U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of
The Securities Exchange Act of 1934
L.O.M. MEDICAL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 98-0178784
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
#580-885 Dunsmuir Street, Vancouver, British Columbia, Canada V6C 1N8
(Address of registrant's principal executive offices) (Zip Code)
604.602.9400
(Registrant's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on which
to be so Registered: Each Class is to be Registered:
-------------------- -------------------------------
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $.001
(Title of Class)
Preferred Stock, Par Value $.001
(Title of Class)
Copies to:
Thomas E. Stepp, Jr.
Stepp & Beauchamp, LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile: 949.660.9010
Page 1 of 4
Exhibit Index is specified on Page 3
1
<PAGE>
L.O.M. Medical International, Inc.,
a Delaware corporation
Index to Amendment No. 2 to Registration Statement on Form 10-SB
Item Number and Caption Page
- ----------------------- ----
PART F/S
Financial Statements F-1 through F-10
Signatures 4
2
<PAGE>
PART F/S
Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with this Amendment No. 2 to Registration Statement on Form 10-SB.
(a) Index to Financial Statements. Page
- --- ------------------------------ ----
1 Unaudited Consolidated Balance Sheet
as at November 30, 1999 F-1
2 Unaudited Consolidated Statement of Loss
for Six Months Ended November 30, 1999 F-2
3 Unaudited Consolidated Statement of Cash Flows
for Six Months Ended November 30, 1999 F-3
4 Unaudited Consolidated Statement of
Stockholders' Equity and Comprehensive Income for
Six Months Ended November 30, 1999 F-4
5 Notes to Unaudited Consolidated Financial Statements F-5 through F-10
3
<PAGE>
SIGNATURES
In accordance with the provisions of Section 12 of the Securities Exchange
Act of 1934, the Company has duly caused this Amendment No. 2 to Registration
Statement on Form 10-SB to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Vancouver, British Columbia, Canada, on January
19, 2000.
L.O.M. Medical International, Inc.,
a Delaware corporation
By: /s/ John Klippenstein
---------------------
John Klippenstein
Its: President
4
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Consolidated Balance Sheet
$ United States
For the six months ended November 30, 1999 and 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash $ 329,516 $ 440,903
Accounts receivable 23,968 16,274
Inventory 100 --
Prepaid expenses 3,352 12,428
-----------------------------------------------------------------------------
356,936 469,605
Patent costs (note 3) 14,588 400,445
Capital assets (note 4) 43,730 40,220
- ----------------------------------------------------------------------------------
$ 415,254 $ 910,270
- ----------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 20,016 $ 13,770
Redeemable preferred shares (note 5) 301,727 309,677
Minority interest (5,536) (5,536)
Stockholders' equity
Capital stock (note 6) 5,619 5,508
Additional paid in capital 1,419,961 1,154,635
Deficit accumulated during the development stage (1,349,859) (574,072)
Accumulated other comprehensive income 23,326 6,288
-----------------------------------------------------------------------------
99,047 592,359
- ----------------------------------------------------------------------------------
$ 415,254 $ 910,270
- ----------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
On behalf of the Board:
_____________________ Director
_____________________ Director
F-1
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Consolidated Statement of Loss
$ United States
For the six months ended November 30, 1999 and 1998
- --------------------------------------------------------------------------------
From Inception
(March 17, 1997) 1999 1998
to November 30, 1999
- --------------------------------------------------------------------------------
Expenses
Advertising $ 8,230 $ 5 $ 2,365
Amortization 29,778 8,247 8,831
Automotive 34,698 8,187 7,933
Consulting fees 41,870 20,981 10,445
Design plans 10,911 -- --
Director's fees 17,141 1,717 3,452
Foreign exchange (gain) loss (4,184) (1,721) 3,094
Insurance 1,981 -- 188
Interest and bank charges 4,260 2,289 517
Legal and accounting 110,310 28,331 21,288
Licences, fees and dues 1,050 185 288
Management fees 259,761 45,248 35,327
Office and administration 111,785 20,568 31,875
Product development 1,582 -- --
Promotion and entertainment 11,634 1,482 2,133
Rent 82,006 17,717 16,876
Repairs and maintenance 2,150 -- 89
Salaries 31,590 31,590 --
Telephone and utilities 29,523 6,312 6,853
Travel 25,203 10,250 2,396
Video production 20,417 2,929 4,958
--------------------------------------------------------------------------
831,696 204,317 158,903
- -------------------------------------------------------------------------------
Loss from operations (831,696) (204,317) (158,903)
Other income
Interest income 44,435 6,488 10,806
--------------------------------------------------------------------------
(787,261) (197,829) (148,097)
Write down of inventory (note 8) 55,734 -- --
Write down of product rights and
patent costs (note 3) 374,128 -- --
- -------------------------------------------------------------------------------
Net loss $(1,217,123) $ (197,829) $ (148,907)
- -------------------------------------------------------------------------------
Loss per share $ (0.03) $ (0.03)
- -------------------------------------------------------------------------------
See accompanying notes to financial statements
F-2
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Consolidated Statement of Cash Flows
$ United States
For the six months ended November 30, 1999 and 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
From inception
(March 17, 1997) 1999 1998
to November 30, 1999
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating activities
Net loss $(1,217,123) $ (197,829) $ (148,097)
Items not involving cash
Amortization 29,778 8,247 8,831
Write down of inventory 55,734 -- --
Write down of product rights 374,128 -- --
Changes in non-cash working capital
Accounts receivable 58,032 2,474 (4,828)
Prepaid expenses (3,352) 1 (543)
Accounts payable and accrued liabilities (6,208) (16,388) (7,534)
Inventory purchases (55,834) -- --
- ------------------------------------------------------------------------------------------
(764,845) (203,495) (152,171)
Financing
Issuance of capital stock 820,580 186,321 80,377
Issuance of redeemable preferred shares
of subsidiary 309,677 -- --
- ------------------------------------------------------------------------------------------
1,130,257 186,321 80,377
Investing
Acquisition of capital assets (53,787) -- (38,391)
Acquisition of product rights and patents (381,292) 44 2,891
Acquisition of shares 374,952 --
- ------------------------------------------------------------------------------------------
(60,127) 44 (35,500)
Other comprehensive income 24,231 --
- ------------------------------------------------------------------------------------------
Increase (decrease) in cash 329,516 (17,130) (107,294)
Cash, beginning of period -- 346,646 548,197
- ------------------------------------------------------------------------------------------
Cash, end of year $ 329,516 $ 329,516 $ 440,903
- ------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Consolidated Statement of Stockholders' Equity and Comprehensive Income
$ United States
For the six months ended November 30, 1999 and 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Deficit
Capital Stock Accumulated Accumulated
---------------------- Additional During the Other Total
Number Paid in Development Comprehensive Stockholders'
of Shares Amount Capital Stage Income Equity
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Common shares issued
net of share issue costs 5,538,849 $ 5,538 $ 1,233,721 $(1,152,030) $ 23,326 $ 110,555
Common shares issued
net of shares issue costs 50,432 75 166,096 -- -- 166,171
Share subscriptions received
for 6,200 shares at $3.25
per share -- 6 20,144 -- 20,150
Foreign currency translation -- -- -- -- -- --
Net loss -- -- -- (197,829) -- (197,829)
- -----------------------------------------------------------------------------------------------------------------
Balance, November 30, 1999 5,589,281 $ 5,619 $ 1,419,961 $(1,349,859) $ 23,326 $ 99,047
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
F-4
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
$ United States
For the six months ended November 30, 1999 and 1998
- --------------------------------------------------------------------------------
L.O.M. Medical International Inc. was incorporated on March 17, 1997 under the
General Corporation Laws of Delaware. It conducts research and development on
new products in the medical field and has filed a patent application on a
retractable syringe. Operations effectively commenced on June 1, 1997.
1. Significant accounting policies:
a) Going concern
These financial statements have been prepared on the going concern
basis, which assumes the realization of assets and liquidation of
liabilities in the normal course of business. As shown in the
consolidated financial statements, to date, the Company has
accumulated a deficit since inception of $1,217,123. This factor,
among others raises substantial doubt about the Company's ability to
continue as a going concern. The Company's ability to continue as a
going concern is dependent on its ability to generate future
profitable operations and receive continued financial support from its
stockholders and other investors.
b) Translation of financial statements
The Company's subsidiary, L.O.M. Laboratories Inc. operates in Canada
and its operations are conducted in Canadian currency.
The method of translation applied is as follows:
i) Assets and liabilities are translated at the rate of exchange in
effect at the balance sheet date, being US $1.00 per Cdn $1.45
ii) Revenues and expenses are translated at the exchange rate in
effect at the transaction date.
iii) The net adjustment arising from the translation is included in
accumulated other comprehensive income.
c) Basis of presentation and consolidation
The consolidated financial statements include the accounts of the
Company and its 96% owned subsidiary, L.O.M. Laboratories Inc.
d) Product rights and patent costs
Product rights and patent costs relate to amounts paid to acquire the
rights to produce and distribute products as well as the costs
associated with patent applications. These costs are being amortized
on a straight-line basis over five years. Management periodically
reviews the carrying values of the product rights and patent costs and
based upon several factors, including the current assessment of the
viability of the product, determines whether the carrying value
exceeds the net realizable value for such costs. If it is determined
that the carrying value cannot be supported, the related costs are
changed against operations in the year of determination of the
impairment in value.
F-5
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements, page 3
$ United States
For the six months ended November 30, 1999 and 1998
- --------------------------------------------------------------------------------
1. Significant accounting policies (continued):
e) Capital assets
Capital assets are recorded at cost. Amortization is provided using
the following methods and annual rates which are intended to amortize
the cost of the assets over their estimated useful life:
- -------------------------------------------------------------------------------
Asset Method Rate
- -------------------------------------------------------------------------------
Leasehold improvements Straight-line 20%
Computer software Straight-line 100%
Equipment Declining balance 30%
Furniture and fixtures Declining balance 20%
- -------------------------------------------------------------------------------
f) Management estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
g) Financial instruments
The fair values of the Company's cash, accounts receivable and
accounts payable and accrued liabilities approximate their carrying
values due to the relatively short periods to maturity of the
instruments. It is not possible to arrive at a fair value for
redeemable preferred shares as a maturity date is not determinable.
The maximum credit risk exposure for all financial assets is the
carrying amount of those assets.
h) Loss per share
Loss per share has been calculated using the weighted average number
of common shares outstanding during the period.
i) Accounting standards change
In June 1998, the Financial Accounting Standards Board issued SFAS no.
133, "Accounting for Derivative Instruments and Hedging Activities."
Adoption of this statement is not expected to have a significant
impact on the Company's results of operations or financial position.
F-6
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements, page 4
$ United States
For the six months ended November 30, 1999 and 1998
- --------------------------------------------------------------------------------
2. Business combination:
Effective June 1, 1997, the Company acquired 96% of the outstanding Class A
common voting shares of L.O.M. Laboratories Inc. Prior to and immediately after
the acquisition, L.O.M. Laboratories Inc. was controlled by a related party, the
president and controlling shareholder of the Company. Accordingly, this
transaction has been measured at the carrying amount of the assets and
liabilities of L.O.M. Laboratories Inc. with the difference between the carrying
amount and the exchange amount reflected as a charge to equity. Details of the
acquisition are as follows:
- --------------------------------------------------------------------------------
Net assets (liabilities) acquired at carrying amounts
Cash $ 375,000
Non-cash current assets 82,000
Product rights and patent costs 22,000
Capital assets 14,000
Current liabilities (26,224)
Share subscriptions (605,000)
Minority interest 5,536
- -------------------------------------------------------------------------------
(132,688)
Excess of consideration given over carrying amount
of net assets acquired 132,736
- -------------------------------------------------------------------------------
Consideration given:
Cash $ 48
- -------------------------------------------------------------------------------
3. Product rights and patent costs:
- --------------------------------------------------------------------------------
1999
- --------------------------------------------------------------------------------
Product rights $ --
Patent costs 14,588
- --------------------------------------------------------------------------------
$14,588
- --------------------------------------------------------------------------------
Product rights represent certain rights to manufacture and market a contact
lens inserter and storage system ("Lens-o-matic") developed by the
president of the Company.
At the time of the acquisition of the product rights from the president of
the Company, the value attributed to the product rights, $380,885, was
agreed to by the Company's Board of Directors. During the year ended May
31, 1999, the investment was written down to a nominal amount, due to its
speculative nature.
Patent costs relate to the costs incurred for patent application for a
retractable syringe developed by the Company.
F-7
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements, page 5
$ United States
For the six months ended November 30, 1999 and 1998
- --------------------------------------------------------------------------------
4. Capital assets:
- --------------------------------------------------------------------------------
1999
- --------------------------------------------------------------------------------
Accumulated Net book
Cost amortization value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Leasehold improvements 27,919 8,376 19,543
Computer software 520 455 65
Equipment 20,948 11,746 9,202
Furniture and fixtures 20,746 5,826 14,920
- --------------------------------------------------------------------------------
$70,133 $26,403 $43,730
- --------------------------------------------------------------------------------
5. Redeemable preferred shares:
The Company's subsidiary has redeemable preferred shares outstanding as
follows:
- --------------------------------------------------------------------------------
1999 1998
- --------------------------------------------------------------------------------
Issued:
4,000 Class C preferred shares with
a par value of $100 Cdn redeemable
at $110.16 Cdn per share at the
option of the holder. Each share is
entitled to a fixed non-cumulative
dividend at the rate of 9% per
annum payable at such times as
determined by the Directors. 301,727 309,677
- --------------------------------------------------------------------------------
F-8
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements, page 6
$ United States
For the six months ended November 30, 1999 and 1998
- --------------------------------------------------------------------------------
6. Capital stock:
a) Authorized:
50,000,000 Common shares with a par value of $.001 each 5,000,000
Preferred shares with a par value of $.001 each
b) Share subscriptions:
Subsequent to November 30, 1999, the Company issued 6,200 common
shares at $3.25 per share for net proceeds of $20,144, which were
received prior to November 30, 1999.
c) Stock option plan:
1,000,000 common shares of the Company are reserved for issuance upon
exercise of stock options. As at May 31, 1999, no stock options have
been granted.
7. Related party transactions:
During the year the Company entered into the following transactions with
related parties:
- --------------------------------------------------------------------------------
1999
- --------------------------------------------------------------------------------
Legal and accounting fees paid to a director $ 6,718
Management fees paid to president 60,000
Office and administration fees paid to president's spouse 18,000
Office and administration fees paid to an individual
related to the president 8,040
Rent paid to a company controlled by the president 17,717
- --------------------------------------------------------------------------------
These transactions are in the normal course of operations and are measured
at the exchange amount of consideration established and agreed to by the
related parties.
F-9
<PAGE>
L.O.M. MEDICAL INTERNATIONAL INC.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements, page 7
$ United States
For the six months ended November 30, 1999 and 1998
- --------------------------------------------------------------------------------
8. Commitments:
The Company is obligated to make future lease payments for its offices as
follows:
2000 $ 36,913
2001 $ 19,453
2002 $ 19,453
2003 $ 19,453
2004 $ 19,453
9. Uncertainty due to the Year 2000 Issue:
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using Year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the entity,
including those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.
F-10
