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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
[ _ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
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LIFESTREAM TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
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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)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or 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 [ _ ]
The number of shares outstanding of the registrant's common stock as of November
10, 1999 was 14,706,161.
Transitional Small Business Disclosure Format. Yes [ ] No [X]
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LIFESTREAM TECHNOLOGIES, INC.
FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
INDEX
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PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Balance Sheets as of September 30, 1999 and June 30, 1999 2
Statements of Loss for the three month periods ended
September 30, 1999 and 1998 4
Statements of Cash Flows for the three month periods ended
September 30, 1999 and 1998 5
Notes to consolidated financial statements 6
Item 2. Management's Discussion and Analysis 8
PART II. OTHER INFORMATION 14
Item 2. Changes in Securities and Use of Proceeds
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 15
Exhibit Index 16
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1
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Part I. FINANCIAL INFORMATION LIFESTREAM TECHNOLOGIES, INC.
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, June 30,
1999 1999
- ---------------------------------------------------------------------------------------------
(Unaudited) (Restated)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 113,615 $ 81,734
Accounts receivable 32,280 27,829
Inventories 210,041 235,418
Prepaid expenses 2,132 2,132
- ---------------------------------------------------------------------------------------------
Total current assets 358,068 347,113
- ---------------------------------------------------------------------------------------------
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net 408,003 452,708
- ---------------------------------------------------------------------------------------------
OTHER ASSETS:
Patent and license rights, net 1,405,633 1,436,724
Note receivable, officer 25,917 25,531
Deferred financing costs -- 8,181
Other 21,050 34,291
- ---------------------------------------------------------------------------------------------
Total other assets 1,452,600 1,504,727
- ---------------------------------------------------------------------------------------------
TOTAL ASSETS $2,218,671 $2,304,548
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</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
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<CAPTION>
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LIFESTREAM TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, June 30,
1999 1999
- -----------------------------------------------------------------------------------------------------------
(Unaudited) (Restated)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 430,409 $ 424,123
Accrued wages and payroll taxes 125,131 122,125
Interest payable 0 16,521
Current maturities of note payable 36,330 36,330
Current maturities of capital lease obligation 43,079 39,650
Convertible debt 270,000 250,000
- -----------------------------------------------------------------------------------------------------------
Total current liabilities 904,949 888,749
- -----------------------------------------------------------------------------------------------------------
Capitalized lease obligation, less current maturities 39,100 47,146
Notes payable, less current maturities 96,878 105,962
Contingent stock liability 860,000 867,000
- -----------------------------------------------------------------------------------------------------------
Total liabilities 1,900,927 1,908,857
- -----------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 14,706 14,132
Additional paid-in capital 10,742,013 10,124,099
Accumulated deficit (10,438,975) (9,742,540)
- -----------------------------------------------------------------------------------------------------------
Total stockholders' equity 317,744 395,691
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,218,671 $ 2,304,548
===========================================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
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LIFESTREAM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF LOSS
Three Months Ended
September 30,
-------------------------------------
1999 1998
- --------------------------------------------------------------------------------------------------------
(Unaudited) (Restated)
(Unaudited)
Revenues $ 49,976 $ --
Cost of products sold 41,472 --
- --------------------------------------------------------------------------------------------------------
Gross profit 8,504 --
- --------------------------------------------------------------------------------------------------------
Operating expenses:
Depreciation and amortization 78,707 80,237
Professional services 30,945 211,498
Research and product development 94,927 82,635
Sales, marketing and public relations 111,646 245,702
General and administrative 240,515 485,380
- --------------------------------------------------------------------------------------------------------
Total operating expenses 556,740 1,105,452
- --------------------------------------------------------------------------------------------------------
Loss from operations (548,236) (1,105,452)
Other income (expense), net (148,199) 5,092
- --------------------------------------------------------------------------------------------------------
Net loss $ (696,435) $ (1,100,360)
- --------------------------------------------------------------------------------------------------------
Net loss per share - basic and diluted $ (0.05) $ (0.10)
- --------------------------------------------------------------------------------------------------------
Weighted average number of shares outstanding 13,218,223 11,496,000
- --------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
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LIFESTREAM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
September 30,
---------------------------------
1999 1998
- --------------------------------------------------------------------------------------------------------------
(Unaudited) (Restated)
(Unaudited)
NET CASH USED IN OPERATING ACTIVITIES $ (430,287) $ (849,145)
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,829) (87,870)
Advance to officer (386) --
- --------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (3,215) (87,870)
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible debt 540,000 --
Proceeds from stock options exercised -- 14,454
Proceeds from sale of common stock 450,000 --
Payments on notes payable (524,617) (7,226)
- --------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 465,383 7,228
- --------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 31,881 (929,787)
Cash and cash equivalents,
Beginning of period 81,734 1,619,462
- --------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 113,615 $ 689,675
==============================================================================================================
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Issuance of common stock in exchange for:
Financing costs $ 139,228 $ --
Interest paid $ -- $ 1,000
==============================================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
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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 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. As a
result of the acquisition of Secured Interactive
Technologies, Inc. ("Secured") the consolidated
financial statements for the prior periods
presented, have been restated to effect a business
combination of entities under common control,
similar to a "pooling of interests". See Acquisition
of Secured. Accordingly, certain 1998 balances have
been reclassified to conform to the 1999
presentation.
B. GOING CONCERN The Company has incurred operating losses since
inception and at September 30, 1999, had incurred an
unaudited first quarter loss of $696,435. In
addition, the Company has a working capital
deficiency, 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 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. On
September 15, 1999, the Company completed a $500,000
6
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private placement offering whereby the Company sold
its unregistered common stock to three qualified
investors. The receipt of these funds continues to
meet the Company's short term cash needs. The
Company is currently pursuing a private placement of
shares of the Company's common stock to obtain the
funds necessary to finance the business until a
product revenue stream can be developed. There can
be no assurances that the Company will be successful
in executing its plans.
C. PRIVATE PLACEMENT In the first quarter ending September 30, 1999,
COMMON STOCK pursuant to a private offering of common stock, the
OFFERING Company received a total of $300,000. The terms of
the offering consisted of 500,000 shares of the
Company's common stock offered at $1.00 per share
with a warrant to purchase one additional share of
the Company's common stock at $1.25 per share.
Additionally, the Company commenced a $2,000,000
private offering in October 1999. The terms of this
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. As of
November 10, the Company has received $225,000 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. The convertible debt can be
converted, at the option of the debt holder, into
shares of the Company's common stock at a rate of
$.50 per share. 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.
E. ACQUISITION OF On September 1, 1999 the Company completed the
SECURED acquisition of Secured by effectuating a merger
INTERACTIVE whereby the stockholders of Secured received one
TECHNOLOGIES, INC. share of the Company's common stock 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
7
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software and information services for healthcare
data management of Personal Medical Records.
Lifestream previously owned 20% of Secured and
worked closely with Secured on the integration of
the Company's cholesterol monitor with Secured's
Medical Internet Solution. Resulting from the
acquisition of Secured, the consolidated financial
statements for prior periods presented have been
restated to effect a business combination of
entities under common control, similar to a "pooling
of interests".
Selected Summary Financial Information for the Three
Months Ended September 30, 1999
<TABLE>
<CAPTION>
Lifestream Secured
Technologies Interactive
Inc. Technologies, Inc.
-------------------------------------------------------------------
<S> <C> <C>
Revenues $ 49,976 $ --
Cost of products sold 41,472 --
-------------------------------
Gross profit
8,504 --
-------------------------------
Operating expenses 547,467 9,273
-------------------------------
Loss from operations (538,963) (9,273)
Other expense 145,378 2,821
-------------------------------
Net Loss $ (684,341) $ (12,094)
===============================
</TABLE>
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.
8
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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.
As a result of the acquisition of Secured, the consolidated financial statements
for the prior periods presented, have been restated to effect a business
combination of entities under common control, similar to a "pooling of
interests". See Acquisition of Secured.
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
June 7, 1999, Lifestream submitted a 510[k] pre-market notification to the US
Food and Drug Administration for the unique PrivalinkTM software accessory, that
combines a regulated medical device and patient information through the Internet
using industry-standard Smart Cards and high level encryption. The Company
anticipates FDA 510[k] clearance on PrivalinkTM by the end of the third fiscal
quarter ending March 31, 2000.
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.
9
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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.
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 twelve 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 initiated the start of pre-market Clinical
Trials, the results of which will be submitted to the US Food and Drug
Administration (FDA) in an OTC 510[k] Pre-Market Notification. 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 September
30, 1999, Lifestream had an accumulated deficit of approximately $10,438,975
million. 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.
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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. As of September 30, 1999, the Company
requires additional funding in order to continue as a going concern.
During the three months ended September 30, 1999, the Company has obtained
approximately $ 990,000 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 September 30, 2000. Due to the current
capital restraints on the Company, Lifestream has consolidated all company
functions to the Post Falls facility in an effort to reduce operating expenses.
RESULTS OF OPERATIONS
- ---------------------
REVENUES AND COST OF PRODUCTS SOLD:
Revenues for the three months ended September 30, 1999 were $49,976 as compared
to no revenues for the same period in 1998 primarily because the Company has
moved out of the development stage and has commenced operations. 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. The Company
expects to continue discounting its product prices until its products receive
more widespread market acceptance. Cost of products sold includes direct labor,
direct material and overhead. Due to the limited production for the period ended
September 30, 1999, 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.
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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 decreased to $556,740 for the three month
period ended September 30, 1999 from $1,105,452 for the three months ended
September 30, 1998. The decrease of $548,712 was primarily due to a decrease in
professional expenses of $180,553, sales, marketing and public relations of
$134,056 and general and administrative expenses of $244,865 as the Company has
consolidated all company functions to the Post Falls facility in an effort to
reduce operating expenses. In addition, the Company incurred initial costs in
1998 related to market research and product development of the Lifestream
professional-use cholesterol monitor not repeated in the same period of 1999.
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 three month period ended September 30, 1999,
other expense, net was $(148,199) as compared to $5,092 for the same period
ending September 30, 1998. This increase of $153,291 in other expense was
primarily attributable to the increase in convertible debt for which interest
and financing costs were accrued.
NET LOSS:
Primarily as a result of the foregoing factors, the Company's net loss was
$696,435 for the three month period ended September 30, 1999 and $1,100,360 for
the three months ended September 30, 1998. This represents a decrease in the
loss for the same period of $403,925.
FINANCIAL CONDITION:
During the three months ended September 30, 1999, the Company used cash in
operating activities of $430,287 as compared to $849,145 for the same period in
1998. This decrease of $418,858 was primarily due to the decrease in the net
loss for the period. As of September 30, 1999, the Company had a balance of
$113,615 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.
YEAR 2000 COMPLIANCE:
Management has initiated a company-wide program to prepare its financial,
manufacturing, and other critical systems and applications for the year 2000.
The focus of the program is to identify affected systems, develop a plan to
correct those systems in the most effective manner and then implement and
monitor the plan. The program also includes communications with the Company's
significant suppliers and customers to determine the extent to which the Company
is vulnerable to any failures by them to address the Year 2000 issue. As part of
a program developed by the FDA Center for Devices and Radiological Health, the
Lifestream cholesterol monitor was certified in June of 1998 to be Year 2000
12
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compliant. The Company is responsive to the Year 2000 compliance mandate from
the FDA. The Company had not expended material amounts related to the Year 2000
issue because the majority of its systems have been purchased from vendors that
have certified that their systems are Year 2000 compliant. At this time, the
Company believes it has properly prepared its financial, manufacturing and other
critical systems and applications for the year 2000. However, at this time, the
Company is not able to determine the estimated impact on the operations of the
Company should one of its suppliers or customers be unable to successfully
address the Year 2000 issue.
13
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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 five 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, 24,000 shares will be issued,
in the aggregate, to the directors with respect to the three month
period ended September 30, 1999.
2. On September 1, 1999 the Company issued 1,944,000 shares of Common
Stock in conjunction with the merger of Secured Interactive
Technologies, Inc. (See Acquisition of Secured).
3. In October 1999 the Company issued 95,500 shares of Common Stock to
four individuals who provided short-term financing to the Company
during the three month period ending September 30, 1999.
4. In October 1999 the Company issued 500,000 shares of Common Stock to
three individual investors who participated in the Company's Private
Placement Offering completed on September 15, 1999.
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
THE FOLLOWING ITEM WAS REPORTED IN THE FORM 8-K DATED SEPTEMBER 1,
1999: ITEM 2. Acquisition Or Disposition Of Assets - On September 1,
1999, the Company completed the acquisition of Secured Interactive
Technologies, Inc., the developer of the PrivalinkTM System, a suite of
secure Internet medical software and information services for
healthcare data management of personal medical records. The Company
issued a total of 1,944,000 shares of common stock to the stockholders
of Secured. The Company financed the entire acquisition by effectuating
a merger whereby the stockholders of Secured Interactive Technologies,
Inc. received one share of the Company's common stock for each share of
Secured Interactive Technologies, Inc. common stock owned by such
stockholder. The foregoing description is qualified in its entirety by
reference to the Agreement and Plan of Merger by and among Lifestream
Technologies, Inc., Secured Interactive Technologies, Inc. and the
Stockholders of Secured Interactive Technologies, Inc. dated June 24,
1999. No financial statements were filed as part of such report.
14
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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
-----------------------------------------------------------------
Christopher Maus, Chairman, President and Chief Executive Officer
DATE: November 12, 1999
BY: /s/ Brett Sweezy
-----------------------------------------------------------------
Brett Sweezy, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
DATE: November 12, 1999
-----------------------------------------------------------------
15
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EXHIBIT INDEX
Exhibit No.
27 Financial Data Schedule
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statement of the Company for the three month period ended
September 30, 1999 and should be read in conjunction with, and is qualified in
its entirety by, the audited financial statements for the year ended June 30,
1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 113,615
<SECURITIES> 0
<RECEIVABLES> 32,280
<ALLOWANCES> 0
<INVENTORY> 210,041
<CURRENT-ASSETS> 358,068
<PP&E> 408,003
<DEPRECIATION> (250,395)
<TOTAL-ASSETS> 2,218,671
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0
0
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</TABLE>
