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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 DECEMBER 31, 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)
----------------------------------------
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 February
11, 2000 was 18,400,191
Transitional Small Business Disclosure Format. Yes [ ] No [X]
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<PAGE>
LIFESTREAM TECHNOLOGIES, INC.
FORM 10-QSB
FOR THE QUARTER ENDED DECEMBER 31, 1999
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Consolidated Financial Statements
<S> <C>
Balance Sheets as of December 31, 1999 and June 30, 1999 2
Statements of Loss for the six month periods ended December 31, 1999
and 1998 and the three month periods ended December 31, 1999 and 1998 4
Statements of Cash Flows for the six month periods ended December 31,
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 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 15
Exhibit Index 16
</TABLE>
1
<PAGE>
Part I. FINANCIAL INFORMATION Lifestream Technologies, Inc.
Item 1. Financial Statements Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
- ---------------------------------------------------------------------------------------------------
(Unaudited) (Restated)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 23,592 $ 81,734
Accounts receivable 15,019 27,829
Inventories 185,570 235,418
Prepaid expenses 15,402 2,132
- ---------------------------------------------------------------------------------------------------
Total current assets 239,583 347,113
- ---------------------------------------------------------------------------------------------------
Equipment and leasehold improvements, net 366,840 452,708
- ---------------------------------------------------------------------------------------------------
Other assets:
Patent and license rights, net 1,374,461 1,436,724
Note receivable, officer 21,699 25,531
Deferred financing costs 0 8,181
Other 4,112 34,291
- ---------------------------------------------------------------------------------------------------
Total other assets 1,400,272 1,504,727
- ---------------------------------------------------------------------------------------------------
Total assets $ 2,006,695 $ 2,304,548
- ---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
Lifestream Technologies, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, June 30,
1999 1999
- ---------------------------------------------------------------------------------------------------------
(Unaudited) (Restated)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 463,522 $ 424,123
Accrued wages and payroll taxes 135,282 122,125
Interest payable and other liabilities 9,386 16,521
Current maturities of note payable 36,330 36,330
Current maturities of capital lease obligation 36,094 39,650
Convertible debt 0 250,000
- ---------------------------------------------------------------------------------------------------------
Total current liabilities 680,614 888,749
Capitalized lease obligation, less current maturities 33,747 47,146
Notes payable, less current maturities 87,797 105,962
Contingent stock liability 774,000 867,000
- ---------------------------------------------------------------------------------------------------------
Total liabilities 1,576,158 1,908,857
- ---------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Stockholders' equity:
Common stock 15,617 14,132
Additional paid-in capital 11,652,132 10,124,099
Accumulated deficit (11,237,212) (9,742,540)
- ---------------------------------------------------------------------------------------------------------
Total stockholders' equity 430,537 395,691
- ---------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 2,006,695 $ 2,304,548
- ---------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
Lifestream Technologies, Inc.
Consolidated Statements of Loss
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
December 31, December 31,
------------------------------ ------------------------------
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
(Unaudited) (Restated) (Unaudited) (Restated)
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 81,055 $ 9,610 $ 31,079 $ 9,610
Cost of products sold 71,924 6,167 30,452 6,167
- -----------------------------------------------------------------------------------------------------------------------------------
Gross profit 9,131 3,443 627 3,443
- -----------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Depreciation and amortization 151,043 155,359 72,336 75,122
Professional services 135,318 287,699 104,373 76,201
Research and product development 172,327 307,017 77,400 224,382
Sales and marketing 190,958 297,461 79,312 51,759
General and administrative 521,105 1,386,063 280,590 900,683
- -----------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 1,170,751 2,433,599 614,011 1,328,147
- -----------------------------------------------------------------------------------------------------------------------------------
Loss from operations (1,161,620) (2,430,156) (613,384) (1,324,704)
Other income (expense), net (333,053) (63,566) (184,854) (68,658)
- -----------------------------------------------------------------------------------------------------------------------------------
Net loss $ (1,494,673) (2,493,722) (798,238) (1,393,362)
===================================================================================================================================
Net loss per share - basic and diluted $ (0.11) $ (0.21) $ (0.05) $ (0.11)
===================================================================================================================================
Weighted average number of shares
outstanding 14,134,616 11,756,680 15,147,651 12,792,000
===================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
Lifestream Technologies, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
December 31,
---------------------------------
1999 1998
- ------------------------------------------------------------------------------------------------------------
(Unaudited) (Restated)
(Unaudited)
<S> <C> <C>
Net cash used in operating activities $ (801,309) $(1,649,476)
- --------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (2,829) (170,492)
Advance to officer 0 (15,209)
- --------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (2,829) (185,701)
- --------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Checks issued in excess of funds 0 (9,775)
Proceeds from issuance of convertible debt 540,000 225,000
Proceeds from stock options exercised 0 14,495
Proceeds from sale of common stock 735,000 94,899
Payments on Capital Lease obligations (9,004) (8,093)
Proceeds notes payable 0 (453)
Payments on notes payable (520,000) 0
- --------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 745,996 316,073
- --------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents (58,142) (1,519,104)
Cash and cash equivalents,
Beginning of period 81,734 1,611,448
- --------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 23,592 $ 92,344
==============================================================================================================
Supplemental schedule of non-cash investing and
financing activities:
Issuance of common stock in exchange for:
Financing costs $ 139,248 $ 113,816
Conversion of debt $ 270,000 $ 0
==============================================================================================================
See accompanying notes to consolidated financial statements
</TABLE>
5
<PAGE>
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 December 31, 1999, had incurred an
unaudited year to date loss of $1,494,673. 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 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
6
<PAGE>
continue production and marketing of its products.
As of February 11, 2000, the Company has
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 cash
needs. Following completion of the $3,000,000
private placement, the Company intends to offer up
to $3,000,000 in convertible debentures to obtain
the funds necessary to finance the business until a
sustaining product revenue stream can be developed.
There can be no assurances that the Company will be
successful in executing its plans.
C. Private The Company commenced a $2,000,000 private offering
Placement in October 1999. The terms of this offering
Common Stock consisted of 2,000,000 shares of the Company's
Offering 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. As
of February 11, the Company has received $3,173,000
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.
E. Acquisition of On September 1, 1999 the Company completed the
Secured acquisition of by Secured 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
7
<PAGE>
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
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". It is the
Company's opinion that the operating loss sustained
by Secured Interactive Technologies, Inc. prior to
the merger is immaterial and therefore does not
warrant separate presentation.
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.
As a result of the acquisition of Secured, the consolidated financial
8
<PAGE>
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
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.
9
<PAGE>
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 December 31,
1999, Lifestream had an accumulated deficit of approximately $11,237,212. 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 $2,725,000
with further financial commitments totaling $385,000. As of February 11, 2000,
the Company has cash in the bank of approximately $1,960,000, which should meet
the required short term anticipated financial requirements of the Company.
10
<PAGE>
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 six months ended December 31, 1999, the Company has obtained
approximately $1,275,000 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 December 31, 2000.
Results of Operations
- ---------------------
Revenues and Cost of Products Sold:
Revenues for the six months ended December 31, 1999 increased $71,445 to $81,055
as compared to $9,610 for the same period in 1998. For the three months ended
December 31, 1999, revenues increased $21,469 to $31,079 from $9,610 in the same
period in 1998 primarily because the Company emerged out of the development
stage and has 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 December 31, 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.
11
<PAGE>
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 $1,170,751 for the six months
ended December 31, 1999 from $2,433,599 for the same six month period in 1998
and for the three months ended December 31, 1999 operating expenses decreased to
$614,011 from $1,328,147 for the same three month period in 1998. The decrease
of $1,262,848 for the six month period and $714,136 for the three 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.
Specifically, for the six months ending December 31, 1999 professional expenses
decreased $152,381, sales and marketing decreased $106,503 and general and
administrative expenses decreased $864,958. Additionally, the Company incurred
initial costs in 1998 related to research and product development of the
Lifestream professional-use cholesterol monitor not repeated in the same period
of 1999, resulting in a decrease in research and development expenses of
$134,690.
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 six month period ended December 31, 1999, other
expense, net was $(333,053) as compared to $(63,566) for the same period ending
December 31, 1998. For the three month period ended December 31, 1999, other
expense, net was $(184,854) as compared to $(68,658) for the same period in
1998. This increase of $116,196 in other expense was primarily attributable to
an increase of financing costs associated with the Company's convertible debt.
Net Loss:
Primarily as a result of the foregoing factors, the Company's net loss was
$1,494,673 and $798,238, respectively, for the six and three month period ended
December 31, 1999 and $2,493,722 and $1,393,362, respectively, for the six and
three months ended December 31, 1998. This represents a decrease in the loss for
the six month period of $999,049 and a decrease in the loss for the three month
period of $595,124 for the same periods in 1998.
Financial Condition:
During the six months ended December 31, 1999, the Company used cash in
operating activities of $801,309 as compared to $1,649,476 for the same period
in 1998. This decrease of $848,167 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 $745,996 as compared to $316,073 for the
same period in 1998. This
12
<PAGE>
increase of $429,923 was primarily due to the Company selling $735,000 of its
common stock to qualified investors. As of December 31, 1999, the Company had a
balance of $23,592 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.
Uncertainty due to the year 2000 issue:
Like other companies, the Company could be adversely affected if the computer
systems that the Company, its suppliers or customers use do not properly process
and calculate date-related information and data from the period surrounding and
including January 1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices such as
production equipment, elevators, etc. While the Company's project to assess and
correct Year 2000 related events has been completed, and the Company has not
experienced any significant Year 2000 related events, interactions with other
companies' systems make it difficult to conclude there will not be future
effects. Consequently, at this time, management cannot provide assurances that
the Year 2000 issue will not have an impact on the Company's operations.
13
<PAGE>
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, 50,000 shares will be issued,
in the aggregate, to the directors with respect to the six month period
ended December 31, 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.
5. In December 1999, the Company issued 435,000 shares of Common Stock to
three investors pursuant to the Company's $3,000,000 Private Placement
Offering (Amended) commencing in October 1999.
6. On December 15, 1999 the Company issued 540,000 shares of Common Stock
to three individuals who provided $270,000 in short-term financing to
the Company in July 1999.
7. In December 1999, the Company issued 50,000 shares of Common Stock to
two financial consultants and 10,030 shares of Common Stock to one
partnership in exchange for rent on the Company's Post Falls
facilities.
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.
14
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
On Tuesday, December 9, 1999 the Company held its annual meeting of
stockholders. At the annual meeting, stockholders of the Company voted on (a)
the election of two directors; and (b) the ratification of the appointment of
the Company's independent auditors.
The proxy tabulation results for the matters voted on at the annual
meeting are as follows:
1. Election of Directors/Nominees: Robert Boyle
For: 5,807,097 Against: 300 Abstain: 21,625
Election of Directors/Nominees: William Gridley
For: 5,807,397 Against: 0 Abstain: 21,625
2. Proposal to ratify the appointment of independent auditors
For: 5,799,789 Against: 24,253 Abstain: 4,980
Item 6. Exhibits and Reports on Form 8-K
a. Exhibit Index
b. Reports of Form 8-K
15
<PAGE>
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: February 11, 2000
------------------------------------------------------------------
BY: /s/ Brett Sweezy
------------------------------------------------------------------
Brett Sweezy, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
DATE: February 11, 2000
------------------------------------------------------------------
16
<PAGE>
EXHIBIT INDEX
Exhibit No.
27 Financial Data Schedule
17
<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
December 31, 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
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0
0
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