SCHNEIDER WEINBERGER & BEILLY LLP
Attorneys-at-Law
2200 Corporate Boulevard, N.W., Suite 210
Boca Raton, Florida 33431-7307
Telephone
James M. Schneider, P.A. (561) 362-9595
Steven I. Weinberger, P.A. Facsimile
Roxanne K. Beilly, P.A. (561) 362-9612
May 05, 2005
VIA EDGAR
United States Securities and Exchange
Commission
450 Fifth Street, NW
Washington, D.C. 20549
Att: Pamela Long, Assistant Director
RE: LIFESTREAM TECHNOLOGIES, INC.
AMENDMENT NO. 2 TO FORM SB-2 FILED APRIL 12, 2005
FILE NO. 333-121991
Gentlemen:
We are counsel to Lifestream Technologies, Inc. Reference is made to
amendment no. 2 to the registration statement on Form SB-2 filed by Lifestream
Technologies, Inc. (the "Company") on April 12, 2005 (the "Registration
Statement"), and the Staff's comments under cover of its letter dated April 19,
2005.
Concurrently with the filing of this letter, the Company has filed
amendment no. 3 to the Registration Statement ("Amendment No. 3"). Amendment No.
3 includes updated disclosure, including in response to the Staff's comments.
The following numbered responses correspond to the Staff's numbered comments in
its April 19, 2005 letter.
In response to the Staff's comments, we have been requested to advise
you as follows:
FORM SB-2
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Consumer Marketplace - Page 12
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1. The prospectus has been revised to clarify that the Company's
product:
|X| Does not measure the individual components of a complete lipoprotein
profile [i.e., LDL (bad), HDL (good) and triglycerides];
United States Securities and
Exchange Commission
May 05, 2005
Page 2 of 3
|X| Is not intended as a substitute for NCEP recommended regular (every
five years) and periodic testing of the individual components of a
complete lipoprotein profile by a physician;
|X| Measures total cholesterol levels, which the NCEP states is a good
indicator of LDL (bad) cholesterol levels based on studies performed
(see page 24 of the pdf file of the "Third Report of the National
Cholesterol Education Program (NCEP) Expert Panel on Detection,
Evaluation, and Treatment of High Blood Cholesterol in Adults (Adult
Treatment Panel III, or ATP III))" at
www.nhlbi.nih.gove/guidelines/cholesterol/atp3_rpt.htm;
|X| Assists in self-monitoring of cholesterol levels, as recommended by
the NCEP, which has been proven to increase adherence to one's
cholesterol lowering program (see page 222 of the pdf file).
We note that the NCEP does not clarify or make a recommendation as to
whether self-monitoring should be based on total cholesterol levels or LDL
levels.
FINANCIAL STATEMENTS - PAGE F-1
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Notes to Financial Statements Page F-29
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Condensed Consolidated Balance Sheets
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2. The Company incorrectly classified its original issue discount as an
asset rather than as a contra liability. The Company reviewed the materiality of
this misclassification on the consolidated financial statements based on both
the quantitative and qualitative factors, including those, including but not
limited to the qualitative factors included in Staff Accounting Bulletin No. 99.
With regard to the quantitative factors, the Company would like to
clarify that not all of the deferred financing costs included on the balance
sheet are related to original issue discount. The original issue discount is
approximately $507,000 as of December 31, 2004, which represents 13% of total
assets. The misclassification has no affect on the consolidated statement of
operations.
The Company then analyzed the qualitative factors of the misstatement
and noted that the misstatement:
|X| Does not mask any earnings trends
|X| Does not hide a failure to meet analyst estimates
|X| Does not change earnings per share or cause a net income to change to
a net loss
|X| Does not affect compliance with any loan covenants (the Company does
not have any loan covenants)
|X| Does not change working capital or current ratios
United States Securities and
Exchange Commission
May 05, 2005
Page 3 of 3
|X| Does not affect management compensation
|X| Was not an intentional misstatement
Finally, the Company does not believe the misstatement would cause a
positive or negative market reaction, as it does not believe a reasonable person
would view the intangible asset as a valuable asset. The asset is to be
amortized to expense regardless of its classification on the balance sheet.
Based on the combination of both the quantitative and qualitative
factors above, the Company does not believe that the effect of the misstatement
on the financial statements taken as a whole would have changed or influenced
the judgment of a reasonable person relying on the financial statements and is
therefore not deemed to be material by the Company. The Company has corrected
the misstatement in its fiscal 2005 third quarter 10-QSB, which it plans to
timely file on or before May 16, 2005.
OTHER MATTERS
Amendment No. 3 also includes revisions to reflect the departure of
Nikki Nessan as the Company's Vice President - Finance and the appointment of
Matt Colbert to replace Ms. Nessan as Vice President - Finance and as Interim
Chief Financial Officer.
An updated and manually signed consent of the Company's independent
registered public accounting firm has been filed with Amendment No. 3.
If you have any further questions or comments, please contact us.
Very truly yours,
SCHNEIDER WEINBERGER & BEILLY LLP
By: /s/ Steven I. Weinberger
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Steven I. Weinberger