March 21, 2005
Christopher Maus
President and Chief Executive Officer
Lifestream Technologies, Inc.
510 Clearwater Loop
Suite 101
Post Falls, ID 83854
Re: Lifestream Technologies, Inc.
Amended Registration Statement on Form SB-2
File No. 333-121991
Filed on March 7, 2005
Dear Mr. Maus:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form SB-2
Risk Factors - Page 3
1. We reissue comment 2 in part. We note that you did not make
any
revision to the first sentence of the last paragraph of this
section
to remove any implication that you have not disclosed any material
risk factors (page 8).
The lack of Medicare - Page 9
2. Supplementally support your statement that "Congress is
favorably
considering reimbursement..."
Business
Consumer Marketplace - Page 10
3. Please expand your disclosure in response to previous comment 9
to
clarify whether your product provides the data that NCEP
recommends.
Sales Concentrations with Major Customers - Page 12
4. Expand your disclosure to identify the lost customer.
Intellectual Property Rights - Page 13
5. We reissue comment 15 in part. Please tell us what revisions
were
made in response to the second sentence of our previous comment.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations - Page 18
6. We note your reference to a feature on a national television
network. Clarify the nature of these sales. Was the network a
commercial network that featured the placement of your product in
a
series? Did you pay to place your product in the series? Was the
network a shopping network? What were the terms of this
arrangement?
Consolidated Results of Operations - Fiscal 2004 - Page 21
7. We reissue comment 18 in part. Please tell us what revisions
were
made in response to the portion of the last sentence in our
previous
comment relating to fiscal year 2004 results (salaries expense and
costs for the board of directors).
Security Ownership of Certain Beneficial Owners and Management -
Page
37
8. Please reconcile the 69.6 million shares of common stock into
which the promissory notes held by RAB would convert with the
amounts
of those notes and the conversion rates as disclosed in the
section
"Certain Relationships and Related Transactions."
Executive Compensation - Page 41
9. Please expand your disclosure to clarify the background of the
reductions in salary by Mr. Maus and Mr. Siemens, including the
dates
of those reductions, who elected to effect the reductions, and why
Mr. Maus and Mr. Siemens earned compensation higher than their
base
salary in each year reported in the table in this section.
Finally,
tell us why the deferred compensation is not reported in the year
earned as required by Item 402 of Regulation SB.
Description of Securities - Page 53
10. Expand your disclosure in response to previous comment 36 to
explain "the maximum extent...permitted by the General Corporation
Law."
Financial Statements - Page F-1
Notes to Financial Statements - F-9
Note 13 - Convertible Debt - Page F-17
11. We have reviewed your response to prior comment 50. Please
provide the following for each debt issuance as of June 30, 2004
and
2003:
* The unamortized debt discount
* The carrying amount of the debt
* The debt discount amortization expensed for the period
* A reconciliation of interest and financing expense by issuance
12. We have reviewed your response to prior comment 53. Please
tell
us your basis for accounting for the original issue debt discount
as
a deferred financing cost. Debt / note discounts are normally
recorded as contra liabilities to the face amount of the debt.
Also
address the original issue discount of $449,417 that you
recognized
as deferred financing costs in quarter ending December 31, 2004.
Cite any authoritative literature upon which you are relying.
13. We have reviewed your response to prior comment 54. Please
revise your convertible debt footnote to clearly indicate which
notes
were converted and disclose the carrying amount of each note and
the
unamortized discount on each note at the time of the conversion.
Part II
Exhibits - Page II-10
14. We note that you have requested confidential treatment for the
settlement agreement with Polymer Technology Systems. We will
review
and provide comments on your request separately. All comments
concerning your confidential treatment request must be resolved
prior
to requesting acceleration of effectiveness of your registration
statement. Also, please revise your exhibit index to indicate
that
confidential treatment has been requested with respect to portions
of
this agreement.
15. We note that your response to previous comment 32 indicates
that
you did not file some exhibits because they are "not deemed to be
a
material contract." Please clarify your basis for why the exhibit
is
not required to be filed, particularly given the requirements of
Regulation S-B Item 601(b)(10)(ii)(A).
* * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Eric Atallah at (202) 824-5266, or Dan
Gordon,
Branch Chief, at (202) 942-2813 if you have questions regarding
comments on the financial statements and related matters. Please
contact Dan Duchovny at (202) 942-2962 or me at (202) 824-5697
with
any other questions.
Sincerely,
Russell Mancuso
Branch Chief
cc (via fax): Steven Weinberger, Esq. (561) 362-9612
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Christopher Maus
Lifestream Technologies, Inc.
March 21, 2005
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