Filed Pursuant to Rule 424(b)(3)
Registration No. 333-68890
L.A.M. PHARMACEUTICAL CORP.
Prospectus Supplement
(To Prospectus Dated June 10, 2002)
Prospective investors should read this prospectus supplement and the
related prospectus carefully before investing in L.A.M.'s common stock. Both
documents contain information prospective investors should consider when making
an investment decision.
This prospectus supplement relates to the resale of shares of L.A.M.'s
common stock by a number of L.A.M.'s shareholders.
L.A.M.'s common stock is quoted on the OTC Bulletin Board under the symbol
"LAMP". On January 23, 2003 the closing price for one share of L.A.M.'s common
stock was $0.29.
The date of this prospectus supplement is January 24, 2003.
Recent Developments
Convertible Notes and Warrants
In November 2002, L.A.M. sold convertible notes, plus Series A, B, C and D
warrants, to a group of private investors for $700,000. The notes do not bear
interest, are unsecured and are payable on November 1, 2005.
At the holder's option the notes are convertible into shares of L.A.M.'s
common stock equal in number to the amount determined by dividing each $1,000 of
note principal to be converted by the Conversion Price. The initial Conversion
Price is $0.29.
If L.A.M. sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable Conversion
Price, the Conversion Price will be lowered to the price at which the shares
were sold or the lowest price at which the securities are convertible, as the
case may be.
Each note holder is prohibited from converting the notes to the extent
that such conversion would result in such holder, together with any affiliate of
the holder, beneficially owning in excess of 4.999% of the outstanding shares of
L.A.M.'s common stock following such conversion. This restriction may be waived
by each holder on not less than 61 days' notice to L.A.M. However, the 4.999%
limitation would not prevent each note holder from acquiring and selling in
excess of 4.999% of L.A.M.'s common stock through a series of acquisitions and
sales so long as the holder never beneficially owns more than 4.999% of L.A.M.'s
common stock at any one time.
Until June 16, 2003 the note holders will have a first right of refusal to
participate in any subsequent financings involving L.A.M.
Upon the occurrence of any of the following events L.A.M. is required to
redeem the notes at a price equal to 120% of then outstanding principal balance
of the notes:
- the suspension from listing or the failure of L.A.M.'s common stock
to be listed on the OTC Bulletin Board for a period of five
consecutive trading days; or
- the effectiveness of the registration statement lapses for any reason
or the registration statement is unavailable to the note holders and
the lapse or unavailability continues for a period of fifteen
consecutive trading days, or 25 non-consecutive trading days during
any twelve month period, provided the cause of the lapse or
unavailability is not due to factors primarily within the control of
the note holders.
- any representation or warranty made by L.A.M. to the note holders
proves to be materially inaccurate or L.A.M. fails to perform any
material covenant or condition in its agreement with the note
holders.
- a purchase, tender or exchange offer accepted by the holders of more
than 33% of L.A.M.'s outstanding shares of common stock.
- L.A.M. files for protection from its creditors under the federal
bankruptcy code.
The Series A warrants allow the holders to purchase 624,590 shares of
L.A.M.'s common stock at a price of $0.35 per share at any time prior to
November 1, 2007.
If L.A.M. sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable exercise
price of the Series A warrants, the exercise price of the Series A warrants will
be lowered to the price at which the shares were sold or the lowest price at
which the securities are convertible, as the case may be.
The Series B warrants allow the holders to purchase 1,312,500 shares of
L.A.M.'s common stock at a price of $0.80 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten consecutive
days that the closing bid price of L.A.M.'s common stock has exceeded $1.20,
L.A.M. has the right, upon 15 days advance written notice to the holders of the
Series B warrants, to force the holders to exercise the unexercised portion of
the Series B warrants.
The Series C warrants allow the holders to purchase 875,000 shares of
L.A.M.'s common stock at a price of $1.20 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten consecutive
days that the closing bid price of L.A.M.'s common stock has exceeded $2.00,
L.A.M. has the right, upon 15 days advance written notice to the holders of the
Series C warrants, to force the holders to exercise the unexercised portion of
the Series C warrants.
The Series D warrants allow the holders to purchase 656,250 shares of
L.A.M.'s common stock at a price of $1.60 per share at any time prior to
November 1, 2007. Within two days after the end of any period of ten consecutive
days that the closing bid price of L.A.M.'s common stock has exceeded $2.50,
L.A.M. has the right, upon 15 days advance written notice to the holders of the
Series D warrants, to force the holders to exercise the unexercised portion of
the Series D warrants.
L.A.M.'s right to force the warrant holders to exercise the Series, B, C
and D warrants is subject to a number of conditions, including the following:
- there is in effect a registration statement which the holders may use
to sell the shares issuable upon the exercise of the warrants.
- L.A.M.'s common stock is listed for trading on the OTC Bulletin Board
The exercise price of the Series B, C and D warrants is not subject to
adjustment except in the case of stock splits, consolidations and similar
transactions.
Each warrant holder is prohibited from exercising the warrants to the
extent that such exercise would result in such holder, together with any
affiliate of the warrant holder, beneficially owning in excess of 4.999% of the
outstanding shares of L.A.M.'s common stock following such exercise. This
restriction may be waived by each holder on not less than 61 days' notice to
L.A.M. However, the 4.999% limitation would not prevent each warrant holder from
acquiring and selling in excess of 4.999% of L.A.M.'s common stock through a
series of acquisitions and sales under the warrants so long as the warrant
holder never beneficially owns more than 4.999% of L.A.M.'s common stock at any
one time.
L.A.M. has filed a registration statement with the Securities and
Exchange Commission so that the shares of common stock issued upon the
conversion of the notes or the exercise of the Series A, B, C and D warrants may
be resold in the public market.
Management Changes
On September 30, 2002 Alan Drizen resigned as L.A.M.'s Chief Executive
Officer. Joseph Slechta, L.A.M.'s President, was appointed L.A.M.'s Chief
Executive Officer by the Board of Directors on the same date. Mr. Drizen remains
a director of the Company.
Summary Financial Data:
Results of Operations:
Income Statement Data: Nine Months Ended Year Ended
September 30, 2002 December 31, 2001
Sales $ 22,165 $ --
Licensing Revenue -- 300,000
Operating Expenses 2,340,975 (2,293,299)
Financial Accounting Expenses 2,407,432 (6,450,673)
Interest Income -- 45,212
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Net Loss $(4,726,242) $(8,398,760)
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Balance Sheet Data:
September 30, 2002 December 31, 2001
Current Assets $ 620,030 $158,811
Total Assets 1,341,636 769,318
Current Liabilities 714,461 601,999
Total Liabilities 1,085,858 1,657,396
Working Capital (Deficiency) (94,431) (443,188)
Stockholders' Equity (Deficit) 255,778 (888,078)