U.S. Securities And Exchange Commission
Washington, D.C. 20549
Form 10-QSB - Quarterly or Transitional Report
(Added by 34-30968, eff. 8/13/93, as amended)
(Mark One)
[X] Quarterly Report Under Section 13 Or 15 (D) Of The Securities Exchange
ACT OF 1934
For the quarterly period ended August 31, 1998.
[ ] Transition Report Under Section 13 Or 15(D) Of The Securities Exchange
Act Of 1934
For the transition period from ______________ to _________________
Commission file number 0-10035
LESCARDEN, INC.
- ---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 13-2538207
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
420 Lexington Avenue, New York Suite 2025 10170
- ---------------------------------------- --------------------
(Address of principle executive offices) (Zip Code)
Issuer's telephone number (212) 687-1050
--------------
______________________________________________________________________.
(Former name, former address and former fiscal year, if changed
since last report)
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 for
such 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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at August 31, 1998
- ---------------------------- ------------------------------
Common Stock $.001 par value 16,611,308
<PAGE>
LESCARDEN INC.
--------------
<TABLE>
(UNAUDITED)
CONDENSED BALANCE SHEET
-----------------------
August 31, 1998
---------------
<CAPTION>
ASSETS
<S> <C>
Current Assets:
Cash $ 104,849
Inventory 33,834
-----------
Total Currents Assets 138,683
-----------
Security Deposit 3,080
-----------
Total Assets $ 141,763
-----------
-----------
Liabilities And Stockholders' Deficiency
Currents Liabilities:
Accounts Payable and Accrued Expenses $ 106,668
Advances from Related Parties 455,225
-----------
Total Liabilities 561,893
-----------
Stockholders' Deficiency:
Convertible Preferred Stock 1,840
Common Stock 16,611
Additional Paid-In Capital 13,414,884
Accumulated Deficit (13,853,465)
-----------
Stockholder's Deficiency (420,130)
-----------
Total Liabilities and Stockholders' Deficiency $ 141,763
-----------
-----------
</TABLE>
<PAGE>
LESCARDEN INC.
<TABLE>
(UNAUDITED)
CONDENSED STATEMENTS OF OPERATIONS
----------------------------------
<CAPTION>
For the Three Months
Ended August 31,
--------------------
<S> <C> <C>
1998 1997
---- ----
Total Revenues $ 464 $ 11
---------- ----------
Costs and Expenses:
Salaries - Officer 39,333 39,471
Salaries - Office 4,952 3,697
Professional Fees and Consulting 46,545 49,911
Research and Development 1,826 9,953
Rent and Office Expenses 17,905 15,335
Travel and Meetings 3,937 8,738
Taxes - Other 680 695
Insurance 45 167
Other Administrative Expenses 932 18,222
---------- ----------
Total Costs and Expense 116,155 146,189
---------- ----------
Net Loss $ (115,691) $ (146,178)
---------- -----------
---------- -----------
Net Loss Per Share $ (.01) $ (.01)
---------- -----------
---------- -----------
Weighted Average Number of
Common Shares Outstanding 16,311,308 12,026,760
---------- -----------
---------- -----------
</TABLE>
<PAGE>
LESCARDEN INC.
<TABLE>
(UNAUDITED)
CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
For the Three Months Ended
August 31,
--------------------------
<S> <C> <C>
1998 1997
---- ----
Cash Flows (Used In) Operations:
Net (Loss) $ (115,691) $ (146,178)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Changes in operating assets and liabilities:
Decrease in inventory 1,232 1,500
(Increase) decrease in prepaid expenses - (12,500)
(Decrease) increase in accounts payable and
accrued expenses (3,000) 20,001
---------- ------------
Net Cash (Used In) Operations (117,459) (137,177)
---------- ------------
Cash Flows Provided By Financing Activities:
Proceeds from exercise of common stock
purchase warrants - 62,452
Advances from related parties 190,000 -
Cash Flows Provided By Financing ---------- ------------
Activities 190,000 62,452
---------- ------------
Increase (decrease) in cash 72,541 (74,725)
Cash- Beginning of period 32,308 115,340
---------- ------------
Cash - End of period $ 104,849 $ 40,615
---------- ------------
---------- ------------
</TABLE>
<PAGE>
LESCARDEN INC.
--------------
(UNAUDITED)
NOTES TO FINANCIAL STATEMENTS -----------
-----------------------------
August 31, 1998
---------------
Note 1 - General:
The accompanying unaudited financial statements include all adjustments
which are, in the opinion of management, necessary for a fair statement of
the results for the interim periods. The statements have been prepared in
accordance with the requirements for Form 10-QSB and, therefore, do not
include all disclosures or financial details required by generally accepted
accounting principles. These condensed financial statements should be read in
conjunction with the financial statements and the notes thereto included in
the Company's Annual Report on Form 10-KSB for the year ended May 31, 1998.
The results of operations for the interim periods are not necessarily
indicative of results to be expected for a full year's operations.
<PAGE>
LESCARDEN INC.
--------------
Management's Discussion and Analysis of Financial Condition
and Results of Operations
------------------------------------------------------------
August 31, 1998
---------------
Results of Operations
- ---------------------
Overview
- --------
Since its inception the Company has primarily devoted its resources to
fund research, drug discovery and development. In addition, the Company
licenses its technology for commercialization by other companies and in the
fiscal year ended May 31, 1995, the Company began sales of its proprietary
bovine cartilage material, BIO-CARTILAGE<F1>, to a food supplement
distributor for sale through nutritional food supplement stores in the U.S.
The Company has sustained net losses of approximately $13.9 million from
inception to August 31, 1998. The Company has primarily financed its research
and development activities through a public offering of Common Stock, and
private placements of debt and equity securities and in recent years,
revenues from license fees and product sales.
Three months ended August 31, 1998 compared to August 31, 1997.
- ---------------------------------------------------------------
Total costs and expenses during the three months ended August 31, 1998
were 21% lower than those of the comparative period of the prior year
principally due to lower professional fees and consulting, research and
development, travel and other administrative expenses.
Liquidity and Capital Resources
- -------------------------------
Overview
- --------
The Company has had losses from operations in each of the five years
ended May 31, 1998. This trend may continue in the foreseeable future.
Working capital has been provided since the Company's inception primarily
from the sale of equity securities or from borrowings from its officers,
directors and shareholders and from outside investors, and in more recent
quarters, from revenues from licensing fees and product sales.
Present Liquidity
- -----------------
The Company's present liquidity position is critical. As of August 31,
1998 the Company's total liabilities exceeded its total assets by $ 420,130.
The Company will require additional product sales or funding during, or
shortly after the end of, the current fiscal quarter ending November 30,
1998, to sustain its operations.
As a result of the history of losses incurred by the Company, the net
loss during the year ended May 31, 1998 of ($ 484,860), and the limited
amount of funds currently available to finance the Company's operations,
the report of the Company's independent Certified Public Accountants on the
Company's Financial Statements as of May 31, 1997 and 1998 contain an
explanatory paragraph indicating that the Company may be unable to continue
in existence.
The Company plans to continue to implement plans to sell
BIO-CARTILAGE<F1> to the over-the-counter food supplement market and may
also introduce a second product in the same marketplace in the near future.
In addition, the Company continues to seek to obtain either a new licensee,
or distributors, for its CATRIX<F1> product, in powder form only, for topical
wound healing purposes. If successful, the Company may increase cash flow
in order to allow the Company to continue to meet its obligations and sustain
its operations. The Company also plans to try to obtain a financing from the
sales of unregistered shares of common stock.
The Company has no material commitments for capital expenditures at
August 31, 1998.
<F1>
A registered trademark of Lescarden Inc.
<PAGE>
LESCARDEN INC.
--------------
Part II - Other Information
---------------------------
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits: EX-27
(b) Reports on Form 8-K: There were no reports on Form 8-K filed for
the three months ended August 31, 1998.
INDEX TO EXHIBITS
27-Financial Data Schedule
<PAGE>
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LESCARDEN INC.
--------------
(Registrant)
Date: October 7, 1998 s/Gerard A. Dupuis
-----------------------
Gerard A. Dupuis
Chairman of the Board
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM LESCARDEN
INC'S AUGUST 31, 1998 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL LEGENDS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> AUG-31-1998
<CASH> 104,849
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 33,834
<CURRENT-ASSETS> 138,683
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 141,763
<CURRENT-LIABILITIES> 561,893
<BONDS> 0
0
0
<COMMON> 16,611
<OTHER-SE> (436,741)
<TOTAL-LIABILITY-AND-EQUITY> 141,763
<SALES> 464
<TOTAL-REVENUES> 464
<CGS> 0
<TOTAL-COSTS> 116,155
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (115,691)
<INCOME-TAX> 0
<INCOME-CONTINUING> (115,691)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (115,691)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
