SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarter Ended February 28, 2002 Commission File No. 0-5920
LANCER ORTHODONTICS, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
CALIFORNIA 95-2497155
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
253 Pawnee Street, San Marcos, California 92069
(Address of Principal Executive Offices)
Issuer's telephone number, including area code: (760) 744-5585
Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act
during the preceding 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
State the number of shares outstanding of each of the issuer's
classes of common equity, as of February 14, 2002: 2,098,624
Traditional small business disclosure format (check one):
Yes X No
PART I. FINANCIAL INFORMATION
Item 1. SUMMARIZED FINANCIAL INFORMATION
LANCER ORTHODONTICS, INC.
CONDENSED BALANCE SHEET (UNAUDITED)
02/28/02
ASSETS
CURRENT ASSETS:
Cash $ 120,184
Accounts Receivable, less allowances for sales
returns and doubtful receivables of $171,518 1,068,004
Inventories, net of reserve of $260,562 2,180,433
Prepaid Expenses and Other 60,029
Total Current Assets 3,428,650
PROPERTY AND EQUIPMENT, at cost 2,413,035
Less: Accumulated depreciation (2,360,033)
53,002
INTANGIBLE ASSETS:
Marketing and Distribution Rights, net 66,400
Technology Use Rights, net 40,555
106,955
OTHER ASSETS 39,913
Total Assets $3,628,520
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 318,413
Accrued Payroll and Related Benefits 112,179
Other Current Liabilities 129,365
Line of Credit 117,185
Total Current Liabilities 677,142
Manditorily redeemable convertible preferred stock,
Series C, $.06 noncumulative annual dividend;
$.75 par value: 250,000 shares authorized; 0 shares
issued and outstanding ($.75 liquidation preference) --
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Redeemable Convertible Preferred Stock, Series D,
$.04 noncumulative annual dividend; $.50 par value:
Authorized 500,000 shares; 0 shares issued and
outstanding ($.50 liquidation preference) --
Common Stock, no par value: Authorized 50,000,000
shares; issued and outstanding 2,098,624 4,815,074
Accumulated Deficit (1,863,696)
Total Stockholders' Equity 2,951,378
Total Liabilities and Stockholders' Equity $3,628,520
LANCER ORTHODONTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS AND
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
02/28/02 02/28/01 02/28/02 02/28/01
NET SALES $1,440,732 $1,512,970 $4,504,852 $4,229,504
COST OF SALES 968,326 932,147 3,063,709 2,761,060
Gross Profit 472,406 580,823 1,441,143 1,468,444
OPERATING EXPENSES:
Selling, Gen & Admin 405,704 546,248 1,402,207 1,526,048
Product Development -- 9,649 -- 79,373
TOTAL OPERATING EXPENSES 405,704 555,897 1,402,207 1,605,421
INCOME (LOSS) FROM
OPERATIONS 66,702 24,926 38,936 ( 136,977)
OTHER INCOME (EXPENSE):
Interest Expense ( 5,373) ( 5,543) ( 12,914) ( 15,404)
Other Income
(Expense), net ( 10,957) 471 ( 31,018) 1,428
TOTAL OTHER INCOME
(EXPENSE) ( 16,330) ( 5,072) ( 43,932) ( 13,976)
INCOME (LOSS) BEFORE
INCOME TAXES 50,372 19,854 ( 4,996) ( 150,953)
INCOME TAXES -- -- 800 800
NET INCOME (LOSS) 50,372 19,854 ( 5,796) ( 151,753)
OTHER COMPREHENSIVE INCOME -- -- -- --
COMPREHENSIVE
INCOME (LOSS) $ 50,372 $ 19,854 $( 5,796)$( 151,753)
NET INCOME (LOSS) PER WEIGHTED AVERAGE OF COMMON SHARES
Weighted average number
of common shares 2,098,624 2,098,619 2,098,624 2,098,619
BASIC $ .02 $ .01 $ .00 $ (.07)
Weighted average number
of shares used in
calculation of diluted
earnings per share 2,098,624 2,098,619 2,098,624 2,098,619
DILUTED $ .02 $ .01 $ .00 $ (.07)
LANCER ORTHODONTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
02/28/02 02/28/01
Cash flows from operating activities:
Net loss $( 5,796) $(151,753)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 80,568 90,576
Provision for losses on accounts
receivable ( 3,482) ( 16,776)
Provision for losses on inventory 21,361 27,000
Net change in operating assets and liabilities:
Accounts receivable 96,429 213,953
Inventories ( 61,951) (164,809)
Prepaid expenses and other ( 15,411) 19,463
Accounts payable (142,939) ( 51,457)
Accrued payroll ( 5,546) 80,957
Other current liabilities 68,980 76,351
Net cash provided by operating activities 32,213 123,505
Cash flows from investing activities:
Purchases of property and equipment -- ( 2,400)
Other assets ( 20,764) ( 6,961)
Net cash used in investing activities ( 20,764) ( 9,361)
Cash flows from financing activities:
Net change in line of credit ( 22,815) 20,000
Cash flows provided by (used in) by
financing activities ( 22,815) 20,000
Net change in cash ( 11,366) 134,144
Cash, beginning of period 131,550 103,207
Cash, end of period $120,184 $237,351
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 12,914 $ 15,404
Taxes $ 800 $ 800
LANCER ORTHODONTICS, INC.
Notes to Financial Statements
(A) Basis of Presentation
The accompanying unaudited condensed financial statements have
been prepared in accordance with the instructions to Form 10-QSB
and therefore do not include all information and notes necessary
for a fair presentation of financial position, results of
operations, and cash flows in conformity with generally accepted
accounting principles. The unaudited condensed financial
statements include the accounts of Lancer Orthodontics, Inc.
(the "Company"). The operating results for interim periods are
unaudited and are not necessarily an indication of the results to
be expected for the full fiscal year. In the opinion of
management, the results of operations as reported for the interim
periods reflect all adjustments which are necessary for a fair
presentation of operating results.
(B) Organization
The Company was incorporated on August 25, 1967, in the state of
California, for the purpose of engaging in the design,
manufacture, and distribution of orthodontic products. The
Company has manufacturing facility in Mexico where a majority of
its inventory is manufactured (Note F). The Company also
purchases certain orthodontic and dental products for purposes
of resale. Sales are made directly to orthodontists world-wide
through Company representatives and independent distributors.
The Company also sells certain of its products on a private
label basis.
(C) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America ("GAAP"), requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. Significant estimates made by the Company's management
include, but are not limited to, allowances for doubtful
accounts, allowances for sales returns, the valuation of
inventories, and the realizeability of property and equipment
through future operations. Actual results could materially
differ from those estimates.
(D) Stock Based Compensation
The Company accounts for stock based compensation under Statement
of Financial Accounting Standards No. 123 ("SFAS 123"). SFAS 123
defines a fair value based method of accounting for stock based
compensation. However, SFAS 123 allows an entity to continue to
measure compensation cost related to stock and stock options
issued to employees using the intrinsic method of accounting
prescribed by Accounting Principles Board Opinion No. 25
("APB 25"), "Accounting for Stock Issued to Employees". Entities
electing to remain with the accounting method of APB 25 must make
pro forma disclosures of net income and earnings per share, as if
the fair value method of accounting defined in SFAS 123 had been
applied. The Company has elected to account for its stock based
compensation to employees under APB 25.
(E) Line of Credit
At February 28, 2002, the Company has a $400,000 revolving line
of credit with a financial institution. Borrowings are made at
prime plus 2.00% (6.75% at February 28, 2002) and are limited
to specified percentages of eligible accounts receivable. The
Company currently has $117,185 outstanding under the line of
credit. The unused portion available under the line of credit
at February 28, 2002 was approximately $229,000. The line of
credit expires October 24, 2003.
The line of credit is collateralized by substantially all the
assets of the Company, including inventories, receivables, and
equipment. The lending agreement requires, among other things,
that the Company maintains a tangible net worth of $2,100,000,
which was met, and that receivables payments be sent to a
controlled lockbox. In addition to interest, a management fee
of .25% of the average monthly outstanding loan balance and an
unused balance fee of .0425% on the average monthly unused
portion available are required. The Company is not required to
maintain compensating balances in connection with this lending
agreement.
(F) Commitments and Contingencies
Manufacturing Agreement - In May 1990, the Company entered into
a manufacturing subcontractor agreement whereby the
subcontractor agreed to provide manufacturing services to the
Company through its affiliated entities located in Mexicali,
B.C., Mexico. During fiscal 1992 and 1991, the Company moved
the majority of its manufacturing operations to Mexico. In
December 1992, the Company renegotiated the agreement changing
from an hourly rate per employee to a pass through of actual
costs plus a weekly administrative fee. The amended agreement
gave the Company greater control over all costs associated with
the manufacturing operation. In July 1994, the Company again
renegotiated the agreement, reducing the administrative fee.
Effective April 1, 1996, the Company leased the Mexicali
facility under a separate arrangement. In November 1998, the
Company extended the Manufacturing Agreement through October
2000. Should the Company discontinue operations in Mexico, it
is responsible for the accumulated employee seniority obligation
as prescribed by Mexican law. At February 28, 2002, this
obligation was approximately $311,000. Such obligation is
contingent in nature and accordingly has not been accrued in the
accompanying balance sheet.
The Company has converted Mexican assets and obligations to its
own division, a Mexican corporation named Lancer Orthodontics
de Mexico (Lancer de Mexico). This division will administer
services previously provided by an independent manufacturing
contractor. A new lease was negotiated effective April 1, 2001,
for the 16,000 square foot facility used for Lancer's Mexican
operations. Utility and Mexican vendor obligations have been
converted to the Lancer de Mexico name. This conversion will
eliminate the expense of an administrative fee and is expected
to provide better control in meeting obligations.
Leases - The Company leases its main facility under a non-
cancelable operating lease expiring December 31, 2003, as
extended, which requires monthly rentals that increase annually,
from $2,900 per month in 1994 to $6,317 per month in 2004. The
lease expense is being recognized on a straight-line basis over
the term of the lease. The excess of the expense recognized over
the cash paid aggregates $9,459 at February 28, 2002, and is
included in accrued liabilities in the accompanying balance
sheet. Total rental expense for this facility for the nine
months ended February 28, 2002 was approximately $51,840.
The Company has entered into a non-cancelable operating lease
for its Mexico facility which expires in March 2006 and requires
average monthly rentals of approximately $6,000. Total expense
for this facility for the nine months ended February 28, 2002
was approximately $46,000.
Future aggregate minimum lease payments are as follows:
Years ending May 31,
2002 (3 months) $ 49,369
2003 136,397
2004 106,511
2005 62,292
2006 51,910
Total $406,479
Common Stock - The Company's stock is now traded on the OTC
Bulletin Board.
(G) Income Taxes
At May 31, 2001, the Company had net tax operating loss
carryforwards of approximately $2,049,000 and business tax credits
of approximately $98,000 available to offset future Federal
taxable income and tax liabilities, respectively. The Federal
carryforwards expire in varying amounts through the year 2021.
As of May 31, 2001, the Company had net tax operating loss
carryforwards of approximately $205,000 and business tax credits
of approximately $23,000 available to offset future state income
tax liabilities. The state carryforwards expire through the
year 2011.
(H) Stockholders' Equity
The Company has incentive stock option and non-qualified stock
option plans for directors, officers, and key employees. The
plans provide for the granting of options for common shares at
exercise prices equal to or exceeding the fair market value at
the date of grant, as determined by the Board of Directors.
Options may become exercisable over a period of up to four years
from the date of grant and may be exercised over a period of
three to seven years from the date of the grant, as determined
by the Board of Directors. The Company's shareholders have
authorized a total of 450,000 shares to be available for grant
under the Company's stock option plan. Options granted prior
to May 31, 1995, generally vested on the date of grant and
expired through August 1999.
During the quarter ended February 28, 2002, no options were
granted.
(I) Net Loss per Common Share and Dividends
The Company calculates earnings per share in accordance with
Statement of Financial Accounting Standards ("SFAS 128").
SFAS 128 replaces the presentation of primary and fully diluted
earnings per share with the presentation of basic and diluted
earnings per share. Basic earnings per share excludes dilution
and is calculated by dividing income available to common
stockholders by the weighted-average number of common shares
outstanding for the period.
Diluted earnings per share reflects the potential dilution that
could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted
in the issuance of common stock that then shared in the
earnings of the entity. For all periods presented, no common
stock equivalents have been included in the computation of
diluted earnings per share as they were determined to be
anti-dilutive.
EARNINGS PER SHARE (UNAUDITED)
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
02/28/02 02/28/01 02/28/02 02/28/01
Basic Earnings (Loss) per Share:
Net income (loss) $ 50,372 $ 19,854 $( 5,796) $(151,753)
Net income (loss)
applicable to
common shareholders $ 50,372 $ 19,854 $( 5,796) $(151,753)
Weighted average
number of
common shares 2,098,624 2,098,619 2,098,624 2,098,619
Basic income (loss)
per share $ .02 $ .01 $ .00 $( .07)
Diluted Earnings (Loss) per Share:
Net income (loss)
from primary income
per common share $ 50,372 $ 19,854 $( 5,796) $(151,753)
Net income (loss)
for diluted
earnings per share $ 50,372 $ 19,854 $( 5,796) $(151,753)
Weighted average number
of shares used in
calculation of diluted
earnings per share 2,098,624 2,098,619 2,098,624 2,098,619
Diluted earnings
(loss) per share $ .02 $ .01 $ .00 $( .07)
(J) Financial Information About Foreign and Domestic Operations
and Export Sales
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
02/28/02 02/28/01 02/28/02 02/28/01
Sales to unaffiliated customers:
United States $ 796,747 $ 748,107 $2,272,598 $2,134,981
Europe 383,423 509,479 1,376,944 1,373,921
Central and
South America 81,208 101,194 287,412 267,532
Other Foreign 179,354 154,190 567,898 453,070
$1,440,732 $1,512,970 $4,504,852 $4,229,504
No other geographic concentrations exist where net sales exceed
10% of total net sales.
There were no sales or transfers between geographic areas.
(K) New Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 141
("SFAS 141"), "Business Combinations", which eliminates the
pooling method of accounting for business combinations initiated
after June 30, 2001. In addition, SFAS 141 addresses the
accounting for intangible assets and goodwill acquired in a
business combination. This portion of SFAS 141 is effective for
business combinations completed after June 30, 2001. The Company
does not expect SFAS 141 will have a material impact on the
Company's financial position or results of operations.
In July 2001, the FASB issued Statement of Financial Accounting
Standards No. 142 ("SFAS 142"), "Goodwill and Intangible Assets",
which revises the accounting for purchased goodwill and
intangible assets. Under SFAS 142, goodwill and intangible assets
with indefinite lives will no longer be amortized and will be
tested for impairment annually. SFAS 142 is effective for fiscal
years beginning after December 15, 2001, with earlier adoption
permitted. The Company does not expect SFAS 142 will have a
material impact on the Company's financial position or results of
operations.
In August 2001, FASB issued SFAS No. 144, Impairment or Disposal
of Long-Lived Assets, which addresses accounting and financial
reporting for the impairment or disposal of long-lived assets.
This standard is effective for the Company's financial statements
beginning December 1, 2002. The Company is currently evaluating
the impact, if any, the implementation of this Statement will
have on the Company's financial position and results of
operations.
(L) Asset Purchase Agreement
On February 25, 2002, the Company signed a contract with
Biomerica, Inc., an "Asset Purchase Agreement by and between
Lancer Orthodontics, Inc. and Biomerica, Inc." Under this
asset purchase agreement, Biomerica has agreed to purchase
all of the assets and most of the liabilities of Lancer, in
exchange for Biomerica stock. Following the asset purchase,
Lancer will own between 488,200 and 984,274 shares of
Biomerica. Once Lancer receives the Biomerica shares, Lancer
will dividend the Biomerica shares out to Lancer shareholders.
The transaction is not a merger, it is only a purchase of assets.
Thus, Lancer will not be merged with Biomerica, Lancer
shareholders will retain their Lancer shares, and Lancer
shareholders will receive a dividend of Biomerica shares.
Upon completion of the asset purchase, Lancer will have sold
all of its operations to Biomerica and Lancer will become a
company with no operations.
LANCER ORTHODONTICS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Except for historical information contained herein, the statements
in this Form 10-QSB are forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties which may cause the
Company's actual results in future periods to differ materially
from forecasted results. These risks and uncertainties include,
among other things, the continued demand for the Company's
products, availability of raw materials and the state of the
economy. These and other risks are described in the Company's
Annual Report on Form 10-KSB and in the Company's other filings
with the Securities and Exchange Commission.
RESULTS OF OPERATIONS
For the nine months ended February 28, 2002, net loss decreased
from a net loss of $151,753 for the period ended February 28,
2001, to a net loss of $5,796 for the period ended February 28,
2002. For the three months ended February 28, 2002, net income
increased from a net profit of $19,854 for the period ended
February 28, 2001, to a net profit of $50,372 for the period
ended February 28, 2002. The decrease in loss and the increase
in profit are primarily attributable to the increase in sales
and the decrease in operating expenses.
For the nine months ended February 28, 2002, net sales increased
$275,348 (6.5%) as compared to the year earlier period. For the
three months ended February 28, 2002, net sales decreased
$72,238 (4.8%) as compared to the year earlier period.
International net sales increased $137,731 (6.6%) for the nine
months ended February 28, 2002, and decreased $120,878 (15.8%)
for the three months ended February 28, 2002, as compared to the
year earlier period. The nine-month increase is primarily in
the Middle East region and the three-month decrease is primarily
in Europe. Domestic net sales increased $137,617 (6.5%) and
$48,640 (6.5%), respectively, for the nine months and three
months ended February 28, 2002. The increase is primarily due
to an increase in sales in the Midwest and Southeast regions.
For the nine months ended February 28, 2002, cost of sales as a
percentage of sales (68.0%), increased 2.7% compared to the year
earlier period. For the three months ended February 28, 2002,
cost of sales as a percentage of sales (67.2%), increased 5.6%
compared to the ear earlier period. The increase is primarily
attributable to increased production costs.
For the nine months ended February 28, 2002, selling and general
and administrative expenses decreased $123,841 (8.1%) compared
to the year earlier period. For the three months ended
February 28, 2002, selling and general and administrative
expenses decreased $140,544 (25.7%) as compared to the year
earlier period. The decrease is primarily attributable to a
decrease in marketing labor and travel costs.
For the nine months ended February 28, 2002, product development
expenses decreased $79,373 (100.0%) as compared to the year
earlier period. For the three months ended February 28, 2002,
product development expenses decreased $9,649 (100.0%) compared
to the year earlier period. The decrease is primarily
attributable to a reduction of product development.
For the nine months ended February 28, 2002, interest expense
decreased $2,490 (16.2%) as compared to the year earlier period.
For the three months ended February 28, 2002, interest expense
decreased $170 (3.1%) as compared to the year earlier period.
The decrease is primarily attributable to a decrease in the
interest rate.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
The Company's financial condition at February 28, 2002 and its
previous two fiscal year ends was as follows:
02/28/02 05/31/01 05/31/00
Current Assets $3,428,650 $3,476,962 $3,395,922
Current Liabilities 677,142 779,462 681,367
Working Capital 2,751,508 2,697,500 2,714,555
Bank Debt 117,185 140,000 160,000
Shareholder Equity 2,951,378 2,957,174 3,074,033
Total Assets 3,628,520 3,736,636 3,755,400
Cash decreased $11,366 during the nine months ended February 28,
2002.
Working capital increased $54,008 during the nine months ended
February 28, 2002, primarily attributable to a decrease in
payables. The Company expects to meet its cash requirements out
of its cash reserves, cash flow, and line of credit.
At February 28, 2002 the Company has a $400,000 revolving line
of credit with a financial institution. Borrowings are made at
prime plus 2.00% (6.75% at February 28, 2002) and are limited
to specified percentages of eligible accounts receivable. The
Company currently has $117,185 outstanding under the line of
credit. The unused portion available under the line of credit
at February 28, 2002 was approximately $229,000. The line of
credit expires October 24, 2003.
The line of credit is collateralized by substantially all the
assets of the Company, including inventories, receivables, and
equipment. The lending agreement requires, among other things,
that the Company maintains a tangible net worth of $2,100,000,
which was met, and that receivables payments be sent to a
controlled lockbox. In addition to interest, a management fee
of .25% of the average monthly outstanding loan balance and an
unused balance fee of .0425% on the average monthly unused
portion available are required. The Company is not required to
maintain compensating balances in connection with this lending
agreement.
We may face interruption of production and services due to
increased security measures in response to terrorism. Our
business depends on the free flow of products and services
through the channels of commerce. Recently, in response to
terrorists' activities and threats aimed at the United States,
transportation, mail, financial and other services have been
slowed or stopped altogether. Further delays or stoppages in
transportation, mail, financial or other services could have a
material adverse effect on our business, results of operations
and financial condition. Furthermore, we may experience an
increase in operating costs, such as costs for transportation,
insurance and security as a result of the activities and
potential activities. We may also experience delays in
receiving payments from payers that have been affected by the
terrorist activities and potential activities. The U. S.
economy in general is being adversely affected by the
terrorist activities and potential activities and any economic
downturn could adversely impact our results of operations,
impair our ability to raise capital or otherwise adversely
affect our ability to grow our business.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS Not Applicable
Item 2. CHANGES IN SECURITIES Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a. The Annual Meeting of the Company's shareholders was
originally scheduled on November 12, 2001. The Company
adjourned the meeting prior to any matter being
submitted to a vote of the shareholders. The Company
intends to reschedule the meeting.
Item 5. OTHER INFORMATION
On February 25, 2002, the Company signed a contract with
Biomerica, Inc., an "Asset Purchase Agreement by and between
Lancer Orthodontics, Inc. and Biomerica, Inc." Under this
asset purchase agreement, Biomerica has agreed to purchase
all of the assets and most of the liabilities of Lancer, in
exchange for Biomerica stock. Following the asset purchase,
Lancer will own between 488,200 and 984,274 shares of
Biomerica. Once Lancer receives the Biomerica shares, Lancer
will dividend the Biomerica shares out to Lancer shareholders.
The transaction is not a merger, it is only a purchase of assets.
Thus, Lancer will not be merged with Biomerica, Lancer
shareholders will retain their Lancer shares, and Lancer
shareholders will receive a dividend of Biomerica shares.
Upon completion of the asset purchase, Lancer will have sold
all of its operations to Biomerica and Lancer will become a
company with no operations.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
There were no Form 8-k reports filed during the quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
LANCER ORTHODONTICS, INC.
Registrant
Date April 15, 2002 By /s/ Zackary Irani
Zackary Irani,
Chief Executive Officer