Attached files
| file | filename |
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| EX-31 - CERTIFICATION - LESCARDEN INC | lcar_ex31.htm |
| EX-32 - CERTIFICATION - LESCARDEN INC | lcar_ex32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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ü | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
| ACT OF 1934 |
For the quarterly period ended: February 28, 2011 | |
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
| ACT OF 1934 |
For the transition period from: _____________ to _____________ | |
Commission File Number: 0-10035
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LESCARDEN, INC.
(Exact name of registrant as specified in its charter)
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New York | 13-2538207 |
(State or other jurisdiction | (I.R.S. Employer |
of incorporation or organization) | Identification No.) |
420 Lexington Ave. Ste 212, New York 10170
(Address of Principal Executive Office) (Zip Code)
(212) 687-1050
(Registrant’s telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the | ||||||||||
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ü | Yes |
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, | ||||||||||
and post such files). |
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, | ||||||||||
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Large accelerated filer |
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Non-accelerated filer |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||||||||||
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. | ||||||||||
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Class |
| Outstanding April 12, 2011 | ||||||||
Common Stock $.001 par value |
| 40,076,783 | ||||||||
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
LESCARDEN INC.
CONDENSED BALANCE SHEETS
See notes to financial statements
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LESCARDEN INC.
CONDENSED STATEMENTS OF OPERATIONS
See notes to financial statements
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LESCARDEN INC.
CONDENSED STATEMENTS OF CASH FLOWS
See notes to financial statements
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LESCARDEN INC .
(UNAUDITED) NOTES TO FINANCIAL STATEMENTS
February 28, 2011
Note 1 - General:
The accompanying unaudited financial statements include all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods. All such adjustments are of a normal recurring nature. The statements have been prepared in accordance with the requirements for Form 10-Q 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-K for the year ended May 31, 2010. The results of operations for the interim periods are not necessarily indicative of results to be expected for a full year's operations.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability of assets and the satisfaction of liabilities that might be necessary should the Company be unable to continue as a going concern. As shown in the financial statements, the Company incurred a loss from operations for the nine months ended February 28, 2011, has a stockholders’ deficiency and a working capital deficiency. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s plan and ability to continue as a going concern is primarily dependent upon successful regulatory certification of its new packager, which will enable the Company to grow revenue through existing and new lines of business. There can be no assurance that the Company will be able to grow revenues or secure sufficient additional financing to meet future obligations.
At February 28, 2011, inventory of $112,486 consisted of $59,924 of finished goods and $52,562 of raw materials.
The Company’s assets and liabilities that qualify as financial instruments under SFAS No. 107 “Disclosures About Fair Value of Financial Instruments” (ASC 825-10-50) approximate their carrying amounts presented in the balance sheet based upon the short-term nature of the accounts at February 28, 2011.
The Company has evaluated the financial statements for subsequent events through the date of the filing of this quarterly report on Form 10-Q on April 12, 2011.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations:
The results of operations for the nine months ended February 28, 2011 reflect increased sales volume in both Europe and Asian markets. In anticipation of the plant closing of Amcor’s packaging facility in December 2010, the Company accelerated production and shipment of existing purchase orders from its major customers scheduled for delivery in the third fiscal quarter. The Company has selected an alternative packaging facility and anticipates its production packaging process at the new facility will be operational before the fiscal year-end. Based on the transfer of its packaging process to Amcor in 2009, the Company expects to incur some temporary increases in cost of sales and professional fees during the third and fourth quarters associated with the set-up and calibration of the new facility and the associated regulatory recertification requirements.
Nine months ended February 28, 2011 compared to February 28, 2010
The Company’s revenues decreased 11% or $57,262 during the nine months ended February 28, 2011 compared to February 28, 2010 due to a decrease in license fee income. Total costs and expenses during the nine months ended February 28, 2011 were 4% or $19,553 higher than those of the comparative prior year
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period due to increases in salaries $17,721 and commission expense of $20,256 offset by a decrease in rent and office expenses of $20,670.
Three months ended February 28, 2011 compared to February 28, 2010
The Company’s revenues increased in the fiscal quarter ended February 28, 2011 compared to February 28, 2010 by almost 60% or $191,923 due to a reduction in the unusually high sales of Catrix in Europe for the three months ended February 28, 2010 resulting from the fulfillment of a large backlog of orders that accumulated during a year-long production disruption, offset by a decrease in license fee income of $26,201. Total costs and expenses during the three months ended February 28, 2011 were 23% or $45,699 lower than those of the comparative prior year period. The increase was principally due to decreases in cost of sales and rent and office expense of $53,779 and $12,270, offset by increases in commission expense and salaries of $8,142 and $13,840 respectively.
Liquidity and Capital Resources
As of February 28, 2011, the Company’s current assets exceeded its accounts payable and accrued expenses e by $5,643. The Company’s cash and cash equivalents balance decreased by $53,297 in the nine months ended February 28, 2011 to $84,631. On November 10, 2011, the Company completed conversion of a $274,000 shareholder loan into common stock. Pursuant to the Loan Conversion and Stock Purchase agreement dated November 8, 2011, the Company issued 9,133,333 shares of common stock in exchange for the extinguishment of a $274,000 shareholder loan.
The Company has no material commitments for capital expenditures at February 28, 2011.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not required for smaller reporting company.
Item 4. Controls and Procedures.
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Company’s management, including its Chief Executive and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s management, including the Chief Executive and Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
The Company has carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on such evaluation, the Company’s Chief Executive and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this quarterly report on Form 10-Q.
There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this quarterly report on Form 10-Q.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
See Loan Conversion and Stock Purchase Agreement with Charles T. Maxwell (incorporated by reference from our Current Report on Form 8-K filed on November 10, 2010)
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Removed and Reserved.
Item 5. Other Information.
None.
Item 6. Exhibits.
Exhibit No. |
| Description |
| Certification pursuant to Exchange Act Rule 13a – 14 (a)/15d-14(a) | |
| Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
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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) |
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Date: April 12, 2011
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| /s/ William E. Luther |
| William E. Luther |
| Chief Executive and Chief Financial Officer |
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