10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

ü	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended: November 30, 2015
or
	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

———————

LESCARDEN, INC.

(Exact name of registrant as specified in its charter)

———————

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)

———————

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.				ü	Yes		No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files).					Yes		No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer		Accelerated filer
Non-accelerated filer	(Do not check if a smaller	Smaller reporting company				ü
	reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
					Yes	ü	No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class			Outstanding January 12, 2016
Common Stock $.001 par value			63,622,316

TABLE OF CONTENTS

	Page
PART I – FINANCIAL INFORMATION
Item 1.         Financial Statements.	1
Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4
Item 3.        Quantitative and Qualitative Disclosures About Market Risk.	6
Item 4.        Controls and Procedures.	6
PART II – OTHER INFORMATION
Item 1.         Legal Proceedings.	7
Item 1A.      Risk Factors.	7
Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds.	7
Item 3.         Defaults Upon Senior Securities.	7
Item 4.        Submission of Matters to a Vote of Security Holders.	7
Item 5.         Other Information.	7
Item 6.         Exhibits.	7

PART I - FINANCIAL INFORMATION

Item 1.         Financial Statements.

LESCARDEN INC.

CONDENSED BALANCE SHEETS (UNAUDITED)

	November 30, 2015			May 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	7,347		$	37,207
Accounts receivable		1,640			48,902
Inventory		85,770			83,586
Total current assets		94,757			169,695
Deferred income tax asset, net of valuation allowance of $1,659,000 and $1,630,000 at November 30, 2015 and May 31, 2015 respectively		––			––
Total assets	$	94,757		$	169,695
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	182,536		$	172,846
Shareholder loan		268,765			268,765
Total liabilities		451,301			441,611
Stockholders' deficit
Convertible preferred stock - $.02 par value, authorized 2,000,000 shares, issued and outstanding 92,000 shares		1,840			1,840
Common stock - $.001 par value, authorized 200,000,000 shares, 63,622,316 issued and outstanding at November 30, 2015 and May 31, 2015		63,622			63,622
Additional paid-in capital		17,505,936			17,505,936
Accumulated deficit		(17,927,942	)		(17,843,314	)
Stockholders' deficit		(356,544	)		(271,916	)
Total liabilities and stockholders' deficit	$	94,757		$	169,695

See notes to financial statements

LESCARDEN INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

	For the three months Ended November 30,					For the six months Ended November 30,
	2015			2014		2015			2014
Revenues:
Product sales	$	10,422		$	165,023	$	42,519		$	171,270
License fees		––			1,500		––			3,000
Total revenues		10,422			166,523		42,519			174,270
Costs and expenses:
Cost of sales		1,411			42,078		2,815			43,309
Salaries		20,527			13,838		41,259			41,099
Professional fees and consulting		9,700			24,297		49,165			60,209
Rent and office expense		5,555			31,187		8,947			62,400
Insurance		7,178			12,933		20,125			24,801
Commission		––			10,743		––			10,743
Other administrative expenses		1,366			12,464		4,836			13,210
Total costs and expenses		45,737			147,540		127,147			255,771
Net (loss) income	$	(35,315	)	$	18,983	$	(84,628	)	$	(81,501	)
Net (loss) income per share – basic and diluted	$	(0.00	)	$	0.00	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding – basic and diluted		63,622,316			63,622,316		63,622,316			63,622,316

See notes to financial statements

LESCARDEN INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the six months Ended November 30,
	2015			2014
Cash flows from operating activities:
Net loss	$	(84,628	)	$	(81,501	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable		47,262			(157,490	)
(Increase) decrease in inventory		(2,184	)		25,324
Increase in accounts payable and accrued expenses		9,690			85,486
Decrease in deferred license fees		—			(3,000	)
Net cash used in operating activities		(29,860	)		(131,181	)
Cash flows from financing activities:
Proceeds from shareholder loan		—			129,000
Cash provided by financing activities		—			129,000
Decrease in cash		(29,860	)		(2,181	)
Cash - beginning of period		37,207			10,432
Cash – end of period	$	7,347		$	8,251

See notes to financial statements

LESCARDEN INC .

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

November 30, 2015

Note 1 - General:

The accompanying condensed 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, 2015. The results of operations for the interim periods are not necessarily indicative of results to be expected for a full year's operations.

Note 2 – Going Concern:

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 six months ended November 30, 2015, 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 its ability to maintain consistent production volumes to fulfill existing sales orders.  Alternative sources of supply are being evaluated so that manufacturing and production disruptions can be minimized. There can be no assurance that the Company will be able to establish an alternative source of supply and maintain consistent production volumes to meet demand.

Note 3 – Inventory:

At November 30, 2015, inventory of $85,770 consisted of $34,059 of finished goods and $51,711 of raw materials.

Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations:

The results of operations for the three and six month periods ended November 30, 2014 reflect decreased sales and operating losses due to an ongoing production outage. Preliminary testing of product samples from an alternative supplier suggests that the Company will be able to resume production operations within the next six months.   Regulatory certification of the new suppler is required prior to product shipment which could further delay the fulfillment of existing purchase orders after the resumption of production operations.  Revenues for the six-months ended November 30, 2015 consisted solely of sales of skin-care and nutritional supplements

Three months ended November 30, 2015 compared to November 30, 2014

Skin care and nutritional supplement product sales decreased by $1,130 or 9.78% for the three months ended November 30, 2015 compared to November 30, 2014.

Non-direct costs and expenses during the three months ended November 30, 2014 were $61,136 or 58% lower than those of the comparative prior-year period due to decreases in rent expense, professional fees, other administrative expenses and insurance of $25,632, $14,597, $11,098 and $5,755 respectively offset by increased payroll expenses of 48% or $6,689.

Six months ended November 30, 2015 compared to November 30, 2014

Decreased Catrix sales of $153,472 for the six months ended November 30, 2015 resulted in an increase in the net loss for the six months ended November 30, 2015 of $3,127 compared to November 30, 2014.

Liquidity and Capital Resources

As of November 30, 2015, the Company’s liabilities exceeded its assets by $356,544. The Company’s cash and cash equivalents balance decreased by $29,860 in the six months ended November 30, 2015 to $7,347.

The Company has no material commitments for capital expenditures at November 30, 2015.

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.

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.

None

Item 3.         Defaults Upon Senior Securities.

None.

Item 4.         Submission of Matters to a Vote of Security Holders.

None.

Item 5.         Other Information.

None.

Item 6.         Exhibits.

Exhibit No.	Description
31	Certification pursuant to Exchange Act Rule 13a – 14 (a)/15d-14(a)
32	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

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: January 12, 2016

/s/ William E. Luther

William E. Luther

Chief Executive and Chief Financial Officer

EX-31

Exhibit 31

CERTIFICATION

I, William E. Luther, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Lescarden Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 12, 2016
	/s/ William E. Luther
	William E. Luther
	Chief Executive and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Lescarden Inc. (the "Company") on Form 10Q for the period ended November 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William E. Luther, Chief Executive and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: January 12, 2016
	/s/ William E. Luther
	William E. Luther
	Chief Executive and Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Nov. 30, 2015	Jan. 12, 2016
Document And Entity Information
Entity Registrant Name	LESCARDEN INC
Entity Central Index Key	0000058822
Document Type	10-Q
Document Period End Date	Nov. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--05-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		63,622,316
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2016

XML

Balance Sheets - USD ($)	Nov. 30, 2015	May. 31, 2015
Current assets
Cash and cash equivalents	$ 7,347	$ 37,207
Accounts receivable	1,640	48,902
Inventory	85,770	83,586
Total current assets	94,757	169,695
Deferred income tax asset, net of valuation allowance of $1,659,000 and $1,630,000 at November 30, 2015 and May 31, 2015 respectively	0	0
Total assets	94,757	169,695
Current liabilities
Accounts payable	182,536	172,846
Shareholder loan	268,765	268,765
Total liabilities	451,301	441,611
Stockholders' deficit
Convertible preferred stock - $.02 par value, authorized 2,000,000 shares, issued and outstanding 92,000 shares	1,840	1,840
Common stock - $.001 par value, authorized 200,000,000 shares, 63,622,316 issued and outstanding at November 30, 2015 and May 31, 2015	63,622	63,622
Additional paid-in capital	17,505,936	17,505,936
Accumulated deficit	(17,927,942)	(17,843,314)
Stockholders' deficit	(356,544)	(271,916)
Total liabilities and stockholders' deficit	$ 94,757	$ 169,695

XML

Balance Sheets (Parenthetical) - USD ($)	Nov. 30, 2015	May. 31, 2015
ASSETS:
Deferred income tax valuation allowance	$ 1,659,000	$ 1,630,000
Stockholders equity:
Preferred stock, par value	$ 0.02	$ 0.02
Preferred stock, authorized shares	2,000,000	2,000,000
Preferred stock, issued shares	92,000	92,000
Preferred stock, outstanding shares	92,000	92,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	200,000,000	200,000,000
Common stock, issued shares	63,622,316	63,622,316
Common stock, outstanding shares	63,622,316	63,622,316

XML

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Revenues:
Product sales	$ 10,422	$ 165,023	$ 42,519	$ 171,270
License fees	0	1,500	0	3,000
Total revenues	10,422	166,523	42,519	174,270
Costs and expenses:
Cost of sales	1,411	42,078	2,815	43,309
Salaries	20,527	13,838	41,259	41,099
Professional fees and consulting	9,700	24,297	49,165	60,209
Rent and office expense	5,555	31,187	8,947	62,400
Insurance	7,178	12,933	20,125	24,801
Commission	0	10,743	0	10,743
Other administrative expenses	1,366	12,464	4,836	13,210
Total costs and expenses	45,737	147,540	127,147	255,771
Net loss (income)	$ (35,315)	$ 18,983	$ (84,628)	$ (81,501)
Net (loss) income per share - basic and diluted	$ (0.00)	$ 0.00	$ (0.00)	$ (0.00)
Weighted average number of common shares outstanding - basic and diluted	63,622,316	63,622,316	63,622,316	63,622,316

XML

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2015	Nov. 30, 2014	Nov. 30, 2015	Nov. 30, 2014
Cash flows from operating activities:
Net loss	$ (35,315)	$ 18,983	$ (84,628)	$ (81,501)
Adjustments to reconcile net loss to net cash used in operating activities:
Decrease (increase) in accounts receivable			47,262	(157,490)
(Increase) Decrease in inventory			(2,184)	25,324
Increase in accounts payable and accrued expenses			9,690	85,486
Decrease in deferred license fees			0	(3,000)
Net cash used in operating activities			(29,860)	(131,181)
Cash flows from financing activities:
Proceeds from shareholder loan			0	129,000
Cash provided by financing activities			0	129,000
Decrease in cash			(29,860)	(2,181)
Cash, beginning of period			37,207	10,432
Cash, end of period	$ 7,347	$ 8,251	$ 7,347	$ 8,251

XML

1. General

6 Months Ended

Nov. 30, 2015

Accounting Policies [Abstract]

1. General

The accompanying condensed 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, 2015. The results of operations for the interim periods are not necessarily indicative of results to be expected for a full year's operations.

XML

2. Going Concern

6 Months Ended

Nov. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

2. Going Concern

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 six months ended November 30, 2015, 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 its ability to maintain consistent production volumes to fulfill existing sales orders.  Alternative sources of supply are being evaluated so that manufacturing and production disruptions can be minimized. There can be no assurance that the Company will be able to establish an alternative source of supply and maintain consistent production volumes to meet demand.

XML

3. Inventory

6 Months Ended

Nov. 30, 2015

Inventory Disclosure [Abstract]

3. Inventory

At November 30, 2015, inventory of $85,770 consisted of $34,059 of finished goods and $51,711 of raw materials.

XML

3. Inventory (Details Narrative) - USD ($)	Nov. 30, 2015	May. 31, 2015
Inventory Details Narrative
Inventory	$ 85,770	$ 83,586
Finished goods	34,059
Raw materials	$ 51,711