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 August 31, 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 the latest practicable date:
2,196,233
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)
8/31/02
ASSETS
CURRENT ASSETS:
Cash $ 208,428
Accounts receivable, less allowances for sales
returns and doubtful receivables of $181,136 1,040,222
Inventories, net of reserve of $203,608 2,019,779
Prepaid expenses 49,231
Total current assets 3,317,660
PROPERTY AND EQUIPMENT, at cost 2,412,486
Less: Accumulated depreciation (2,368,554)
43,932
INTANGIBLE ASSETS:
Marketing and distribution rights, net 53,950
Technology use rights, net 16,207
70,157
OTHER ASSETS 35,546
Total assets $3,467,295
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 280,103
Accrued payroll and related benefits 108,845
Other current liabilities 62,840
Line of credit 1,208
Total current liabilities 452,996
Mandatorily redeemable convertible preferred stock
Series C, $.06 noncumulative annual dividend, $.75
par value, 250,000 shares authorized; 0 shares issued
and outstanding in 2001($.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 per share) --
Common stock, no par value: authorized 50,000,000
shares; issued and outstanding 2,196,233 4,844,345
Prepaid expense ( 7,000)
Accumulated deficit (1,823,046)
Total stockholders' equity 3,014,299
Total liabilities and stockholders' equity $3,467,295
LANCER ORTHODONTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS AND
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
FOR THE THREE MONTHS ENDED
8/31/02 8/31/01
NET SALES $1,285,499 $1,434,788
COST OF SALES 923,580 1,077,398
Gross Profit 361,919 357,390
OPERATING EXPENSES:
Selling 282,101 377,447
General & Administrative 110,263 105,818
Product Development 15,186 --
TOTAL OPERATING EXPENSES 407,550 483,265
LOSS FROM OPERATIONS ( 45,631) ( 125,875)
OTHER INCOME (EXPENSE):
Interest Expense ( 3,572) ( 3,222)
Other Income (Expense), net 46,272 760
TOTAL OTHER INCOME (EXPENSE) 42,700 ( 2,462)
LOSS BEFORE INCOME TAXES ( 2,931) ( 128,337)
INCOME TAXES -- --
NET LOSS ( 2,931) ( 128,337)
OTHER COMPREHENSIVE INCOME -- --
COMPREHENSIVE LOSS $( 2,931) $( 128,337)
NET LOSS PER WEIGHTED AVERAGE OF COMMON SHARES
Weighted average number of common shares 2,196,233 2,098,620
BASIC $( .00) $( .06)
Weighted average number of shares used
in calculation of diluted earnings
per share 2,196,233 2,098,620
DILUTED $( .00) $( .06)
LANCER ORTHODONTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
8/31/02 8/31/01
Cash flows from operating activities:
Net loss $( 2,931) $(128,337)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities:
Depreciation and amortization 24,117 26,856
Provision for losses on accounts
Receivable 1,136 ( 2,059)
Provision for losses on inventory 15,000 9,000
Common stock issued for services 5,250 --
Net change in operating assets and liabilities:
Accounts receivable 80,577 ( 56,726)
Inventories 52,980 (150,427)
Prepaid expenses 5,044 24,244
Insurance claim receivable 81,758 --
Accounts payable (139,250) 263,750
Accrued payroll 13,852 ( 23,954)
Other current liabilities 8,835 6,108
Net cash provided by (used in)
operating activities 146,368 ( 31,545)
Cash flows from investing activities:
Purchases of property and equipment ( 2,064) --
Other assets -- ( 7,786)
Net cash used in investing activities ( 2,064) ( 7,786)
Cash flows from financing activities:
Increase (decrease) in line of credit ( 64,461) 20,000
Cash flows provided by (used in)
financing activities ( 64,461) 20,000
Net change in cash 79,843 ( 19,331)
Cash, beginning of period 128,585 131,550
Cash, end of period $208,428 $112,219
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 3,572 $ 3,222
The Company issued 20,000 shares of
common stock valued at $7,000 for
services to be rendered $ 7,000 $ --
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.
Reference is made to Note 2 of the Notes to Financial Statements
contained in the Company's Annual Report on Form 10-KSB for the
fiscal year ended May 31, 2002, for a summary of significant
accounting policies utilized by the Company.
(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 facility is
incorporated and is a wholly-owned and consolidated subsidiary
of the Company. This subsidiary now also administers services
previously provided by an independent manufacturing contractor.
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 August 31, 2002, the Company has a $400,000 line of credit
with a financial institution, through October 24, 2003.
Borrowings are made at prime plus 2.0%, however not less than
8.0%, (8.0% at August 31, 2002) and are limited to specified
percentages of eligible accounts receivable. The outstanding
balance at August 31, 2002 was $1,208 and the unused portion
available was approximately $312,000. The Company was in
compliance with its debt covenants at August 31, 2002.
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 $2,100,000 and that receivables payments
be sent to a controlled lockbox. In addition to interest, a
management fee of 0.25% 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
In May 1990, Lancer entered into a manufacturing subcontractor
agreement whereby the subcontractor agreed to provide
manufacturing services to Lancer through its affiliated entities
located in Mexicali, B.C., Mexico. Effective April 1, 1996,
Lancer leased the Mexicali facility under a separate agreement.
Since October 2000, the manufacturing agreement was operated on
a month to month basis.
During fiscal 2002, the facility in Mexico was incorporated as
Lancer Orthodontics de Mexico, ("Lancer de Mexico"), a wholly-
owned and consolidated subsidiary of the Company. This
subsidiary now administers services previously provided by an
independent manufacturing contractor. A new lease was negotiated
in the name of Lancer de Mexico, effective April 1, 2001, for the
16,000 square foot facility already in use for the Mexican
operations. Mexican utilities and vendor obligations were also
converted to the Lancer de Mexico name. This conversion
eliminated the expense of an administrative fee and is expected
to provide better control in meeting future obligations. Should
Lancer discontinue operations in Mexico, it is responsible for
accumulated employee seniority obligations as prescribed by
Mexican law. At August 31, 2002, this obligation was
approximately $246,000. Such obligation is contingent in nature
and accordingly has not been accrued in Lancer's financial
statements.
Leases - The Company leases its corporate 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 $7,951 at August 31, 2002, and is
included in accrued liabilities in the accompanying balance
sheet. Total rental expense for this facility for the three
months ended August 31, 2002 was approximately $17,000.
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 three months ended August 31, 2002
was approximately $18,000.
At May 31, 2002, future aggregate minimum lease payments are as
follows:
Years ending May 31,
2003 $144,545
2004 114,659
2005 70,440
2006 58,700
Total $388,344
Common Stock - The Company's stock is now traded on the OTC
Bulletin Board.
(G) Income Taxes
At May 31, 2002, the Company had net tax operating loss
carryforwards of approximately $2,037,000 and business tax
credits of approximately $80,000 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, 2002, the Company had net tax operating
loss carryforwards of approximately $185,000 and business tax
credits of approximately $24,000 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 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 quarter ended August 31, 2002, 35,000 shares of common
stock valued at $12,250 were issued to the Company's Chief
Executive Officer for certain management services.
The Company issued non-qualified options granted to the Chief
Executive Officer to purchase 113,000 shares of Common Stock at
$.30. These options were granted on December 1, 2001 and are
exercisable at the rate of one-third per year and 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 MONTHS ENDED
8/31/02 8/31/01
Basic Loss per Share:
Net loss $( 2,931) $( 128,337)
Net loss applicable to common
Shareholders $( 2,931) $( 128,337)
Weighted average number of common shares 2,196,233 2,098,620
Basic loss per Share $( .00) $( .06)
Diluted Loss per Share:
Net loss from primary income per
common share $( 2,931) $( 128,337)
Net loss for diluted earnings per share $( 2,931) $( 128,337)
Weighted average number of shares used in
calculation of diluted earnings per share 2,196,233 2,098,620
Diluted loss per share $( .00) $( .06)
The computation of diluted loss per share excludes the effect of
incremental common shares attributable to the exercise or
outstanding common stock options and warrants because their
effect was anti-dilutive due to losses incurred by the Company.
As of August 31, 2002, there was a total of 344,000 potential
dilutive shares of common stock.
(J) Financial Information About Foreign and Domestic Operations
and Export Sales
FOR THE THREE MONTHS ENDED
8/31/02 8/31/01
Sales to unaffiliated customers:
United States $ 754,597 $ 742,271
Europe 288,435 439,879
Central and South America 59,240 91,889
Middle East 72,163 48,372
Other Foreign 111,064 112,377
$1,285,499 $1,434,788
No other geographic concentrations exist where net sales
exceed 10% of total net sales.
Sales or transfers between geographic areas none none
(K) Insurance Claim Receivable
Management of the Company completed an assessment of two
occurrences of theft of inventory located at its wholly-owned and
consolidated subsidiary, Lancer de Mexico, in January and April
of 2002. The carrying value of the inventory stolen approximated
$81,758, valued at standard cost, which was reflected in the
May 31, 2002 financial statements as a reduction in inventories
and an addition to insurance claim receivable. During the three
months ended August 31, 2002, the Company received $134,413 from
the insurance carrier; the estimated value of the stolen
inventory at net average selling price, less commissions and
royalties. The Company recorded other income of $52,655 from the
proceeds received in excess of standard cost.
(L) Recent 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 adoption of SFAS 142 did not have a material
impact on the Company's financial position or results of
operations.
In August 2001, the FASB issued FAS No. 143, "Accounting for
Asset Retirement Obligations." This statement addresses
financial accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the
associated asset retirement costs. It applies to all entities
and legal obligations associated with the retirement of long-
lived assets that result from the acquisition, construction,
development and/or normal operation of long-lived assets, except
for certain obligations of lessees. This statement amends FAS
No. 19, "Financial Accounting and Reporting by Oil and Gas
Producing Company," and is effective for financial statements
issued for fiscal years beginning after June 15, 2002.
Management has not yet determined the impact of the adoption of
FAS No. 143 on the Company's financial position or results of
operations.
In October 2001, the FASB issued FASB Statement No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets,"
or SFAS 144. SFAS No. 144 requires that those long-lived assets
be measured at the lower of carrying amount or fair value less
cost to sell, whether reported in continuing operations or in
discontinued operations. Therefore, discontinued operations
will no longer be measured at net realizable value or include
amounts for operating losses that have not yet occurred. SFAS
No. 144 is effective for financial statements issued for fiscal
years beginning after December 15, 2001 and, generally, is to be
applied prospectively. The adoption of SFAS 144 did not have a
material impact on the Company's financial position or results of
operations.
In April 2002, the Financial Accounting Standards Board ("FASB")
issued FASB Statement No. 145, "Rescission of FASB Statements No.
44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections," to update, clarify and simplify existing accounting
pronouncements. FASB Statement No. 4, which required all gains
and losses from debt extinguishment to be aggregated and, if
material, classified as an extraordinary item, net of related tax
effect, was rescinded. Consequently, FASB Statement No. 64,
which amended FASB Statement No. 4, was rescinded because it was
no longer necessary. The adoption of SFAS 145 did not have a
material impact on the Company's financial position or results of
operations.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS 146 addresses
accounting and reporting for costs associated with exit or
disposal activities and nullifies Emerging Issues Task Force
Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity
(Including Certain Costs Incurred in a Restructuring)." SFAS No.
146 requires that a liability for a cost associated with a exit
or disposal activity be recognized and measured initially at fair
value when the liability is incurred. SFAS No. 146 is effective
for exit or disposal activities that are initiated after December
31, 2002, with early application encouraged. We do not expect
the adoption of this statement to have a material effect on our
financial statements.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. Certain
information contained herein (as well as information included in
oral statements or other written statements made or to be made
by Lancer Orthodontics) contains statements that are forward-
looking, such as statements relating to anticipated future
revenues of the Company and success or current product offerings.
Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results
in the future, and accordingly, such results may differ
materially from those expressed in any forward-looking statements
made by or on behalf of Lancer Orthodontics. The potential risks
and uncertainties include, among others, fluctuations in the
company's operating results. These risks and uncertainties also
include the success of the Company in raising needed capital, the
continual demand for the Company's products, competitive and
economic factors of the marketplace, availability of raw
materials, health care regulations and the state of the economy.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof, and the Company undertakes no obligation to update these
forward-looking statements.
RESULTS OF OPERATIONS
For the three months ended August 31, 2002, net loss decreased
$125,406 as compared to the three months ended August 31, 2001.
The decrease in net loss is primarily attributable to higher
gross margins, lower selling expenses, and other income from
insurance proceeds.
For the three months ended August 31, 2002, net sales decreased
$149,289 (10.4%) as compared to the three months ended August 31,
2001. International net sales decreased $161,615, primarily in
Europe. Domestic net sales increased $12,326.
For the three months ended August 31, 2002, cost of sales as a
percentage of sales totaled 71.9%, a decrease of 3.2% as compared
to the three months ended August 31, 2001, which totaled 75.1%.
This decrease is attributable to a reduction in scrap and other
manufacturing efficiencies.
For the three months ended August 31, 2002, selling expenses
decreased $95,346 (25.3%) as compared to the three months ended
August 31, 2001. The decrease is primarily attributable to a
decrease in labor and travel costs.
For the three months ended August 31, 2002, general and adminis-
trative expenses increased $4,445 (4.2%) as compared to the three
months ended August 31, 2001. The increase is primarily
attributable to an increase in labor and insurance costs.
For the three months ended August 31, 2002, product development
expenses increased $15,186 from no expense in the three months
ended August 31, 2001. The increase is attributable to the
resumption of product development.
For the three months ended August 31, 2002, interest expense
increased $350 (10.9%) as compared to the three months ended
August 31, 2001. The increase is primarily attributable to
the method of computing interest by the financing company using
"float" days.
For the three months ended August 31, 2002, other income of
$52,655 was realized from the insurance claim settlement of
$134,413 for the theft of inventory at the Company's Mexicali
facility, less $81,758 insurance claim receivable valued at cost.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
The Company's financial condition at August 31, 2002 and its
previous two fiscal year ends was as follows:
08/31/02 05/31/02 05/31/01
Current Assets $3,317,660 $3,474,312 $3,476,962
Current Liabilities 452,996 634,021 779,462
Working Capital 2,864,664 2,840,291 2,697,500
Line of Credit 1,208 65,669 140,000
Shareholder Equity 3,014,299 3,011,979 2,957,174
Total Assets 3,467,295 3,646,000 3,736,636
Cash increased $79,843 during the three months ended
August 31, 2002.
Working capital increased $24,373 during the three months ended
August 31, 2002, primarily attributable to a decrease in accounts
payable. The Company expects to meet all of its cash
requirements for the foreseeable future out of its cash reserves,
cash flow, and line of credit.
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.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
A discussion of the Company's exposure to, and management
of, market risk appears in Item 2 of this Form 10-Q under the
heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
Item 4. PROCEDURES AND CONTROLS
Within the 90 days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the
participation of the Company's management, including the
Company's Chief Executive Officer and Director of Financial
Planning, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14. Based upon that evaluation, the Chief
Executive Officer and Director of Financial Planning concluded
that the Company's disclosure controls and procedures are
effective. There were no significant changes in the Company's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.
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
Not Applicable
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.
Exhibits
99.1 Certifications of Chief Executive Officer and
Director of Financial Planning pursuant to 18
U.S. Section 135D is adopted pursuant to Section
302 and 906 of the Sarbanes-Oxley Act of 2002.
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 October 15, 2002 By /s/ Zackary Irani
Zackary Irani,
Chief Executive Officer