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.
(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 (Set forth the amount on which the
filing fee is calculated and state how it was
determined):
(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
be registration statement number or the Form or
Schedule and date of its filing.
(1) Amount previously paid:
(2) Form, Schedule, or Registration Statement No.:
(3) Filing party:
(4) Date filed:
LANCER ORTHODONTICS, INC.
NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 20, 2002
AND PROXY STATEMENT
The 2002 Annual Meeting of Shareholders of Lancer
Orthodontics, Inc. (the "Company") will be held at 2:00 p.m. on
Wednesday, November 20, 2002, 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 7, 2002, 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 30, 2002
LANCER ORTHODONTICS, INC.
253 PAWNEE STREET
SAN MARCOS, CALIFORNIA 92069
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 20, 2002
PROXY STATEMENT
INTRODUCTION
The Annual Meeting of Shareholders of Lancer Orthodontics,
Inc., a California Corporation, (the "Company") will be held at
2:00 p.m. on November 20, 2002, at Biomerica, Inc.'s Corporate
Offices, 1533 Monrovia Avenue, Newport Beach, California 92663
for the purposes set forth on the accompanying Notice of 2002
Annual Meeting of Shareholders. This Proxy Statement and the
enclosed Proxy are being mailed on or about October 21, 2002, to
shareholders of the Company in connection with the solicitation,
by the Company's Board of Directors, of proxies to be used at
the 2002 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 7, 2002, are entitled to vote at the meeting or any
adjournment thereof. As of September 20, 2002, the Company had
outstanding 2,196,223 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
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.
Amount and
Name and Nature of Percent
Address of Beneficial of
Beneficial Owner (1)(2) Ownership (3) Class (2)
Biomerica 683,562 (4) 31.1%
Zackary Irani 168,397 (5) 7.4%
Janet Moore 310,163 (6) 14.0%
Dr. Robert Orlando 32,042 (7) 1.5%
Dr. Francis Cano 20,000 (8) .9%
All executive officers
And directors as a group
(5 persons) 530,602 (9) 22.9%
(1) The address for Mr. Irani, Ms. Moore, Dr. Orlando, and Dr.
Cano is 1533 Monrovia Avenue, Newport Beach CA 92663.
(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 2,196,223 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.
(4) Biomerica, Inc.'s address is 1533 Monrovia Avenue, Newport
Beach CA 92663.
(5) Includes 77,167 shares of Common Stock underlying options
exercisable by Mr. Irani at or within 60 days after the
date of the proxy.
(6) 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.
(7) Includes 13,500 shares of Common Stock underlying options
exercisable by Dr. Orlando at or within 60 days after the
date of the proxy.
(8) Includes 20,000 shares of Common Stock underlying options
exercisable by Dr. Cano at or within 60 days after the
date of the proxy.
(9) Includes 124,167 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.
Certain Related Transactions
The Company paid Biomerica, Inc. $11,500 for accounting
and administrative fees, and issued 37,595 shares of restricted
common stock for legal fees of $8,271, associated with filing a
special proxy and S-8.
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 four (4) 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 four
persons to serve as Directors until the next annual meeting of
shareholders or until their successors have been duly elected
and qualified.
Name Age Position
Zackary Irani 36 Chairman of the Board, CEO,
and Director
Janet Moore 51 Secretary and Director
Dr. Robert Orlando 64 Director
Dr. Francis Cano 58 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 and Chairman 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. Mr. Irani has been fully
employed by the Company since June, 2002.
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,
Treasurer, 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.
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.
Meetings of the Board of Directors and its Committees
The Board of Directors met three times during the fiscal
year ended May 31, 2002 (the "2002 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 Mr. Z. Irani and Dr. Cano. The
Executive Committee did not meet during the 2002 Fiscal Year.
The Audit Committee is presently composed of Ms. Moore and
Dr. Orlando. The Audit Committee met once with the auditors
during the 2002 Fiscal Year.
The Executive Compensation Committee is composed of Ms.
Moore and Dr. Orlando. The Executive Compensation Committee did
not meet in Fiscal 2002.
Each outside Director is to be paid $500 for each Board or
Committee meeting attended and $200 for each telephonic meeting.
Currently accrued fees are only owed to Dr. Cano.
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
Other Restr- Securities All
Name and Annual icted Underlying Other
Principal Compen- Stock Options/ LTIP Comp-
Position (1) Year Salary(2) Bonus sation Awards SARs Payouts
ensation
Zackary Irani,
Chairman of the 2002 $30,000(2) -- -- $21,000(5)$33,900(6) -- --
Board and Chief 2001 $ 3,000(3) -- -- -- -- -- --
Executive Officer 2000 $ 7,700(4) -- -- -- -- -- --
(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) This sum includes directors fees which have been accrued and
partially paid with shares of common stock.
(3) This sum represents directors fees which have been accrued
and partially paid with shares of common stock.
(4) This sum represents directors fees which have been accrued
and paid with 7,700 shares of stock.
(5) This sum represents 60,000 shares of restricted common
stock at $.35 per share to be issued.
(6) This sum represents 113,000 options to purchase common
stock at $.30 per share, exercisable at the rate of one-
third per year.
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, 2002.
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, 2002.
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,
2002 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
Janet Moore 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, 2002, to the
Company's Chief Executive Officer.
Individual Grants
Percent of
Number Total
of Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
Zackary Irani 113,000 -- $.30 --
Options Exercises and Fiscal Year End Values
The following table presents information for the named
officer in the Summary Compensation Table with respect to options
exercised during Fiscal 2002 and unexercised options held as of
the end of the fiscal year.
Number of Value of
Securities Unexercised
Shares Underlying in the Money
Acquired Unexercised Options
On Value Options at at Fiscal Year
Name Exercise Realized Fiscal Year End End(1)
(#) ($) Exercisable Unexercisable Exercisable Unexercisable
Zackary
Irani -0- -0- 77,167 75,333 -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 20, 2002, options to purchase 344,000 shares of Common
Stock were exercisable at prices ranging from $.25 to $1.00 per
share with an average exercise price of $.65. As of September 20,
2002, options to purchase 268,667 shares of Common Stock were
exercisable. Non-qualified options to purchase 113,000 shares
of Common Stock at $.30, granted on December 1, 2001, are
exercisable at the rate of one-third per year. Non-qualified
options to purchase 20,000 shares of Common Stock at $.40 will
expire on October 15, 2002 if not exercised.
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 2002.
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, 2002 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.
The audit committee has considered that the provision of
the above services has not impaired the principal accountant's
ability to maintain independence.
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, 2002.
All Other Fees
The Company paid professional fees of $1,200 for the
Review of the 2001 proxy.
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, 2002, 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, 2003. 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 30, 2002