UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB/A
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
[ _ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
----------------------------------------
LIFESTREAM TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
----------------------------------------
NEVADA 82-0487965
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
510 CLEARWATER LOOP, SUITE 101, POST FALLS, IDAHO 83854
(Address of principal executive offices)
(208) 457-9409
(Issuer's telephone number, including area code)
The number of shares outstanding of the registrant's common stock as of May 16,
2000 was 19,107,829.
Transitional Small Business Disclosure Format. Yes [ ] No [X]
LIFESTREAM TECHNOLOGIES, INC.
FORM 10-QSB/A
FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Restated)
Balance Sheets as of March 31, 2000 and June 30, 1999 3
Statements of Loss for the nine month periods ended 5
March 31, 2000 and 1999 and the three month periods
ended March 31, 2000 and 1999
Statements of Cash Flows for the nine month periods
ended March 31, 2000 and 1999 6
Notes to consolidated financial statements 7
Item 2. Management's Discussion and Analysis 11
PART II. OTHER INFORMATION 15
Item 2. Changes in Securities and Use of Proceeds
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 16
Exhibit Index 17
Part I. FINANCIAL INFORMATION Lifestream Technologies, Inc.
Item 1. Financial Statements Consolidated Balance Sheets
(Restated)
March 31, June 30,
2000 1999
- -----------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $1,729,008 $ 81,656
Accounts receivable 22,705 27,829
Inventories 503,242 235,418
Prepaid expenses 1,135 2,132
---------- ----------
Total current assets 2,256,090 347,035
---------- ----------
Equipment and leasehold improvements, net 406,147 412,033
---------- ----------
Other assets:
Patent and license rights, net 1,343,288 1,436,724
Note receivable, officer 20,831 25,531
Note receivable, related company -- 416,372
Purchased software technology, net 1,774,670 --
Deferred financing costs -- 8,181
Other 17,015 34,291
---------- ----------
Total other assets 3,155,804 1,921,099
---------- ----------
Total assets $5,818,041 $2,680,167
========== ==========
See accompanying notes to consolidated financial statements.
3
Lifestream Technologies, Inc.
Consolidated Balance Sheets
(Restated)
March 31, June 30,
2000 1999
- ----------------------------------------------------------------------------------------
(Unaudited)
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 198,347 $ 416,666
Accrued wages and payroll taxes 84,796 122,125
Interest payable and other liabilities 6,838 16,521
Current maturities of note payable 36,330 36,330
Current maturities of capital lease obligation 35,932 17,830
Convertible debt -- 250,000
------------ ------------
Total current liabilities 362,243 859,472
Capitalized lease obligation, less current maturities 26,871 47,146
Notes payable, less current maturities 78,714 105,962
Contingent stock liability -- 867,000
------------ ------------
Total liabilities 467,828 1,879,580
------------ ------------
Commitments and Contingencies
Stockholders' equity:
Common stock 19,074 12,188
Additional paid-in capital 17,529,113 9,780,003
Accumulated deficit (12,197,974) (8,991,604)
------------ ------------
Total stockholders' equity 5,350,213 800,587
------------ ------------
Total liabilities and stockholders' equity $ 5,818,041 $ 2,680,167
============ ============
See accompanying notes to consolidated financial statements.
4
Lifestream Technologies, Inc.
Consolidated Statements of Loss
(Restated)
Nine Months Ended Three Months Ended
March 31, March 31,
------------------------------ ------------------------------
2000 1999 2000 1999
- -------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudtied) (Unaudited) (Unaudited)
Revenues $ 115,366 $ 26,870 $ 34,311 $ 17,260
Cost of products sold 119,090 26,444 47,166 20,277
------------ ------------ ------------ ------------
Gross profit (3,724) 426 (12,855) (3,017)
------------ ------------ ------------ ------------
Operating Expenses:
Depreciation and amortization 655,441 221,016 259,616 69,199
Professional services 576,498 295,906 441,180 28,307
Research and product development 358,118 246,210 185,791 119,443
Sales and marketing 334,093 464,672 143,135 167,211
General and administrative 927,770 1,576,438 406,665 367,580
------------ ------------ ------------ ------------
Total operating expenses 2,851,920 2,804,242 1,436,387 751,740
------------ ------------ ------------ ------------
Loss from operations (2,855,644) (2,803,816) (1,449,242) (754,757)
Other income (expense), net 400,210 (131,170) 733,263 (67,604)
------------ ------------ ------------ ------------
Net loss $ (2,455,434) $ (2,934,986) $ (715,979) $ (822,361)
============ ============ ============ ============
Net loss per share - basic and diluted $ (0.16) (0.26) $ (0.04) $ (0.07)
============ ============ ============ ============
Weighted average number of shares
outstanding 15,401,059 11,178,973 17,957,124 11,211,000
============ ============ ============ ============
See accompanying notes to consolidated financial statements.
5
Lifestream Technologies, Inc.
Consolidated Statements of Cash Flows
(Restated)
Nine Months Ended
March 31,
-----------------------------
2000 1999
- --------------------------------------------------------------------------------
(Unaud (Unaudited)
Net cash used in operating activities $(2,104,040) $(2,035,284)
----------- -----------
Cash flows from investing activities:
Capital expenditures $ (132,911) (171,782)
Advance to related party -- (310,730)
Cash in business acquired 78 --
Advance to officer 867 (28,937)
----------- -----------
Net cash used in investing activities (131,966) (511,449)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of convertible debt 540,000 1,225,000
Proceeds from stock options exercised 30,482 14,495
Proceeds from sale of common stock 3,858,000 94,899
Payments on capital lease obligations (18,086) (755)
Payments on notes payable (527,038) (10,566)
----------- -----------
Net cash provided by financing activities 3,883,358 1,323,073
----------- -----------
Net increase in cash and cash equivalents 1,647,352 (1,223,660)
Cash and cash equivalents,
Beginning of period 81,656 1,601,227
----------- -----------
Cash and cash equivalents, end of period $ 1,729,008 $ 377,567
=========== ===========
Supplemental schedule of non-cash
investing and financing activities:
Issuance of common stock in exchange for:
Financing costs $ 428,748 $ 298,314
Business acquired $ 1,798,142 --
Conversion of debt $ 270,000 --
Reduction of accrued interest $ -- $ 20,590
Interest paid $ 23,880 $ 644
=========== ===========
See accompanying notes to consolidated financial statements.
6
Lifestream Technologies, Inc.
Notes to Consolidated Financial Statements
A. Basis of In the opinion of management, the accompanying
Presentation unaudited consolidated balance sheets and related
interim consolidated statements of loss and cash
flows include all adjustments (consisting only of
normal recurring accruals and adjustments)
necessary for their fair presentation in
conformity with generally accepted accounting
principles. Preparing financial statements
requires management to make estimates and
assumptions that affect the reported amount of
assets, liabilities, revenue and expenses.
Examples include provisions for returns and bad
debt and the length of product life cycles and
intangible asset's lives. Actual results may
differ from these estimates. Interim results are
not necessarily indicative of results for a full
year. The information included in this Form
10-QSB/A should be read in conjunction with
Management's Discussion and Analysis and the
consolidated financial statements and notes
thereto included in the Lifestream Technologies,
Inc. Form 10-KSB Transition Report for the six
month period ended June 30, 1999. The results of
operations from Secured Interactive Technologies,
Inc. ("Secured") have been included in the
consolidated financial results of the Company for
the three and nine months ended March 31, 2000.
B. Going Concern The Company has incurred operating losses since
inception and at March 31, has incurred an
unaudited year to date loss of $2,455,434. In
addition, the Company has limited revenues to date
and a product for which market acceptance remains
generally untested. Primarily as a result of these
factors, the Company's independent certified
public accountants included an explanatory
paragraph in their report on the Company's June
30, 1999 consolidated financial statements which
expressed substantial doubt about the Company's
ability to continue as a going concern. The
financial statements do not include any
adjustments that may be necessary if the Company
is unable to continue as a going concern.
Management of the Company has undertaken certain
actions to attempt to address these conditions.
These actions include seeking new sources of
capital or funding to allow the Company to
continue production and marketing of its products.
In February, 2000, the Company successfully
completed a $3,000,000 private placement offering
whereby the Company sold its unregistered common
stock to nine qualified investors. The receipt of
these funds continues to meet the Company's
anticipated short-term
7
cash needs. On February 28, 2000 the Company
commenced a private placement offering to qualified
investors of $3,000,000 in convertible debentures to
obtain the funds necessary to finance the business
until a sustaining product revenue stream can be
developed. As of May 10, 2000 the Company had raised
$200,000 pursuant to the February 28, 2000
convertible debentures. There can be no assurances
that the Company will be successful in completing
this private placement or in executing its plans.
C. Private Placement The Company commenced a $2,000,000 private offering
Common Stock in October 1999. The terms of this offering
Offering consisted of 2,000,000 shares of the Company's
common stock offered at $1.00 per share with
warrants to purchase 666,667 shares of the
Company's common stock at $2.50 per share. On
January 21, 2000 the Company increased this
offering by $1,000,000 with additional warrants to
purchase 333,333 shares of the Company's common
stock at $2.50 per share. The company closed this
offering to further investments on February 22,
2000 after receiving $3,558,000 under the terms of
the October 1999 offering.
The Company commenced a $3,000,000 private offering
on February 28, 2000. The terms of this offering
consisted of $3,000,000 principal amount of
convertible term notes and warrants to purchase
300,000 shares of the Company's common stock at
$2.00 per share. The notes may be converted into
shares of the Company's common stock at a conversion
price of $7.50 per share. The two year term notes
bear interest at 2% above the Prime Lending Rate. As
of May 16, 2000 the Company has raised $200,000
under the terms of this offering.
D. Convertible Debt As of fiscal year end June 30, 1999, the Company had
an outstanding advance from an investor, including
interest, of $270,000. This advance was repaid in
July 1999, with funds received pursuant to a
short-term advance from an investor and
significant shareholder of the Company. In
connection with this advance, the Company issued
25,000 shares of its common stock to the lender.
This short-term advance was then repaid during
July 1999, with proceeds received from three
separate convertible notes totaling $270,000. As
consideration for these convertible notes, the
Company issued the holders 54,000 shares of common
stock, which was recorded at fair value as a
financing cost during July 1999. On December 15,
1999, the $270,000 debt was converted into 540,000
shares of the Company's common stock. The Company
recorded a $270,000 financing cost associated with
this conversion as the conversion rate of $0.50
per share was below the fair value of the
Company's common stock.
8
E. Acquisition of On September 1, 1999 the Company completed the
Secured acquisition of Secured by effectuating a purchase
Interatctive transaction whereby the stockholders of Secured
Technologies, received one share of the Company's common stock
Inc. for each share of Secured common stock owned by
such stockholder. The Company issued a total of
1,944,000 shares of common stock to the
stockholders of Secured. Secured is the developer
of the PrivalinkTM System (patent pending), a
suite of secure Internet medical software and
information services for healthcare data
management of Personal Medical Records. Resulting
from the acquisition of Secured, the Company
recognized an intangible asset of $2,203,038 for
the purchased software technology, which is being
amortized to expense over a period of three years.
Total consideration paid to acquire Secured was
$1,798,142 and is based on the value of the common
stock of the Company.
The following unaudited pro forma consolidated
results of operations are presented as if the
Secured acquisition had been made as of the
beginning of each period presented. The pro forma
information is not necessarily indicative of
either the results of operations that would have
occurred had the purchase been made during the
periods presented or the expected future results
of the combined operations.
Nine Months Nine Months
Ended Ended
March 31, March 31,
2000 1999
-------------- --------------
Net loss $ (2,577,826) $ (3,804,351)
Net loss per share $ (0.17) (0.29)
F. Contract Roche Diagnostics, GmbH ("Roche") and Lifestream
Status with recently entered into contract negotiations
Roche concerning the License and Supply Agreement (the
Diagnostics, "Agreement") dated October 1, 1997. Roche
GmbH initiated the contract discussions in response to
the Company not meeting the required minimum
quantities of Cholesterol Test Strips and Test
Instrument Modules as prescribed in the original
Agreement. As of May 21, 2000 a revised Agreement
has not been executed, however both companies, in
principle, have agreed upon the terms of a revised
License and Supply Agreement. There can be no
assurances that a revised License and Supply
Agreement will be completed.
9
G. Inventories Inventories consist of supplies, component parts,
cholesterol test strips and assembled devices.
Inventories are stated at lower of cost (first-in,
first-out method) or market. At March 31, 2000,
inventories consist of the following;
Raw materials $ 164,000
Work-in-progress 315,488
Finished goods 23,754
---------
Total inventories $ 503,242
=========
H. Common Stock During 1999, in order to induce conversion,
Guarantee the Company guaranteed each converting noteholder
that the per share value of their shares would be
at least $3.50 per share on the one year
anniversary date of their conversion or the
Company would issue additional shares to achieve
that value. As a result of the share value
guarantee and based upon the market price of the
Company's common stock of $0.98 per share on June
30, 1999, the Company recorded an estimated
contingent stock liability of $867,000 and
recorded a corresponding financing expense. The
Company has recalculated this liability at the end
of each quarter and recorded the corresponding
change to financing expense. As of the end of the
third quarter, the Company has completely reversed
the $867,000 contingent stock liability as the
Company's common stock closed at $5 per share on
March 31, 2000.
I. Restatement of The acquisition of Secured had previously been
of Quarterly reported in the Company's fiscal 2000 interim
Results financial statements as a combination of entities
under common control in a manner similar to a
pooling of interests. During the fourth quarter of
fiscal 2000, it was determined that the
acquisition should be accounted for as a purchase
transaction. Therefore, the financial information
for the prior periods have been restated to
reflect the change in accounting treatment and the
impact of this change on previously reported
amounts for the current fiscal years interim
financial statements is as follows:
Nine Three
Months Months
Ended Ended
March 31, March 31,
1999 1999
------------ ------------
As previously reported:
Net Loss $ (2,027,066 ) $ (532,393 )
Net Loss Per Share $ (0.13 ) (0.03 )
As revised:
Net Loss $ (2,455,434 ) $ (715,979 )
Net Loss Per Share $ (0.16 ) $ (0.04 )
10
Item 2. Management's Discussion and Analysis
This Quarterly Report on Form 10-QSB, including the information incorporated by
reference herein, includes "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). All of the statements contained in this Quarterly Report on Form 10-QSB,
other than statements of historical fact, should be considered forward looking
statements, including, but not limited to, those concerning the Company's
strategies, objectives and plans for expansion of its operations, products and
services and growth in demand for the Lifestream Technologies(TM) Cholesterol
Monitor. There can be no assurance that these expectations will prove to have
been correct. Certain important factors that could cause actual results to
differ materially from the Company's expectations (the "Cautionary Statements")
are disclosed in this Quarterly Report on Form 10-QSB. All subsequent written
and oral forward looking statements by or attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by such
Cautionary Statements. Investors are cautioned not to place undue reliance on
these forward looking statements, which speak only as of the date hereof and are
not intended to give any assurance as to future results. The Company undertakes
no obligation to publicly release any revisions to these forward looking
statements to reflect events or reflect the occurrence of unanticipated events.
General
- -------
Lifestream Technologies, Inc. (the "Company" or "Lifestream"), is a Nevada
corporation, reorganized on February 11, 1994 and has as its current address 510
Clearwater Loop, Suite 101, Post Falls, ID 83854. The Company currently operates
through its two wholly owned subsidiaries, Lifestream Diagnostics, Inc.
("Lifestream Diagnostic") and Secured Interactive Technologies, Inc. (See
Acquisition of Secured Interactive Technologies, Inc.). On July 2, 1999 the
Company changed its fiscal year end from December 31 to June 30, beginning with
and effective for the transition period for the six months ended June 30, 1999.
Lifestream is a developer and provider of Internet Medical Information Solutions
through the use of "Smart Card" enabled health care diagnostic instruments to
domestic and international markets. Lifestream's initial product offering is the
Lifestream TechnologiesTM Cholesterol Monitor (the "cholesterol monitor"), a
hand held instrument that measures total cholesterol levels in the blood with
medical laboratory accuracy in approximately three minutes. It is used in
conjunction with a disposable dry-chemistry test strip.
On October 5, 1998, Lifestream's cholesterol instrument was granted marketing
clearance as a professional-use, point-of-care in vitro diagnostic device for
the measurement of total cholesterol in fingerstick whole blood samples by the
United States Food and Drug Administration ("FDA"). On February 24, 1999, the
Centers for Disease Control and Prevention ("CDC") granted a waiver from the
requirements of the Clinical Lab Improvement Amendments of 1988 ("CLIA") to the
Lifestream cholesterol monitor. The CLIA waiver is granted by the CDC to
products that meet strict ease-of-use, accuracy and precision guidelines. The
significance of the CLIA waiver is that it will allow Lifestream to market its
product to healthcare professionals in medical clinics, hospitals, pharmacies
and other settings without meeting extensive CDC regulatory requirements. On
December 20, 1999, Lifestream's PrivalinkTM software accessory that combines a
regulated medical device and patient information through the Internet using
industry-standard Smart Cards and high level encryption, received marketing
clearance from the FDA thereby allowing the Company to begin beta site testing
of the PrivalinkTM system in the professional healthcare setting.
Lifestream's professional-use cholesterol monitor measures total cholesterol
levels to aid in the detection of persons who may be at risk for coronary heart
disease and in the management of patients undergoing therapy with lipid lowering
drugs. Initially, the Company focused its marketing efforts on domestic and
international pharmacists offering on-site testing to their customers and to
pharmaceutical companies who sell cholesterol lowering drugs. There are
approximately 200,000 pharmacists in the United States, working in more than
52,000 pharmacies located in drug stores, food stores and mass merchants. Since
the identification of the pharmacy as a convenient place where consumers can
easily access healthcare, the pharmacy market has been identified by the Company
as a new market for cholesterol screening for adults in the United States.
The Company believes its inexpensive, quantitative and timely approach to
screening and monitoring high cholesterol will set the Lifestream cholesterol
monitor apart from competing devices. The Company expects competition from
several companies, including those using "single use" cholesterol test strips
for screening purposes and those using an instrument/strip for monitoring and
diagnostics.
11
Additionally, the Company believes the Lifestream cholesterol monitor offers
important educational features absent in many competing technologies. Using the
keypad, the user is able to enter risk factors associated with the patients
heart health. The monitor uses these factors to calculate the patient's risk of
a cardiac event over periods of five and ten years. By changing parameters, a
patient can learn how his or her "cardiac age" will improve by changing certain
habits, such as quitting smoking or beginning to exercise. The medical record
card ("Smart Card"), which holds up to 75 bytes of information, can be used in
conjunction with the monitor. The Smart Card contains a patient's cholesterol
readings and other risk factors downloaded from the Lifestream monitor. This
information can be transferred to the physician's office computer via the Smart
Card to provide a record detailing the total cholesterol test results for that
particular patient.
Once the PrivalinkTM system is fully developed, a healthcare professional will
be able to access Lifestream's secured Intranet. Using this program, the
healthcare professional will be able to merge the patient information with the
latest health research to create a "Personal Health Evaluation Program" for each
patient. This personalized program will be able to be printed and reviewed with
the patient by the healthcare professional and continually updated to provide a
state-of-the-art tool to monitor a patient's health and encourage behavioral
change
During the next six months, the Company plans to introduce a consumer
over-the-counter (OTC) product for personal monitoring of cholesterol-lowering
programs. To this end, the Company completed a three month clinical trial for
the Company's consumer instrument system, testing over 400 participants from a
wide range of population types using three widely separate testing sites in the
USA. After compiling the clinical data, the Company submitted, on February 21,
2000, to the US Food and Drug Administration (FDA) it's 510[k] Pre-Market
Notification for the consumer over-the-counter (the "OTC") cholesterol
monitoring system. The Company's consumer cholesterol monitor will be an
instrument-based, quantitative consumer use system, specifically designed for
total cholesterol level monitoring. The consumer monitor will use a Smart Card
for test result storage, allowing the meter to display dated test results and
deliver an average of the patients last six results. Additionally, the Smart
Card test data can be used in the Company's PrivalinkTM Internet system by the
healthcare professional.
The Company has incurred operating losses since inception and as of March 31,
2000, Lifestream had an accumulated deficit of approximately $12,197,974. The
ability of the Company to continue as a going concern and achieve profitability
is highly dependent upon numerous factors including, but not limited to: the
Company's ability to raise additional funds; successfully manufacture, market
and distribute the Lifestream cholesterol monitor; successfully complete the
continuing regulatory approval process; and provide a reliable product at a cost
efficient price. Primarily as a result of these factors, the Company's
independent certified public accountants included an explanatory paragraph in
their report on the Company's 1999 consolidated financial statements which
expressed substantial doubt about the Company's ability to continue as a going
concern. Since January 1, 2000, the Company has raised approximately $3,300,000
with further financial commitments totaling $200,000. As of May 10, 2000, the
Company has cash in the bank of approximately $1,525,000, which should meet the
anticipated financial requirements of the Company for the next four to six month
period.
12
The development and marketing of medical devices and related products is capital
intensive. The Company has funded operations to date through private equity and
debt financing arrangements. The Company has utilized these funds to develop
products, establish marketing and sales operations and support initial
production of the Company's products.
During the nine months ended March 31, 2000, the Company has obtained
approximately $4,575,000 in debt and equity financing. If the Company is unable
to obtain additional funding on a timely basis, there would be substantial doubt
about the Company's ability to continue as a going concern. Additionally,
substantial funding from third parties will also need to be raised in order to
successfully manufacture, market and distribute the Company's products over the
course of the twelve-month period ending March 31, 2001.
Results of Operations
- ---------------------
Revenues and Cost of Products Sold:
Revenues for the nine months ended March 31, 2000 increased $88,496 to $115,366
as compared to $26,870 for the same period in 1999. For the three months ended
March 31, 2000, revenues increased $17,051 to $34,311 from $17,260 in the same
period in 1999 primarily because the Company emerged out of the development
stage and commenced operations beginning in March 1999. The Company commenced
operations after receiving both FDA approval and CLIA waiver. The Company has
discounted its product prices to its initial customers which has reduced
revenues and contributed to the negligible gross margin. Cost of products sold
includes direct labor, direct material and overhead. Due to the limited
production for the period ended March 31, 2000, the Company has not been able to
take advantage of purchasing components with volume discounts or efficiently use
its production staff or facilities which increases the cost of its products. As
the Company ramps up its production efforts, the Company expects to reduce
product costs and efficiencies should be gained through economies of scale.
Operating Expenses:
Operating expenses include those costs incurred to bring the Company's product
to market relative to research and development, sales, marketing, and general
administration. Operating expenses increased to $2,851,920 for the nine months
ended March 31, 2000 from $2,804,242 for the same nine month period in 1999 and
for the three months ended March 31, 2000 operating expenses increased to
$1,436,387 from $751,740 for the same three month period in 1999. The increase
of $47,678 for the nine month period was primarily due to the Company
consolidating all company functions to the Post Falls facility and limiting
operations in an effort to reduce overall expenses offset by amortization of the
purchased software technology. The increase of $684,647 for the three month
period was primarily due to the Company ramping up operations due to the recent
completion of the $3,000,000 private placement offering. Specifically, for the
nine months ending March 31, 2000 professional expenses increased $280,592,
sales and marketing decreased $130,579 and general and administrative expenses
decreased $648,668.
13
Other Expenses and Income:
Other expenses and income includes those costs incurred relative to interest
earned, interest paid, financing costs, and for other miscellaneous
non-operating matters. For the nine month period ended March 31, 2000, other
expense, net was $400,210 as compared to $(131,170) for the same period ending
March 31, 1999. For the three month period ended March 31, 2000, other expense,
net was $733,263 as compared to $(67,604) for the same period in 1999. This
increase of $531,380 in other income (expense) was primarily attributable to an
accounting adjustment as the Company was able to reverse a contingent stock
liability of $867,000 associated with the Company's stock guarantee issued in
1999, see Note H, "Common Stock Guarantee", in the notes to consolidated
financial statements.
Net Loss:
Primarily as a result of the foregoing factors, the Company's net loss was
$2,455,434 and $715,979, respectively, for the nine and three month period ended
March 31, 2000 and $2,934,986 and $822,361, respectively, for the nine and three
months ended March 31, 1999. This represents a decrease in the loss for the nine
month period of $479,552 and a decrease in the loss for the three month period
of $106,382 for the same periods in 1999.
Financial Condition:
During the nine months ended March 31, 2000, the Company used cash in operating
activities of $2,104,040 as compared to $2,035,284 for the same period in 1999.
This increase of $68,756 was primarily due to the decrease in the net loss for
the period. During the six months ended December 31, 1999, the Company raised
cash in financing activities of $3,883,358 as compared to $1,323,073 for the
same period in 1999. This increase of $2,543,130 was primarily due to the
Company selling $3,858,000 of its common stock to qualified investors. The
Company partially used these proceeds to retire approximately $318,000 of
accounts payable and other current liabilities and to increase inventory by
$317,672 to $503,242 at March 31, 2000 from $185,570 at December 31, 1999. As of
March 31, 2000, the Company had a balance of $1,729,008 in cash and cash
equivalents. The Company has historically financed its operations through funds
raised through the offering of its common stock and issuance of debt securities.
As of May 16, 2000 the Company has raised an additional $200,000 under the terms
of February 28, 2000 private offering and has firm commitments of nearly
$250,000.
14
Part II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
1. In April 1998, the Company agreed to issue 2,000 shares of Common Stock
to each of the four directors elected to the Company's Board of
Directors as compensation for each month each serves as a director of
the Company. Pursuant to this agreement, 74,000 shares will be issued,
in the aggregate, to the directors with respect to the nine month
period ended March 31, 2000.
2. In February 2000, the Company issued 3,340,000 shares of Common Stock
to twelve investors pursuant to the Company's $3,000,000 Private
Placement Offering (Amended) commencing in October 1999.
3. In January 2000, the Company issued 50,000 shares of Common Stock to
Gruntal, LLC, the Company's investment banker, per the January 2000
agreement. The Company issued 5,000 shares of Common Stock to an
individual in connection with the Common Stock issued to Gruntal, LLC.
4. From January 1, 2000 through March 31, 2000, 38,737 options were
exercised by five individuals at prices ranging from $.20 to $1.25 per
share.
The Company relied on Section 4(2) of the 1933 Act as the basis for an
exemption from the registration requirements of the 1933 Act for the issuance of
these shares.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibit Index
b. Reports of Form 8-K
15
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LIFESTREAM TECHNOLOGIES, INC.
(Registrant)
BY: /s/ Christopher Maus
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Christopher Maus, Chairman, President and Chief Executive Officer
DATE: September 28, 2000
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BY: /s/ Brett Sweezy
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Brett Sweezy, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
DATE: September 28, 2000
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16
EXHIBIT INDEX
Exhibit No.
27 Financial Data Schedule
17