT
The 2001 Annual Meeting of Shareholders of Lancer Orthodontics, Inc.
(the "Company") will be held at 10:00 a.m. on Monday, November 12, 2001, at
Biomerica, Inc.'s Corporate Offices, 1533 Monrovia Avenue, Newport Beach,
California 92663.
The purposes of the meeting are:
1. To elect a Board of Directors of the Company for the ensuing year.
2. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on October 10,
2001, are entitled to notice of and to vote at the Annual Meeting of
Shareholders and any adjournment thereof.
Your attention is directed to the accompanying Proxy Statement.
Stockholders who do not expect to attend the meeting in person are requested
to date, sign, and mail the enclosed proxy as promptly as possible in the
enclosed envelope.
By Order of the Board of Directors
/s/ Zackary S. Irani
Zackary S. Irani
Chairman of the Board and
Chief Executive Officer
San Marcos, California
September 28, 2001
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LANCER ORTHODONTICS, INC.
253 PAWNEE STREET
SAN MARCOS, CALIFORNIA 92069
2001 ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 12, 2001
PROXY STATEMENT
INTRODUCTION
The Annual Meeting of Shareholders of Lancer Orthodontics, Inc., a
California Corporation, (the "Company") will be held at 10:00 a.m. on November
12, 2001, at Biomerica, Inc.'s Corporate Offices, 1533 Monrovia Avenue,
Newport Beach, California 92663 for the purposes set forth on the accompanying
Notice of 2001 Annual Meeting of Shareholders. This Proxy Statement and the
enclosed Proxy are being mailed on or about October 17, 2001, to shareholders
of the Company in connection with the solicitation, by the Company's Board of
Directors, of proxies to be used at the 2001 Annual Meeting of Shareholders
and any adjournment thereof (the "Annual Meeting").
The presence at the Annual Meeting of Stockholders, in person or by
Proxy, of the holders of a majority of the outstanding shares of Common Stock
is necessary to constitute a quorum. The holder of each share of Common Stock
held of record on the record date is entitled to one vote on each matter to be
considered at the Annual Meeting.
If a Proxy in the accompanying form is duly executed and returned the
shares represented thereby will be voted as directed. If no direction is
given, the shares represented by the Proxy will be voted for the election of
the nominees for Director named herein. However, giving of the enclosed proxy
does not preclude the right to vote in person should the stockholder giving
the proxy so desire. Any shareholder may revoke his or her Proxy at any time
prior to its exercise by notifying the Secretary of the Company in writing of
such revocation, by submitting a Proxy bearing a later date to the Secretary
of the Company, or by voting in person at the meeting. Abstentions and broker
non-votes are not counted as votes cast on any matter to which they relate.
The cost of this solicitation of proxies will be borne by the Company.
In addition to solicitation by mail, officers, directors, and regular
employees of the Company may solicit proxies personally or by telephone or
telegraph. The Company will, upon request, reimburse banks, brokerage firms,
and other custodians and nominees for their reasonable expenses in sending
proxy materials to beneficial shareholders.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record as of the close of business on October 10,
2001, are entitled to vote at the meeting or any adjournment thereof. As of
September 25, 2001, the Company had outstanding 2,098,620 shares of Common
Stock, without par value. Holders of record of the Stock are entitled to one
vote for each share held. Shareholders are entitled to cumulative voting,
pursuant to which a shareholder may multiply the number of shares owned by the
number of Directors to be elected and cast a total number of votes equal to
the resulting product for any one candidate, or distribute the total number of
votes in any
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proportion among as many candidates as the shareholder desires. However, a
shareholder may not cumulate his or her votes for a candidate unless such
candidate's name has been placed in nomination prior to the voting and unless
the shareholder has given notice at the meeting, prior to voting, of his or
her intention to cumulate his or her votes. If any shareholder gives such
notice, all shareholders may then cumulate their votes.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of the date of this Proxy
Statement, by (i) each person known to the Company to own beneficially more
than 5% of the outstanding shares of the Common Stock, (ii) each director,
including the nominees for director, and each executive officer of the
Company, and (iii) all executive officers and directors as a group. Unless
otherwise indicated, each person listed has sole voting and investment power
over the shares beneficially owned by him or her.
Name and Address Amount and Nature of Percent of
of Beneficial Owner (1)(2) Beneficial Ownership (3) Class (2)
Biomerica 645,967 (4) 30.8%
Zackary Irani 85,016 (5) 3.9%
Douglas D. Miller 122,686 (6) 5.5%
Janet Moore 310,163 (7) 14.7%
Dr. Robert Orlando 32,042 (8) 1.5%
Dr. Francis Cano 10,000 (9) .5%
All executive officers and
directors as a group (5 persons) 559,907 (10) 24.3%
(1) The address for Mr. Irani, Ms. Moore, Dr. Orlando, and Dr. Cano is 1533
Monrovia Avenue, Newport Beach CA 92663. Mr. Miller's address is 253
Pawnee Street, San Marcos, CA 92069.
(2) Beneficial ownership is determined in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934. Any shares of Common Stock that each
named person and group has the right to acquire within 60 days pursuant
to options, warrants, conversion privileges or other rights, are deemed
outstanding for purposes of computing shares beneficially owned by and
the percentage ownership of each such person and group. However, such
shares are not deemed outstanding for purposes of computing the shares
beneficially owned by or percentage ownership of any other person or
group. Percentage ownership for each named beneficial owner, and the
beneficial ownership of the directors and executive officers as a group,
is based on 2,098,620 issued and outstanding shares of Common Stock.
(3) Except as otherwise indicated and subject to applicable community
property and similar statutes, the persons listed as beneficial owners
of the shares have sole voting and depositive power with respect to such
shares.
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(4) Biomerica, Inc.'s address is 1533 Monrovia Avenue, Newport Beach CA
92663.
(5) Includes 53,786 shares of Common Stock underlying options exercisable by
Mr. Irani at or within 60 days after the date of the proxy.
(6) Includes 113,000 shares of Common Stock underlying options exercisable
by Mr. Miller at or within 60 days after the date of the proxy.
(7) Includes 2,771 shares in the name of Ms. Moore's minor sons and 13,500
shares of Common Stock underlying options exercisable by Ms. Moore at or
within 60 days after the date of the proxy.
(8) Includes 13,500 shares of Common Stock underlying options exercisable by
Dr. Orlando at or within 60 days after the date of the proxy.
(9) Includes 10,000 shares of Common Stock underlying options exercisable by
Dr. Cano at or within 60 days after the date of the proxy.
(10) Includes 203,786 shares underlying options exercisable at or within 60
days after the date of the proxy.
Series D Preferred Stock
The Company has authorized shares of Series D Preferred Stock. Each
share is entitled to a $.04 non-cumulative dividend and is convertible at the
option of the holder into common stock at the rate of seven shares of
preferred stock for one share of common stock. The Company, at its option,
can redeem outstanding shares of the preferred stock for cash at $.50 per
share after December 31, 1994. In May 2000, all 370,483 issued and
outstanding shares were converted into 52,926 shares of common stock. As of
the date of this proxy statement, there were no shares issued and outstanding.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Directors to be elected at the meeting will hold office until the
next annual meeting or until their successors shall be elected and qualified.
The persons named in the enclosed proxy card will vote the shares represented
by the proxies given to them for the election of the five (5) nominees listed
in the table below, unless authority to do so is withheld. The shares
represented by proxies will not be voted for a greater number of persons than
the number of nominees listed below; however, the proxy holders have the right
(subject to the same conditions as apply to cumulation of votes by a
shareholder) to cumulate the votes represented by proxies and to distribute
the votes among the listed nominees in such manner as they see fit to elect
the maximum number of such nominees. If any nominees should not be available
for election as Directors, which the Board of Directors and management do not
presently anticipate, the persons named in the enclosed proxy will vote for
the election of such other person as the Board of Directors and management may
recommend.
The Board of Directors has nominated the following five persons to serve
as Directors until the next annual meeting of shareholders or until their
successors have been duly elected and qualified.
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Name Age Position
Zackary Irani 35 Chairman of the Board, CEO, and Director
Douglas D. Miller 62 President, Chief Operating Officer, and Director
Janet Moore 50 Secretary and Director
Dr. Robert Orlando 63 Director
Dr. Francis Cano 57 Director
The following is a summary of the Directors' experiences with the
Company and their other business experience:
Mr. Z. Irani has been a Director of the Company since October 29, 1992.
Mr. Irani was elected Chairman of the Board effective April 30, 1997, and was
elected Chief Executive Officer effective October 24, 1997. Mr. Irani has
been the Chief Executive Officer, Chairman, and Treasurer of Biomerica since
August 1997. Prior to that time, Mr. Irani served as Vice President of
Business Development of Biomerica since July 1994 and Business Development
Manager of Biomerica since 1988. Mr. Irani also serves as a Director of
Biomerica and a Director of Allergy Immuno Technologies, Inc., a publicly held
corporation controlled by Biomerica.
Mr. Miller has been a Director of the Company since January 13, 1992.
Mr. Miller was elected President of the Company effective January 13, 1992.
Prior to joining the Company, Mr. Miller was employed for nine years at "A"
Company as Director, Worldwide Business Development and, prior to that,
Director, Domestic and International Sales. "A" Company is a major
manufacturer of orthodontic products.
Ms. Moore has been a Director of the Company since October 25, 1996, and
was a Director of the Company from October 29, 1992 through November 4, 1994.
Ms. Moore has been an employee of Biomerica since 1976 and currently serves as
the Secretary of Biomerica and as a Director of Biomerica.
Dr. Orlando has been a Director of the Company since July 20, 1988. Dr.
Orlando is a professor of pathology and has served as Chief Pathologist of
Whittier Hospital in Whittier, California, since 1981 and of Beverly Hospital
in Montebello, California, since 1991. Dr. Orlando has also been a professor
at the Southern California College of Optometry in Fullerton, California,
since 1972. Dr. Orlando also serves as a Director of Biomerica and as a
Director of Allergy Immuno Technologies, Inc., a publicly held corporation
controlled by Biomerica.
Dr. Cano has served as a Director of the Company since May 2001. Dr.
Cano currently works as a consultant in the biomedical field. From 1996 to
1997, Dr. Cano served as Senior Vice President - Biotechnology of PDM, an
information technology company. From 1992 to 1996, he served as President and
Chief Operating Officer of Aviron, a public biotechnology company focused on
developing viral vaccines for disease prevention. Dr. Cano was also involved
in developing a vaccine business at a division of American Cynamid
Corporation.
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Meetings of the Board of Directors and its Committees
The Board of Directors met six times during the fiscal year ended May
31, 2001 (the "2001 Fiscal Year"). In 1979, the Board of Directors of the
Company created an Executive Committee, which is vested with all the authority
of the Board of Directors of the Company, except as restricted by the
Company's Bylaws and the California General Corporation Law. The Executive
Committee is presently composed by Messrs. Z. Irani, and Miller. The
Executive Committee did not meet during the 2001 Fiscal Year.
The Audit Committee is presently composed of Ms. Moore and Dr. Orlando.
The Audit Committee met once with the auditors during the 2001 Fiscal Year.
The Executive Compensation Committee is composed of Ms. Moore and Dr.
Orlando. The Executive Compensation Committee did not meet in Fiscal 2001.
Each outside Director is to be paid $500 for each Board or Committee
meeting attended and $200 for each telephonic meeting. In May 2000, 54,725
previously unissued shares of the Company's common stock were issued to
outside directors as payment for accrued fees. Currently no accrued fees are
owed to the Directors.
The Company has no other committees.
EXECUTIVE COMPENSATION
The following table presents, for each of the last three fiscal years,
the annual compensation earned by the Chief Executive Officer. Neither the
Chief Executive Officer nor any other officer of the Company earned in excess
of $100,000 during any of the last three fiscal years.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
Securities
Name and Other Restricted Underlying
Principal Annual Stock Options/ LTIP All
Other
Position (1) Year Salary (2) Bonus Comp Awards SARs Payouts Compensation
Zackary Irani,
Chairman of 2000 $3,000 (3) -- -- -- -- -- --
the Board and
Chief Executive
Officer
(1) Mr. Z. Irani was elected Chairman of the Board effective April 30, 1997,
and was elected Chief Executive Officer effective October 24, 1997.
(2) There were no other forms of compensation earned or paid during the last
three fiscal years.
(3) This sum represents directors fees which have been accrued and partially
paid with shares of common stock.
The Compensation Committee of the Board of Directors reviews and makes
recommendations to the Board regarding all forms of compensation and benefits
provided the Company's officers. In addition, the Compensation Committee
establishes and reviews general policies relating to the compensation and
benefits of all the Company's employees. The Compensation Committee comprises
Dr. Robert Orlando and Ms. Janet Moore. One (1) compensation committee
meeting was held during the fiscal year ended May 31, 2001.
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Report of the Audit Committee
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process including the systems
of internal controls. In fulfilling its oversight responsibilities, the
Committee reviewed the audited financial statements in the Annual Report with
management including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements.
The Committee reviewed with the independent auditors, who are responsible for
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles, their judgments as to the
quality, not just the acceptability, of the Company's accounting principles
and such other matters as are required to be discussed with the Committee
under generally accepted auditing standards. In addition, the Committee has
discussed with the independent auditors the auditors' independence from
management and the Company including the matters in the written disclosures
required by the Independence Standards Board and considered the compatibility
of non-audit services with the auditors' independence.
The Committee discussed with the Company's independent auditors the overall
scope and plans for their respective audit. The Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
audit committee met once during the fiscal year ended May 31, 2001.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited financial statements be included in the Annual Report on Form 10-KSB
for the year ended May 31, 2001 for filing with the Securities and Exchange
Commission. The Committee and the Board have also recommended the selection
of the Company's independent auditors.
/s/ Janet Moore /s/ Dr. Robert Orlando
Stock Option Grants in Last Fiscal Year
The following table sets forth information concerning stock options
granted in the fiscal year ended May 31, 2001, to the Company's Chief
Executive Officer.
Individual Grants
Number Percent of Total
of Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
Zackary Irani -- -- -- --
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Options Exercises and Fiscal Year End Values
The following table presents information for the named officer in the
Summary Compensation Table with respect to options exercised during Fiscal
2001 and unexercised options held as of the end of the fiscal year.
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised in the Money Options
On Value Options at Fiscal Year End at Fiscal Year End (1)
Name Exercise (#) Realized ($)Exercisable Unexercisable Exercisable Unexercisable
Zackary Irani -0- -0- 53,786 -0- -0- -0-
(1) Based on closing price for the Company's common stock on the last business
day of the fiscal year.
Stock Options
Under the 2000 Stock Incentive Plan (the "Plan"), the Company is
authorized to grant stock options to key employees, officers, and directors of
the Company (or its parent corporation), non-employee members of the Board of
Directors of the Company (or its parent), and consultants who provide valuable
services to the Company. Any options outstanding at date of plan termination
will remain in effect. Under the plan, 450,000 shares have been authorized
for grant or issuance. Stock options granted under the Plan shall be granted
at an option price not less than 85% of the fair market value for options
granted to employees, or less than 100% of the fair market value for options
granted to non-employees. The fair market value of the stock is as of the
date the option is granted. Most options granted under the Plan to date
expire five (5) years from the date of their respective grant and all were
granted at fair market value at the date of grant. As of September 25, 2001,
options to purchase 347,786 shares of Common Stock were outstanding at
exercise prices ranging from $.85 to $1.75 per share with an average exercise
price of $.95. As of September 25, 2001, options to purchase 334,036 shares
of Common Stock were exercisable. Non-qualified options to purchase 14,286
shares of Common Stock at $1.75, granted on October 25, 1996, are exercisable
at the rate of one-fourth per year. As of September 25, 2001, 14,286 shares
of Common Stock may be purchased.
SECTION 16 COMPLIANCE
The rules of the Securities and Exchange Commission require disclosure
of late Section 16 filings by the Company's directors, officers, and persons
who beneficially own more than 10% of the Company's stock. To the best of the
Company's knowledge and belief, there were no late filings under Section 16 by
or for any of the Company's directors and officers during Fiscal 2001.
It is expected that a representative of BDO Seidman, LLP will be present
at the Annual Meeting to respond to appropriate questions or to make a
statement if he or she so desires.
Audit Fees
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements for the year ended May 31,
2001 was $26,000. The Company was billed a total of $15,000 for the reviews
of the financial statements included in the Company's Form 10-QSB for the
three quarters during fiscal year ended May 31, 2001.
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Financial Information Systems Design and Implementation Fees
There were no fees billed by the principal accountants for professional
services with respect to financial information systems design and
implementation for the fiscal year ended May 31, 2001.
All Other Fees
There were no other services rendered during the fiscal year ended May
31, 2001, with respect to general consulting or income tax preparation.
The audit committee has considered that the provision of the above
services has not impaired the principal accountant's ability to maintain
independence.
Other Business
Management is not aware of any matters to come before the Annual Meeting
other than those stated in the Proxy Statement. However, inasmuch as matters
of which management is not now aware may come before the meeting or any
adjournment thereof, the Proxy confers discretionary authority with respect to
acting thereon, and the persons named in such Proxy intend to vote, act, and
consent in accordance with their best judgment with respect thereto.
Annual Report
The Annual Report to Stockholders and Form 10-KSB covering the Company's
fiscal year ended May 31, 2001, is being mailed to stockholders with this
Proxy Statement. The annual report does not form any part of the material for
the solicitation of the Proxy.
Date for Submission of Stockholder Proposals for Next Annual Meeting
Any proposal relating to a proper subject which a stockholder may intend
to present for action at the next Annual Meeting of Stockholders and which
such stockholder may wish to have included in the Company's proxy materials
for such meeting must, in accordance with the provisions of Rule 14a-8
promulgated under the Securities Exchange Act of 1934, be received in proper
form by the Company at its principal executive office not later than June 23,
2002. It is suggested that any such proposal be submitted by certified mail,
return receipt requested.
By Order of the Board of Directors,
/s/ Zackary S. Irani
Zackary S. Irani
San Marcos, California
September 28, 2001
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