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, 2001 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 April 16, 2001: 2,098,619
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)
02/28/01
ASSETS
CURRENT ASSETS:
Cash $ 237,351
Accounts Receivable, less allowances for sales
returns and doubtful receivables of $158,224 1,035,593
Inventories, net of reserve of $137,167 2,151,054
Prepaid Expenses 27,237
Total Current Assets 3,451,235
PROPERTY AND EQUIPMENT, at cost 2,406,129
Less: Accumulated depreciation (2,321,938)
84,191
INTANGIBLE ASSETS:
Marketing and Distribution Rights, net 91,300
Technology Use Rights, net 89,251
180,551
OTHER ASSETS 13,522
Total Assets $3,729,499
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable and Accrued Liabilities $ 627,218
Line of Credit 180,000
Total Current Liabilities 807,218
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' EQUITY:
Redeemable Convertible Preferred Stock, Series C,
$.06 noncumulative annual dividend; $.75 par value:
Authorized 250,000 shares; no shares issued and
outstanding ($.75 liquidation preference) --
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 2,098,619 4,815,074
Accumulated Deficit (1,892,793)
Total Stockholders' Equity 2,922,281
Total Liabilities and Stockholders' Equity $3,729,499
LANCER ORTHODONTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS AND
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
02/28/01 02/29/00 02/28/01 02/29/00
NET SALES $1,512,970 $1,372,209 $4,229,504 $4,031,123
COST OF SALES 932,147 967,936 2,761,060 2,733,605
Gross Profit 580,823 404,273 1,468,444 1,297,518
OPERATING EXPENSES:
Selling, General &
Administrative 546,247 525,224 1,526,047 1,612,829
Product Development 9,649 32,032 79,373 138,368
TOTAL OPERATING EXPENSES 555,896 557,256 1,605,420 1,751,197
INCOME (LOSS) FROM
OPERATIONS 24,927 ( 152,983) ( 136,976) ( 453,679)
OTHER INCOME (EXPENSE):
Interest Expense ( 5,543) ( 5,137) ( 15,404) ( 13,308)
Other Income
(Expense), net 471 4,660 1,428 172,245
TOTAL OTHER INCOME (EXP)( 5,072) ( 477) ( 13,976) 158,937
INCOME (LOSS) BEFORE
INCOME TAXES 19,855 ( 153,460) ( 150,952) ( 294,742)
INCOME TAXES -- -- 800 800
NET INCOME (LOSS) 19,855 ( 153,460) ( 151,752) ( 295,542)
OTHER COMPREHENSIVE INC -- -- -- --
COMPREHENSIVE INCOME
(LOSS) $ 19,855 $(153,460) $(151,752) $(295,542)
NET INCOME (LOSS) PER WEIGHTED AVERAGE OF COMMON SHARES
Weighted average number
Of common shares 2,098,619 2,018,262 2,098,619 2,047,809
BASIC $ .01 $ (.08) $ (.07) $ (.14)
Weighted average number
of shares used in
calculation of diluted
earnings per share 2,098,619 2,018,262 2,098,619 2,047,809
DILUTED $ .01 $ (.08) $ (.07) $ (.14)
LANCER ORTHODONTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
02/28/01 02/29/00
Cash flows from operating activities:
Net loss $(151,752) $(295,542)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 90,576 113,113
Provision for losses on accts rec -- ( 3,425)
Provision for losses on inventory 27,000 24,000
Common stock issued for services
to directors -- 23,170
Net change in operating assets and liabilities:
Accounts receivable 197,177 131,905
Inventories (164,809) 13,069
Prepaid expenses 19,463 23,443
Insurance claim receivable -- 110,000
Refundable Utility Deposits ( 6,962) --
Accounts payable and accrued
liabilities 105,851 ( 3,705)
Net cash provided by operating activities 116,544 136,028
Cash flows from investing activities:
Purchases of property and equipment ( 2,400) ( 6,683)
Net cash used in investing activities ( 2,400) ( 6,683)
Cash flows from financing activities:
Repurchase of common stock -- (117,883)
Increase in line of credit 20,000 40,000
Cash flows provided by (used in) by
financing activities 20,000 ( 77,883)
Net change in cash 134,144 51,462
Cash, beginning of period 103,207 106,292
Cash, end of period $237,351 $157,754
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 15,404 $ 13,308
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 a 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
generally accepted accounting principles ("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, 2001, the Company has a $300,000 line of credit
with a bank. Borrowings are made at prime plus 1.25% (9.75% at
February 28, 2001) and are limited to specified percentages of
eligible accounts receivable. The unused portion available
under the line of credit at February 28, 2001 was $120,000.
The line of credit expires on September 10, 2001.
The line of credit is collateralized by substantially all the
assets of the Company, including inventories, receivables, and
equipment. The lending agreement for the line of credit
requires, among other things, that the Company maintain a
tangible net worth of $2,800,000 and a debt to tangible net
worth ratio of no more than 1 to 1. The Company is not
required to maintain compensating balances in connection with
this lending agreement. The Company was in violation of
certain of its debt covenants at February 28, 2001. A waiver
has been requested but not yet received as of the date of filing.
(F) Commitments and Contingencies
Manufacturing Agreement - The Company has 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. The Company has 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 gives 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 December
2003. The Company has retained the option to convert the
2004. manufacturing operation to a wholly-owned subsidiary
at any time. Should the Company discontinue operations in
Mexico, it is responsible for the accumulated employee
seniority obligation as prescribed by Mexican law. At
February 28, 2001, this obligation was approximately $379,000.
Such obligation is contingent in nature and accordingly has
not been accrued in the accompanying balance sheet.
Leases - Lancer conducts its operations in leased facilities
located in San Marcos, California and Mexicali, Mexico. The San
Marcos facility consists of a 9,240 square foot manufacturing
and office building. The term of the initial lease was for
five years commencing January 1, 1994 and ending December 31,
1998. In 1998, Lancer renegotiated the lease and extended the
terms to December 31, 2003. The Mexicali facility consists of
a 16,000 square foot manufacturing and office building. The
term of the lease is for sixty months commencing November 1, 1998
and ending October 31, 2003. Management believes that the
properties are currently suitable and adequate for Lancer's
operations. Future aggregate minimum annual cash lease
payments are as follows:
Years ending
May 31, 2001 $ 38,951
May 31, 2002 145,547
May 31, 2003 148,401
Thereafter 75,651
Total $408,550
Mexico Operations - The Company is in the process of converting
Mexican assets and obligations to its own division, a Mexican
corporation named Lancer Orthodontics de Mexico (Lancer de
Mexico). This division will administer services currently
provided by an independent manufacturing contractor. A new
lease is being negotiated for the 16,000 square foot facility
currently used for Lancer's Mexican operations. The new
lease will replace the sub-lease currently in effect with the
independent contractor. Utility and Mexican vendor obligations
are also being 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.
Cash at February 28, 2001 on the accompanying balance sheet
includes a Lancer de Mexico peso bank account converted to
approximately $800 USD.
Listing Requirements - In a letter dated November 10, 2000,
NASDAQ had advised the Company that it was not in compliance
with the minimum bid price required for listing on the Nasdaq
National Market. The Company was being afforded a ninety-day
grace period, until February 8, 2001, to remedy this deficiency.
NASDAQ also advised the Company on January 5, 2001, that it
was not in compliance with the minimum market value of public
float and that the Company was being afforded a ninety-day
grace period, until April 5, 2001, to remedy this deficiency.
A hearing before a Nasdaq panel was held on March 23, 2001
in Washington D.C. regarding the proposed delisting of the
Company's stock. A letter dated March 30, 2001 stated that
the panel determined to delist the Company's securities from
the Nasdaq Stock Market effective with the open of business
Monday, April 2, 2001. The Company's stock will thereafter
trade on the OTC Bulletin Board.
(G) Income Taxes
At May 31, 2000, the Company had net tax operating loss
carryforwards of approximately $2,101,000 and business tax
credits of approximately $114,735 available to offset future
Federal taxable income and tax liabilities, respectively. The
Federal carryforwards expire in varying amounts from 2000 to
2019. As of May 31, 2000, the Company had net tax operating
loss carryforwards of approximately $250,000 and business tax
credits of approximately $23,000 available to offset future
state income tax liabilities.
(H) Stockholders' Equity
Common Stock - On February 5, 2001, the Board of Directors
approved a reverse stock split at a rate of 2 shares converted
to 1 share. Written consents from stockholders holding
1,100,246 shares of Common Stock (approximately 52% of issued
and outstanding stock) were received on March 1, 2001 approving
the split. On the record date of February 21, 2001, there were
2,098,619 shares issued and outstanding. A SEC Schedule 14C
Information Statement was mailed on March 26, 2001 to
stockholders of record.
A hearing before a Nasdaq panel was held on March 23, 2001 in
Washington D.C. regarding the proposed delisting of the
Company's stock. A letter dated March 30, 2001 stated that the
panel determined to delist the Company's securities from the
Nasdaq Stock Market effective with the open of business
Monday, April 2, 2001. The Board of Directors voted on
April 2, 2001, to cancel the reverse stock split since the
purpose of the split was to prevent delisting.
Stock Options - 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 357,143
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 nine months ended February 28, 2001, the Company
granted 157,000 options to purchase shares of the Company's
common stock at an exercise price of $.875 to certain employees
of the Company, with one half vested immediately and the other
half vesting one year from the grant date. The options have a
term of five years.
(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
02/28/01 02/29/00 02/28/01 02/29/00
Basic Earnings (Loss) per Share:
Net income (loss) $ 19,855 $( 153,460) $( 151,752) $( 295,542)
Net income (loss)
applicable to
common shareholders $ 19,855 $( 153,460) $( 151,752) $( 295,542)
Weighted average
number of common
shares 2,098,619 2,018,262 2,098,619 2,047,809
Basic income (loss)
per share $ .01 $( .08) ( .07) $( .14)
Diluted Earnings (Loss) per Share:
Net income (loss)
from primary income
per common share $ 19,855 $( 153,460) $( 151,752) $( 295,542)
Net income (loss)
for diluted earnings
per share $ 19,855 $( 153,460) $( 151,752) $( 295,542)
Weighted average
number of shares
used in calculation
of diluted earnings
per share 2,098,619 2,018,262 2,098,619 2,047,809
Diluted earnings
(loss) per share $ .01 $( .08) $( .07) $( .14)
(J) Financial Information About Foreign and Domestic Operations
and Export Sales
FOR THE NINE MONTHS ENDED
02/28/01 02/29/00
Sales to unaffiliated customers:
United States $2,134,981 $2,383,087
Europe 1,373,921 996,214
South America 267,532 218,225
Other Foreign 453,070 433,597
$4,229,504 $4,031,123
No other geographic concentrations exist where net sales exceed
10% of total net sales.
Sales or transfers between geographic areas none none
Operating loss:
United States $(254,970) $(336,572)
Europe 77,400 ( 70,790)
South America 15,070 ( 15,507)
Other Foreign 25,524 ( 30,810)
$(136,976) $(453,679)
(K) New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities."
The statement will require recognition of all derivatives as
either assets or liabilities on the balance sheet at fair value.
The statement is effective for the Company's fiscal year 2002,
as deferred by SFAS No 137, but early adoption is permitted.
Management has completed an evaluation of the effects of this
statement and does not believe that it will have a material
effect on the Company's consolidated financial statements.
In December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition
in Financial Statements." The effective date of the bulletin
was delayed according to SAB No. 101A and SAB No. 101B and will
be effective for the Company's fourth quarter of fiscal year 2001.
Management has completed an evaluation of the effects of this
bulletin and does not believe that it will have a material effect
on the Company's consolidated financial statements.
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, 2001, net income
increased from a net loss of $295,542 at February 29, 2000, to a
net loss of $151,752 at February 28, 2001. For the three
months ended February 28, 2001, net income increased from a net
loss of $153,460 at February 29, 2000, to a net profit of
$19,855 at February 28, 2001. The increase is primarily
attributable to the increase in sales.
For the nine months ended February 28, 2001, net sales increased
$198,381 (4.9%) as compared to the year earlier period. For the
three months ended February 28, 2001, net sales increased
$140,761 (10.3%) as compared to the year earlier period.
International net sales increased $446,487 (27.1%) and $116,439
(18.0%), respectively, for the nine months and three months
ended February 28, 2001, as compared to the year earlier
period. The increase in sales was primarily in Europe.
Domestic net sales decreased $248,106 (10.4%) for the nine
months ended February 28, 2001, as compared to the year earlier
period. This decrease is primarily attributable to increased
discounting due to competition pressures. Domestic net sales
increased $24,322 (3.4%) for the three months ended February 28,
2001, as compared to the year earlier period. The increase is
primarily attributable to aggressive marketing techniques and
the introduction of new products.
For the nine months ended February 28, 2001, cost of sales as a
percentage of sales (65.3%), decreased 2.5% compared to the year
earlier period. For the three months ended February 28, 2001.
cost of sales as a percentage of sales (61.6%), decreased 8.9%
compared to the year earlier period. The decrease is primarily
attributable to decreased production costs.
For the nine months ended February 28, 2001, selling and general
and administrative expenses decreased $86,782 (5.4%) compared to
the year earlier period. The decrease is primarily attributable
to a decrease in labor costs and commissions. For the three
months ended February 28, 2001, selling and general and
administrative expenses increased $21,023 (4.0%) as compared to
the year earlier period. The increase is primarily attributable
to non-recurring sales labor costs due to termination of
personnel and an increase in sales commissions, partially offset
by a decrease in general and administrative labor costs.
For the nine months ended February 28, 2001, product development
expenses decreased $58,995 (42.6%) as compared to the year
earlier period. For the three months ended February 28, 2001,
product development expenses decreased $22,383 (69.9%) compared
to the year earlier period. The decrease is primarily
attributable to the discontinuance of dental amalgam development
and the reclassification of labor costs.
For the nine months ended February 28, 2001, interest expense
increased $2,096 (15.8%) as compared to the year earlier period.
For the three months ended February 28, 2001, interest expense
increased $406 (7.9%) as compared to the year earlier period.
The increase is primarily attributable to borrowings against the
line of credit and an increase in the interest rate.
For the nine months ended February 29, 1999, other income of
$169,672 was realized from the insurance claim settlement of
$279,672 for the theft of inventory at the Company's Mexicali
facility, less $110,000 insurance claim receivable valued at
cost at May 31, 1999.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
The Company's financial condition at February 28, 2001 and its
previous two fiscal year ends was as follows:
02/28/01 05/31/00 05/31/99
Current Assets $3,451,235 $3,395,922 $3,827,011
Current Liabilities 807,218 681,367 888,820
Working Capital 2,644,017 2,714,555 2,938,191
Bank Debt 180,000 160,000 180,000
Shareholder Equity 2,922,281 3,074,033 3,438,301
Total Assets 3,729,499 3,755,400 4,327,121
Cash increased $134,144 during the nine months ended
February 28, 2001.
Working capital decreased $70,538 during the nine months ended
February 28, 2001, primarily attributable to a decrease in
receivables and an increase in payables, partially offset by an
increase in inventories and cash. The Company expects to meet
its cash requirements out of its cash reserves, cash flow, and
line of credit.
The $300,000 line of credit is collateralized by substantially
all the assets of the Company, including inventories,
receivables, and equipment. The lending agreement for the line
of credit requires, among other things, that the Company
maintain a tangible net worth of $2,800,000 and a debt to
tangible net worth ration of no more than 1 to 1. The Company
is not required to maintain compensating balances in connection
with this lending agreement. The Company was in violation of
certain of its debt covenants at February 28, 2001. A waiver has
been requested but not yet received as of the date of filing.
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
On February 5, 2001, the Board of Directors approved a reverse
stock split at a rate of 2 shares converted to 1 share. Written
consents from stockholders holding 1,100,246 shares of Common
Stock (approximately 52% of issued and outstanding stock) were
received on March 1, 2001 approving the split. On the record
date of February 21, 2001, there were 2,098,619 shares issued
and outstanding. A SEC Schedule 14C Information Statement was
mailed on March 26, 2001 to stockholders of record.
A hearing before a Nasdaq panel was held on March 23, 2001 in
Washington D.C. regarding the proposed delisting of the
Company's stock. A letter dated March 30, 2001 stated that the
panel determined to delist the Company's securities from the
Nasdaq Stock Market effective with the open of business Monday,
April 2, 2001. The Board of Directors voted on April 2, 2001,
to cancel the reverse stock split since the purpose of the
split was to prevent delisting.
Item 5. OTHER INFORMATION Not Applicable
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 May 13, 2002 By /s/ Zackary Irani
Zackary Irani
Chief Executive Officer