Parallel Industries (EAPH) 10QSB/A 2004 Q1 Quarterly report (small business) (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-QSB/A

Amendment No. 1

[X] Quarterly Report under Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the quarterly period ended March 31, 2004
or

[   ] Transition Report under Section 13 or 15 (d) of
the Securities Exchange Act of 1934

Commission file No. 000-30641

L.A.M. PHARMACEUTICAL, CORP.

(Exact name of registrant as specified in its charter)

Delaware	52-2278236
(State of incorporation)	(I.R.S. Employer Identification Number)

800 Sheppard Avenue West,
Commercial Unit 1
Toronto, Ontario, Canada M3H 6B4

(Address of principal executive offices) (Zip Code)

(877) 526-7717

(Registrant’s telephone number, including area code)

Check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES [X]      NO [   ]

As of April 30, 2004, we had 59,072,570 issued and outstanding shares of common stock.

1

Purpose

This Form 10-QSB/A, which amends the Form 10-QSB for the three month period ended March 31, 2004 of L.A.M. Pharmaceutical, Corp. is being filed solely to amend and restate the information required by Item 1 of Part I of Form 10-QSB.

INDEX

	Page
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Balance Sheets at March 31, 2004 (Unaudited) and December 31, 2003		4
Statements of Changes in Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2004 and 2003 (Unaudited)		5
Statements of Operations for the Three Months Ended March 31, 2004 and 2003 (Unaudited)		6
Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 (Unaudited)		7
Notes to Financial Statements		9
PART I
FINANCIAL INFORMATION
Item. 1 Financial Statements
See the financial statements filed as part of this report (pages 4 to 11).
Section 302 Certification of CEO
Section 906 Certification of CEO

2

L.A.M. PHARMACEUTICAL, CORP.

(A DELAWARE CORPORATION)
Lewiston, New York

FINANCIAL REPORTS
AT
MARCH 31, 2004

3

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

BALANCE SHEETS

	(Unaudited and
	Restated)			(Restated)
	March 31,			December 31,
	2004			2003
ASSETS
Current Assets
Cash and Cash Equivalents	$	782,846		$	25,132
Accounts Receivable, net		7,746			8,936
Inventory		474,768			482,667
Prepaid Expenses		73,560			73,560
Total Current Assets		1,338,920			590,295
Property and Equipment - Net of Accumulated Depreciation		93,411			100,020
Other Assets
Patents and Trademarks - Net of Accumulated Amortization		615,870			591,543
Total Assets	$	2,048,201		$	1,281,858
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts Payable and Accrued Expenses	$	817,417		$	1,027,561
Total Current Liabilities		817,417			1,027,561
Other Liabilities
Due to Stockholders		149,545			149,545
Deferred Royalty Revenue		207,360			207,360
Total Liabilities		1,174,322			1,384,466
Stockholders’ Equity (Deficit)
Common Stock - $.0001 Par; 150,000,000 and 50,000,000 Shares Authorized, Respectively; 48,850,473 and 45,809,364 Shares Issued and Outstanding, Respectively		4,885			4,581
Additional Paid-In Capital		31,582,867			29,022,904
Accumulated Deficit		(30,713,873	)		(29,130,093	)
Total Stockholders’ Equity (Deficit)		873,879			(102,608	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	2,048,201		$	1,281,858

The accompanying notes are an integral part of these financial statements.

4

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

					Additional						Total
	Number		Common		Paid-In			Accumulated			Stockholders’
	of Shares		Stock		Capital			Deficit			Equity (Deficit)
Balance - December 31, 2002 - Restated		27,511,412	$	2,751	$	25,952,644		$	(26,411,739	)	$	(456,344	)
Capital Contribution – Interest Expense		—		—		2,153			—			2,153
Stock Options Granted - Compensation for Services Rendered		—		—		10,440			—			10,440
Common Shares Issued - Compensation for Services Rendered		335,000		33		(79,295	)		—			(79,262	)
Conversion of Convertible Notes		1,736,734		174		510,426			—			510,600
Receivable on Option Exercise		—		—		15,708			—			15,708
Net Loss for the Period (Unaudited)		—		—		—			(917,707	)		(917,707	)
Balance – March 31, 2003 (Unaudited and Restated)		29,583,146	$	2,958	$	26,412,076		$	(27,329,446	)	$	(914,412	)
Balance - December 31, 2003 - Restated		45,809,364	$	4,581	$	29,022,904		$	(29,130,093	)	$	(102,608	)
Capital Contribution – Interest Expense		—		—		1,869			—			1,869
Stock Options Granted - Compensation for Services Rendered		—		—		12,188			—			12,188
Common Shares Issued - Compensation for Services Rendered		607,560		61		110,979			—			111,040
Sale of Shares Under the Stock Subscription Agreements		300,000		30		958,480			—			958,510
Premium on the Issuance of Warrants		—		—		624,707			—			624,707
Warrant Exercise		2,133,549		213		259,160			—			259,373
Receivable on Option Exercise		—		—		580			—			580
Receivable on Sale of Stock Subscription Agreements		—		—		32,000			—			32,000
Subscription of Stock in Settlement of Lawsuit		—		—		560,000			—			560,000
Net Loss for the Period (Unaudited)		—		—		—			(1,583,780	)		(1,583,780	)
Balance – March 31, 2004 (Unaudited and Restated)		48,850,473	$	4,885	$	31,582,867		$	(30,713,873	)	$	873,879

The accompanying notes are an integral part of these financial statements.

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF OPERATIONS (UNAUDITED)

	(Restated)
	Three Months Ended
	March 31,
	2004			2003
Revenues
Net Sales	$	18,636		$	30,844
Expenses
Cost of Sales		3,963			6,788
General and Administrative		197,887			174,048
Marketing and Business Development		165,582			69,232
Research and Development		31,239			79,323
Depreciation and Amortization		17,169			16,867
Warrant Premium		624,707			—
Total Expenses		1,040,547			346,258
Loss Before Other Expenses		(1,021,911	)		(315,414	)
Other Expenses
Interest Expense		(1,869	)		(2,293	)
Provision for Lawsuit Settlement		(560,000	)		—
Provision for Arbitration Settlement		—			(600,000	)
Total Other Expenses		(561,869	)		(602,293	)
Net Loss for the Period	$	(1,583,780	)	$	(917,707	)
Net Loss per Common Share - Basic and Diluted	$	(0.03	)	$	(0.03	)
Weighted Average Number of Common Shares Outstanding – Basic and Diluted		47,886,434			29,267,371

The accompanying notes are an integral part of these financial statements.

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended
	March 31,
	(Restated)
	2004			2003
Cash Flows from Operating Activities
Net Loss for the Period	$	(1,583,780	)	$	(917,707	)
Adjustments to Reconcile Net Loss for the Period to Net Cash Flows from Operating Activities:
Depreciation and Amortization		17,169			16,867
Capital Contributions:
Premium on the Issuance of Warrants		624,707			—
Deemed Interest Expense on Loans from Stockholders		1,869			2,153
Share and Option Grants to Consultants		60,123			(68,822	)
Provision for Lawsuit Settlement		560,000			—
Provision for Arbitration Settlement		—			600,000
Changes in Assets and Liabilities:
Accounts Receivable		1,190			4,066
Inventory		7,899			16,470
Prepaid Expenses		—			(3,045	)
Accounts Payable and Accrued Expenses		(147,039	)		131,306
Net Cash Flows from Operating Activities		(457,862	)		(218,712	)
Cash Flows from Investing Activities
Investment in Property and Equipment		—			(1,495	)
Investment in Patents and Trademarks – Net		(34,887	)		(27,113	)
Net Cash Flows from Investing Activities		(34,887	)		(28,608	)
Cash Flows from Financing Activities
Proceeds from Exercise of Stock Options		580			15,708
Proceeds from the Sale of Shares Under Share Subscription Agreements		990,510			—
Proceeds from Exercise of Warrants		259,373			—
Advances from Stockholders		—			139,390
Net Cash Flows from Financing Activities		1,250,463			155,098
Net Change in Cash and Cash Equivalents		757,714			(92,222	)
Cash and Cash Equivalents - Beginning of Period		25,132			210,214
Cash and Cash Equivalents - End of Period	$	782,846		$	117,992

The accompanying notes are an integral part of these financial statements.

-continued-

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

STATEMENTS OF CASH FLOWS (UNAUDITED) – continued

	Three Months Ended
	March 31, 2004
	2004		2003
Non-Cash Investing and Financing Activities
Debentures Converted to Common Stock	$	—	$	510,600
SUPPLEMENTAL DISCLOSURE
Interest Paid	$	—	$	—
Income Taxes Paid	$	—	$	—

The accompanying notes are an integral part of these financial statements.

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS

Note A - Basis of Presentation

The condensed financial statements of L.A.M. Pharmaceutical, Corp. (the “Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the annual audited financial statements and the notes thereto included in the Company’s Form 10-KSB and other reports filed with the SEC.

The accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year as a whole. Factors that affect the comparability of financial data from year to year and for comparable interim periods include non-recurring expenses associated with market launch of new products, costs incurred to raise capital, acquisitions of patents and trademarks, and stock options and awards.

Note B - Accounting Policies

Revenue Recognition

The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable when the product has been shipped to the customer, the sales price is fixed or determinable and collectibility is reasonably assured. The Company reduces revenue for estimated customer returns.

Method of Accounting

The Company maintains its books and prepares its financial statements on the accrual basis of accounting.

Note C - Inventory

Inventory at period end consisted of the following:

	March 31,		December 31,
	2004		2003
IPM Wound Gel™	$	472,643	$	480,542
Raw Materials		2,125		2,125
Inventory	$	474,768	$	482,667

Note D - Share and Option Grants

The Company has stock option plans under which employees, non-employee directors, consultants and investors may be granted options to purchase shares of the Company’s common stock. Options have varying vesting and expiration dates.

-continued-

L.A.M. PHARMACEUTICAL, CORP.
(A DELAWARE CORPORATION)
Lewiston, New York

NOTES TO FINANCIAL STATEMENTS

Note D - Share and Option Grants - continued

The Company applies Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations in accounting for its employee stock option plans. Accordingly, no compensation expense has been recognized for its employee stock option plans. The Company adopted the disclosure provisions of SFAS No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure”.

The following table illustrates the effect on net earnings and earnings per share had the Company adopted the fair value based method of accounting for stock-based employee compensation for all periods presented:

	For the three months ended March 31,
	2004		2003
Net loss
As reported	$	1,583,780	$	917,707
Pro forma	$	1,583,780	$	925,706
Net Loss per share
As reported	$	0.03	$	0.03
Pro forma	$	0.03	$	0.03

Note E - Common Stock

During the three months ended March 31, 2004 the Company sold units of the Company’s common stock in which each unit consists of 1,000 shares of the Company’s common stock plus 750 warrants. Each warrant will entitle the holder to purchase one share of the Company’s common stock as follows:

• One third of warrants may be exercised at any time prior to June 30, 2005 at prices ranging from $0.35 to $0.60 per share

• One third of warrants may be exercised at any time prior to December 31, 2005 at prices ranging from $0.35 to $0.75 per share

• One third of warrants may be exercised at any time prior to June 30, 2006 at prices ranging from $0.55 to $1.00 per share

As of March 31, 2004 the Company sold 5,512,000 shares of its common stock, plus warrants for the purchase of an additional 4,134,000 shares for proceeds amounting to $1,229,760 to 33 investors. As of March 31, 2004 the Company has not issued the common stock in relation to the subscription agreements.

Note F - Commitments & Contingencies

In March 2004, a consultant filed a lawsuit with the District Court of Montreal in Quebec, Canada in the amount of $2.8 million against the Company and one of its directors alleging that the Company failed to issue shares of its common stock to the individual for services rendered during the periods of 2001 and 2002. On April 26, 2004 the Company and the consultant reached an out of court settlement of the lawsuit which resulted in the issuance of two million shares of its common stock. The Company has recorded $560,000, the effect of the settlement, in the financial statements for the three months ended March 31, 2004.

Note G - Restatement

The financial statements have been restated to reclassify the amounts related to shares and option grants to general and administrative, marketing and business development expenses in order to be consistent with similar expenses paid in cash. The Company has also restated the financial statements as a result of a mechanical error in the calculation of the non-cash compensation expense on options granted and the non-cash premium expense on the warrants issued in connection with the Company’s private placement in the first quarter of 2004. The restatement in the compensation expense and warrant premium resulted in an additional loss of $607,200 for the quarter ended March 31, 2004. The restatements had no effect on total stockholders’ equity at March 31, 2004 or 2003.

	Restated		Originally Reported		Restated		Originally Reported
Three Months Ended March 31,	2004		2004		2003		2003
General and Administrative		197,887		175,152		174,048		159,997
Marketing and Business Development		165,582		128,194		69,232		152,105
Share and Option Grants to Officers, Directors, Investors and Consultants		—		52,389		—		(68,822	)
Warrant Premium		624,707		25,241		—		—

In addition Note D – Share and Option Grants has been restated to correct the pro forma net loss for the three months ended March 31, 2003. The as reported and pro forma net loss for the three months ended March 31, 2004 has also been restated.

Item 6. Exhibits and Reports on Form 8-K

  Exhibits

Exhibit 31.1	Certification by Joseph T. Slechta, President, Chief Executive Officer, Principal Financial Officer and Chief Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	Certification by Joseph T. Slechta, President, Chief Executive Officer, Principal Financial Officer and Chief Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

  Reports on Form 8-K

None

SIGNATURES

In accordance with the requirements of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

	L.A.M. PHARMACEUTICAL, CORP.
October 13, 2004	By:	/s/ Joseph T. Slechta
		Joseph T. Slechta, President, Chief Executive Officer, Principal
		Financial Officer and Chief Accounting Officer