Add
LBMH.OB to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| LBMH.OB > SEC Filings for LBMH.OB > Form 10-Q/A on 15-May-2009 | All Recent SEC Filings |
15-May-2009
Quarterly Report
Net Income:
The Company's net income for the three months ended December 31, 2008, increased
$824,897 to $245,722 compared to a net loss of ($579,175) for the three months
ended December 31, 2007, due to substantially higher sales volumes at
substantially lower incremental operating expenses.
Liquidity and Capital Resources
Historically, the Company's principal use of cash has been to fund ongoing
operations. However, during the three months ended December 31, 2008, we
generated $447,211 of positive cash flow as a result of our operations compared
to a negative cash flow of $627,593 during the three months ended December 31,
2007. We have financed our operations through sales and placements of equity and
debt securities. We had $3,761,607 in cash as of December 31, 2008, an increase
of $2,588,589 from September 30, 2008. Working capital as of December 31, 2008
was $4,228,614 compared to working capital of $1,730,700 at September 30, 2008.
This increase in cash at December 31, 2008, was due to the Company's closing on
the $2,500,000 convertible debt obligation in October 2008 plus positive cash
flows generated from operating activities during the first quarter. The Company
incurred interest expense of $272,512 for the three months ended December 31,
2008 compared to interest of $51,258 for the three months ended December 31,
2007, an increase of $221,254, primarily due to the issuance of convertible
debt.
Financing Activities
Cash provided by financing activities was $2,170,555 for the three months ended
December 31, 2008, primarily as a result of convertible debt issued during the
period, compared to $606,095 for the three months ended December 31, 2007,
primarily as a result of the sale of common stock.
Outlook
The Company has built an infrastructure that it believes is capable of handling
a substantially higher sales volume at very low incremental cost, so that while
the Company's operating expenses and cash used in its operating activities are
anticipated to increase for the next twelve months at substantially reduced
levels as a percentage of revenues, the Company expects that its revenues will
increase significantly during that period through the implementation of its
advertising and marketing programs. Management believes that the outlook for the
demand for the Company's products and services is favorable, as there should be
an increase in newly-diagnosed patients requiring the medical supplies that the
Company provides. The Company does not anticipate any major changes in Medicare
reimbursement during the next nine months of 2009, nor in any other
reimbursement programs available from other third-party payors. We applied for
and were approved as a participating provider for Medicare Part B. A
participating provider is required to accept assignment for all Medicare
allowable charges.
We anticipate that our ability to continue our current rate of growth and meet
our cash requirements may continue to be dependent on our ability to complete
sales of our securities, obtain asset-based loans or security based debt. There
can be no assurance, of course, as to the amount or timing of any proceeds we
may receive from the sale of our securities, or whether the proceeds of such
sales will be sufficient, together with the cash provided from our operating
activities, to meet our operating expenses. However, we believe that existing
cash and cash equivalents, together with cash generated from the collection of
accounts receivable, the sale of products, and the proceeds, if any, of the sale
of our debt and equity securities will be sufficient to meet our cash
requirements during the next twelve months. Even if we do not obtain additional
funding from the sale of debt or equity, we believe our cash requirements can be
met beyond 12 months if we reduce our rate of growth.
Our current assets of $8,930,197 exceed our current liabilities of $4,701,583 by
$4,228,614.
Our plan for the next twelve months includes the following:
- Increase advertising;
- Increase our customer base;
- Continue to service our current customer base and increase the retention rate;
- Increase our accounts receivable collection efforts.
In order to implement our current business model, we have completed the
following:
• Identified and presented to many large funding sources, soliciting terms
for long-term capital in the form of debt, equity or a combination of both.
• Retained an investment banking firm to assist us in obtaining additional capital.
• Identified products and related target customers through extensive market research.
• Established efficient and cost effective methods to reach qualified customers.
• Established an infrastructure of management and knowledgeable staff to support substantial growth in sales with a minimal amount of additional staff members.
• Leased a 25,000 square foot facility which has only been built out 83 percent to accommodate our current operations including room for growth. The other 17 percent will be built out in stages as additional growth requires the additional office space. We also leased an additional 5,000 square foot facility next door to our current facility from our current landlord. We expect to build out this facility during the second quarter of FY 2009.
• Created a HIPPA compliant IT infrastructure and staff to accommodate additional growth in sales.
• Established a marketing plan that can be monitored for effectiveness and is flexible enough to adjust to changing market conditions.
• Tested our advertising methods and established methods of testing additional advertising methods to meet changing market conditions.
• Signed an agreement with a general contractor for a 5,515 square foot expansion of our current facility, which will provide space for enhanced call center operations for sales, operations, and customer support.
LMS will continue to operate as a federally licensed, direct-to-consumer, Part B
Benefits Provider, primarily focused on supplying medical supplies to
chronically ill patients.
Contractual Commitments
Capital expenditures for the three month period ended December 31, 2008, were
$29,177. As of December 31, 2008, the Company had known contractual obligations
of $9,757,706, comprised of current and long-term debt obligations, rent payable
on its principal office facility, and shareholder debt.
Off-Balance Sheet Arrangements
As of December 31, 2008, we had no off-balance sheet arrangements.
Certain Risk Factors
Our operating results are subject to various risks and uncertainties that could
cause our actual results and outcome to differ materially from those discussed
or anticipated. Reference is made to the risks and uncertainties described below
and in our Report on Form 10-KSB for the year ended September 30, 2008 (which
contains a more detailed discussion of the risks and uncertainties related to
our business). Readers should not place undue reliance on the forward-looking
statements contained in this Report on Form 10-Q, which reflect our beliefs and
expectations only as of the date of this Report. We assume no obligation to
update or revise these forward-looking statements to reflect new events or
circumstances or any changes in our beliefs or expectations, except as required
by law.
Some of the risks and uncertainties that might cause actual results to differ
from those anticipated include, but are not limited to the following:
• We have incurred significant net losses every year since the inception of
LMS.
• The Company has aggressive marketing plans that require the Company to spend substantial sums. The Company will need additional capital to continue its business plan.
• Our future operating results remain difficult to predict.
• Sales of a significant portion of our products depend on the continued availability of reimbursement of our customers by government and private insurance plans.
• Our ability to operate at a profit is highly dependent on recurring orders from customers, as to which there is no assurance.
• We may not be able to market our diabetes products or otherwise to operate our diabetes supply business segment at a profit because of marketing costs, competition, or other reasons not now foreseen.
• We could be liable for harm caused by products that we sell.
• Competition from other sellers of products sold by us is intense and expected to increase.
• If we or our suppliers do not comply with applicable government regulations, we may be prohibited from selling our products.
• We may make acquisitions that will strain our financial and operational resources.
In January 2008 we received notice that our common stock would not be eligible
for trading on the OTCBB for a minimum period of approximately one year because
our Company had failed to timely file its periodic reports under the Securities
Exchange Act of 1934 three times in a two year period. The Company appealed the
original notice but its appeal was rejected. Accordingly, commencing
February 14, 2008, our common stock started trading on the Pink Sheets and will
do so until the Company has filed periodic reports on a timely basis for twelve
months, at which time it can reapply to have its common stock traded on the
OTCBB, a process which we commenced in January 2009.
Critical Accounting Policies
See note "Summary of Significant Accounting Policies" in the Notes to the
Condensed Financial Statements and our current report on Form 10-KSB for the
year ended September 30, 2008, for discussion of significant accounting
policies, recent accounting pronouncements and their effect, if any, on the
Company.
Effect of Inflation
We do not believe that inflation has had a material effect on our business,
results of operations or financial condition during the past two years.
|
|