UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934



For the quarterly period ended 	September 30, 2001



Commission File Number:		1-12362



LIFEPOINT, INC.

(Exact name of registrant as specified in its charter)



DELAWARE				#33-0539168

(State or other jurisdiction of		(I.R.S. Employer

incorporation or organization)		Identification Number)



1205 South Dupont Street, Ontario, CA						91761

(Address of Principal Executive Offices)						(Zip Code)



(909) 418-3000

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.



Yes		 No





Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date.



As of October 31, 2001 - Common Stock, $.001 Par Value, 31,746,499 shares







|PART I                                                      
|------------------------------------------------------------
|FINANCIAL INFORMATION                                       
|                                                            
|Item 1. Financial Statements                                
|LIFEPOINT, INC.                                             
|(a development stage enterprise)                            
|BALANCE SHEET                                               
|                                                            
|                                                            
|                                                            
|ASSETS                                                      
|                                                            
|Current assets:                                             
|Cash and cash equivalents                                   
|Restricted cash - Series C escrow                           
|Prepaid expenses and other current assets                   
|Total current assets                                        
|Property and equipment, net                                 
|Patents and other assets, net                               
|                                                            
|LIABILITIES AND STOCKHOLDERS' EQUITY                        
|                                                            
|Current liabilities:                                        
|Accounts payable                                            
|Accrued expenses                                            
|Capital lease -short term                                   
|Total current liabilities                                   
|Capital lease - long term                                   
|Series C escrowed shares                                    
|                                                            
|Commitments and contingencies (Note 8)                      
|Stockholders' equity:                                       
|Series B 20% Cumulative Convertible Preferred Stock, $.001  
|par value, 600,000 shares authorized, no shares             
|outstanding at June 30, 2001                                
|Series C 10% Cumulative Convertible Preferred Stock, $.001  
|par value, 600,000 shares authorized, 393,916               
|outstanding at September 30, 2001                           
|Common stock, $.001 par value; 75,000,000 shares authorized,
|31,723,942 and 31,516,927 shares issued and outstanding at  
|September 30, 2001 and March 31, 2001, respectively         
|Additional paid-in capital                                  
|Note receivable - officers                                  
|Deficit accumulated in the development stage                
|Total stockholders' equity                                  
|                                                            

The accompanying notes are an integral part of the financial statements.

|LIFEPOINT, INC.                             
|--------------------------------------------
|(a development stage enterprise)            
|STATEMENTS OF OPERATIONS - RESTATED         
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|Revenues                                    
|                                            
|Costs and expenses:                         
|Selling, General and Administrative Expenses
|Research and Development                    
|Depreciation and Amortization               
|Interest Expense - Parent                   
|Management Fees - Parent                    
|                                            
|Total costs and expenses from operations    
|Loss from operations                        
|                                            
|Other Income/(Expense)                      
|Interest income (expense) net               
|Loss on disposal of property and equipment  
|Loss on sale of marketable securities       
|Interest income - parent                    
|                                            
|Total other income (expense)                
|                                            
|Net loss                                    
|                                            
|Less preferred dividends                    
|                                            
|Loss applicable to common stockholders      
|                                            
|Earnings per common share:                  
|Weighted average common shares outstanding  
|                                            
|Net loss per common share                   
|                                            
|Earnings per common share, assuming         
|dilution:                                   
|Weighted average common shares              
|outstanding                                 
|                                            
|Net loss per common share,                  
|assuming dilution                           



The accompanying notes are an integral part of the financial statements.

|                                                  |                                              | LIFEPOINT, INC.                     
|------------------------------------------------- | -------------------------------------------- | ------------------------------------
|                                                  |                                              | (a development stage enterprise)    
|                                                  |                                              | STATEMENTS OF CASH FLOWS            
|                                                  |                                              |                                     
|                                                  |                                              |                                     
|                                                  |                                              |                                     
|                                                  |                                              |                                     
|                                                  |                                              |                                     
|Operating Activities                              |                                              |                                     
|Net loss                                          |                                              | $ (5,676,246)                       
|Adjustments to reconcile net loss to net          |                                              |                                     
|                                                  | cash used by operating activities:           |                                     
|                                                  | Depreciation and amortization                |                                     
|                                                  | Interest paid on Series C funds              |                                     
|                                                  | Loss on disposal of property and equipment   | -                                   
|                                                  | Consulting expense                           |                                     
|                                                  | (Gain) loss on marketable securities         |                                     
|                                                  | Amortization of bond discount                |                                     
|                                                  | Changes in operating assets and liabilities: |                                     
|                                                  |                                              | Change in prepaid expenses and other
|                                                  |                                              | current assets                      
|                                                  |                                              | Change in other assets              
|                                                  |                                              | Change in accounts payable          
|                                                  |                                              | Change in accrued expenses          
|Net cash used by operating activities             |                                              | (5,195,316)                         
|Investing Activities                              |                                              |                                     
|Sale of marketable securities                     |                                              | -                                   
|Purchase of marketable securities                 |                                              | -                                   
|Purchases of property and equipment               |                                              | (600,915)                           
|Proceeds from sale of property and equipment, net | -                                            |                                     
|Additional patent costs                           |                                              | -                                   
|Net cash provided (used) by investing activities  | (600,915)                                    |                                     
|Financing Activities                              |                                              |                                     
|Sales of common stock                             |                                              | -                                   
|Expenses of common stock offering                 |                                              | -                                   
|Cancellation of Series B preferred stock          |                                              | (3,000,000)                         
|Sale of preferred stock                           |                                              | 13,787,085                          
|Series C cash in escrow                           |                                              | (6,217,470)                         
|Expenses of preferred stock offering              |                                              | (994,504)                           
|Exercise of stock options                         |                                              | 7,500                               
|Exercise of warrants                              |                                              | 45,000                              
|Payments of loan to parent                        |                                              | -                                   
|Proceeds of loan by parent                        |                                              | -                                   
|Proceeds of loan payable - parent                 |                                              | -                                   
|Payment of loan payable - parent                  |                                              | -                                   
|Proceeds of capital leases                        |                                              | -                                   
|Payments of capital leases                        |                                              | (175,584)                           
|Proceeds of brokerage loan payable                |                                              | -                                   
|Payments of brokerage loan payable                |                                              | -                                   
|Net cash provided (used) by financing activities  | 3,452,027                                    |                                     
|Increase (decrease) in cash and cash equivalents  | (2,344,204)                                  |                                     
|Cash and cash equivalents at beginning of period  | 6,227,894                                    |                                     
|Cash and cash equivalents at end of period        |                                              | $ 3,883,690                         

The accompanying notes are an integral part of the financial statements.







|                              |                                          | LIFEPOINT, INC.                      
|----------------------------- | ---------------------------------------- | -------------------------------------
|                              |                                          | (a development stage enterprise)     
|                              |                                          | STATEMENTS OF CASH FLOWS             
|                              |                                          |                                      
|                              |                                          |                                      
|                              |                                          |                                      
|                              |                                          |                                      
|                              |                                          |                                      
|                              |                                          |                                      
|Supplemental Disclosure of    |                                          |                                      
|                              | Cash Information:                        |                                      
|Cash paid for interest        |                                          | $ 78,300                             
|Noncash operating activities: |                                          |                                      
|                              | Value of common stock for                |                                      
|                              |                                          | consulting services                  
|Noncash investing activities: |                                          |                                      
|                              | Value of assets transferred to lessor    |                                      
|                              |                                          | in lieu of payment on capital leases 
|Noncash financing activities: |                                          |                                      
|                              | Value of common stock issued and         |                                      
|                              |                                          | additional paid-in capital for the   
|                              |                                          | transfer of assets from Parent       
|                              | Value of common stock issued to          |                                      
|                              |                                          | Parent and additional paid-in capital
|                              |                                          | for the forgiveness of debt          
|                              | Value of common stock warrants issued    |                                      
|                              |                                          | for consulting services              
|                              | Value of common stock issued and         |                                      
|                              |                                          | additional paid-in capital issued as 
|                              |                                          | interest on Series C final close     
|                              | Value of common stock issued and         |                                      
|                              |                                          | additional paid-in capital issued as 
|                              |                                          | dividends on preferred conversion    
|                              | Value of common stock warrants issued    |                                      
|                              |                                          | for preferred stock offering         
|                              | Value of preferred stock converted to    |                                      
|                              |                                          | common stock                         
|                              | Value of common stock warrants converted |                                      
|                              |                                          | to common stock in exchange for note 
|                              | Value of common stock options converted  |                                      
|                              |                                          | to common stock in exchange for note 
|                              | Value of common stock surrendered as     |                                      
|                              |                                          | payment on note                      
|                              |                                          |                                      





The accompanying notes are an integral part of the financial statements.



LIFEPOINT, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(Unaudited)

NOTE 1 - Basis of Presentation



In the opinion of LifePoint, Inc. (the "Company"), the accompanying unaudited financial statements reflect all adjustments (which include only normal recurring adjustments except as disclosed below) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year due to external factors that are beyond the control of the Company. This Report should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2001 (the "Annual Report").



Net Loss per Common Share -Restated



Net loss per common share is based upon the weighted average number of common shares outstanding during the periods reported. Common stock equivalents have not been included in this calculation because their inclusion would be anti-dilutive. The net loss per common share for the quarter ended September 30, 2001 has been restated to take into consideration the dividend on preferred stock.



NOTE 2. - Continuing Operations and Liquidity



During the period from October 8, 1992 (inception) through September 30, 2001, the Company has realized no revenues and has accumulated losses of $31,158,871. Recovery of the Company's assets is dependent upon future events, including commercialization of the Company's product and ultimately achieving profitable operations. The outcome of these events is indeterminable.



On August 28, 2000 the Company entered into a lease financing agreement with Finova Capital Corporation ("Finova") of Scottsdale, Arizona whereby Finova agreed to provide LifePoint with up to a $3,000,000 lease line for the purchase of equipment including up to $500,000 of leasehold improvements (at September 30, 2001, $1,249,930 had been drawn against the line). The master lease agreement provided for individual closing schedules of not less than $250,000 (up to three schedules could have had an aggregate closing cost of not less than $100,000) initiated on or before June 30, 2001. Each closing schedule has been financed for 36 months at a rate equal to the then current three-year U.S. Treasury Note. At the end of each schedule, LifePoint will have the option to purchase all (but not less than all) of the equipment at 15% of the original equipment cost. The Company was required to maintain a deposit of $900,000 with Finova in accordance with the master lease agreement. The Company met the requirements to have the deposit plus interest released by June 30, 2001. On October 10, 2001, Finova returned the deposit with interest.



In June 2001, the Company closed an initial round of a private placement and in September 2001, closed the final round of the private placement. The Company realized $12,792,681 in proceeds (net of $994,404 in expenses related to the private placement) from the sale of 393.916 Units, each Unit consisting of 1,000 shares of the Series C Preferred Stock and a Common Stock purchase warrant to purchase 10,000 shares of the Common Stock. The Company had previously realized $3,000,000 in gross proceeds from the sale of 75,000 shares of the then designated Series B Preferred Stock; however, the $3,000,000 purchase price for these shares was applied to purchase Units and the shares of Series B Preferred Stock were cancelled and the related Common Stock purchase warrants surrendered. As a result, management believes that the net proceeds from the two offerings will be sufficient to enable the Company to reach the period when the Company can reasonably expect to achieve profitability. However, if there are any additional delays in the Company meeting its timetable, the Company may require additional funding. In addition, because approximately 50% of the proceeds from the offering are held in escrow (for a total of approximately $6.2 million included in restricted cash) against the achievement by the Company of certain designated milestones, the Company could have to refund some or all of these proceeds held in escrow.

LIFEPOINT, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(Unaudited)

(Continued)



NOTE 2. - Continuing Operations and Liquidity (continued)



The Company has entered into a strategic partnering agreement with CMI, Inc. ("CMI") to distribute the Company's products exclusively to the law enforcement market. As part of this agreement, CMI will make payments of approximately $5 million to LifePoint over a two and one-half year period. Additionally, the Company continues to pursue additional strategic partnering in other markets for its first product; several large corporations have also expressed their initial interest in partnering with the Company. Management anticipates that an additional partnering agreement may be completed; however there can be no assurance when and if such arrangement will be made.



Management believes that, with the net proceeds from the private placement complemented with a portion of the strategic partnering fees described in the preceding paragraphs, the Company has sufficient funds to complete field trials and pilot studies, initiate marketing and reach profitability, expected to occur five quarters post product introduction. There can be no assurance that management's estimate as to costs and timing will be correct. Any further delays subsequent to those announced in early October may further increase the Company's costs.



NOTE 3 - Property and Equipment



Property and equipment is summarized as follows:





|                               | Estimated   | September 30, |  | March 31, 
|------------------------------ | ----------- | ------------- |  | ----------
|                               | Useful Life | 2001          |  | 2001      
|Furniture and Fixtures         | 3 - 7 years | $2,059,134    |  | $1,483,892
|Test Equipment                 | 5 - 7 years | 425,768       |  | 425,768   
|Leasehold Improvements         | 3 - 5 years | 1,349,064     |  | 1,324,340 
|                               |             | 3,833,966     |  | 3,234,000 
|Less: Accumulated Depreciation |             | 1,379,492     |  | 1,123,388 
|                               |             | $2,454,474    |  | $2,110,612



NOTE 4 - Commitments and Contingencies



Lease Commitments



LifePoint has entered into a lease agreement commencing October 1, 1997 and, extended by an amendment, terminating on June 30, 2004, for the research facilities in Rancho Cucamonga, California. In addition to rent of $72,000 per year for fiscal years through March 31, 2002, LifePoint will pay real estate taxes and other occupancy costs. The Company has an option to renew until June 30, 2005 so as to be consistent with the term of the lease described in the next paragraph.







LIFEPOINT, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(Unaudited)

(Continued)



NOTE 4 - Commitments and Contingencies (continued)



Lease Commitments (continued)



On April 26, 2000, the Company entered into a lease agreement for administrative offices and a manufacturing facility commencing May 1, 2000, which terminates on July 31, 2005. In addition to rent of $226,000 per year, LifePoint will pay for real estate taxes and other occupancy costs. The Company may elect to terminate the lease at the end of four years and has the right to two 2-year renewal options.



The Company leases certain equipment under noncancelable lease arrangements. These capital leases expire on various dates through 2004 and may be renewed for up to 12 months. Furniture, fixtures and equipment includes assets acquired under capital leases of $1,503,400 as of September 30, 2001.



Significant Contracts



Since October 1997, the Company has been the exclusive licensee from the United States Navy (the "USN") to use the USN's flow immunosensor technology to test for drugs of abuse and anabolic steroids on urine samples. Prior thereto, LifePoint was a sublicensee for the same technology under a license granted by the USN to the then parent of the Company. The license agreement (the "License Agreement") expires February 23, 2010, when the USN patent expires, including any reissues, continuation or division thereof.



In April 1999, the Company and the USN completed negotiations for an expansion of the License Agreement. The new terms expand the field-of-use from drugs of abuse and anabolic steroids on urine samples to include all possible diagnostic uses for saliva and urine. The royalty rate payable to the USN is 3% on the technology-related portion of the disposable cassette sales and 1% on instrument sales. The minimum royalty payment for calendar year 2001 and 2000 is $50,000 and $100,000, respectively. Minimum royalty payments are $100,000 a year thereafter. No amounts were paid or due for the fiscal years ended March 31, 2000 and 1999.



NOTE 5 - Stockholders'Equity



Series B Preferred Stock



On March 29, 2001, the Company sold an aggregate of 75,000 shares of the Company's Series B 20% Cumulative Convertible Preferred Stock, $.001 par value (the "Series B Preferred Stock). Each share was entitled to one vote and was convertible into 10 shares of the Company's Common Stock. Dividends were cumulative and payable annually at a rate of $.20 per share in year one, $.24 per share in year two, $.288 per share in year 3 and $2.40 per share thereafter. The dividends were payable in shares of Series B Preferred Stock for the first 3 years after the date of original issuance and in shares of Common Stock thereafter. The Series B Preferred Stock had preference in liquidation over all other forms of capital stock of the Company at a rate of $40 per share plus all accrued and unpaid dividends. If at any time after 18 months from the date of issuance, the Average Market Value of the Company's common stock, as defined in the agreement, was $8.00 or more per share for a period of 30 days, or if at any time after two years from the date of issuance the Market Value of the Company's Common Stock, as defined in the agreement, was $5.00 or more, the outstanding shares of Series B Preferred Stock would be converted into shares of Common Stock at the rate of 10 shares of Common Stock for every share of Series B Preferred Stock.





LIFEPOINT, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(Unaudited)

(Continued)



NOTE 5 - Stockholders' Equity (continued)



If certain events occurred, as defined in the agreement, any accrued and unpaid dividends were to be paid in Common Stock at the rate of $8.00 per share in the first year after issuance, $9.60 per share in the second year, $11.52 per share in the third year and at $2.40 per year thereafter.



Each holder of the Series B Preferred Stock was granted a Common Stock Purchase Warrant expiring March 28, 2006 to purchase 75,000 shares of the Common Stock at a price of $5.60 per share. No value was assigned to the warrants, as the resulting Black Scholes value was $3.04 for the underlying shares of our common stock. As of June 29, 2001, all shares of the Series B Preferred Stock were converted into Series C Preferred Stock and the Common Stock Purchase Warrants were replaced with new Common Stock Purchase Warrants



Series C Preferred Stock



On June 20, 2001, the Company sold, at $35,000 per Unit, to eleven investors (including three of the purchasers of shares of the Series B Preferred Stock) an aggregate of 228.007 Units. Each Unit consisted of 1,000 shares of a newly-designated series of the Preferred Stock designated the Series C Convertible Preferred Stock (the "Series C Preferred Stock") and a Warrant expiring June 19, 2006 (i.e., the "Investor Warrant") to purchase 10,000 shares of the Company's Common Stock, $.001 par value (the "Common Stock"), at $3.50 per share.



430,000 shares of the 3,000,000 authorized shares of the Company's Preferred Stock have been designated as the Series C Preferred Stock in order to cover not only the original sale by the Company, but also subsequent sales during the 90 days after the original issuance on June 20, 2001. On June 29, 2001, an additional 85.713 Units were exchanged for the Series B Preferred Stock as described above.



On September 28, 2001, the Company closed on an additional 80.196 Units at the same purchase price per Unit to sixteen accredited investors in the final closing of this private placement. As a result, the Company has sold an aggregate of 393.916 Units for gross proceeds of $13,787,085.



By agreement dated August 16, 2001, the Company and the investors unanimously agreed that a holder could convert a share of our Series C preferred stock at an initial conversion price of $3.00 (not $3.50) into 11.67 shares (not 10 shares) of our common stock. In addition, the exercise price of our investor warrants was reduced from $3.50 to $3.00 per share. A holder would also receive 11,670 shares, not 10,000 shares, upon exercise of an investor warrant included in a unit. Furthermore, the provision requiring quarterly resets of the exercise price of our investment warrants based on the market prices for our common stock during the first year was deleted. The changes to our Series C preferred stock were to become effective only if the related certificate of designation governing the terms and conditions was so amended. This action would have required the consent or approval of the holders of a majority of the outstanding shares of our common stock. It also would have given rise to a great expense to us. However, the investors agreed to waive the requirement of an amendment to the certificate of designation. They will instead rely on a contractual commitment by us to honor conversions on the basis set forth above. The Company is in the process of writing the contractual commitment document for the investors to sign. Such action is permitted by Delaware law, which governs our company.



There were outstanding, as of September 30, 2001, 393,916 shares of the Series C Preferred Stock and Investor Warrants to purchase an aggregate of 4,597,002 shares of the Common Stock. No value was assigned to the warrants, as the resulting Black Scholes value was $1.33 for the underlying shares of our common stock.



LIFEPOINT, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(Unaudited)

(Continued)



NOTE 5 - Stockholders' Equity (continued)



Pursuant to an escrow agreement, unless waived as indicated below, 50% of the proceeds, the shares of our Series C preferred stock and the investor warrants were to be held in escrow. They would be released upon achievement by our company of the following two milestones:



1. (i) confirmation that we had sold at least an additional 57 units for an aggregate of at least 370.720 units (which was completed in September 2001) and



1. receipt of validation from an independent third party that the IMPACT Test System produces data and functions as expected to be outlined in a 510(k) application to be submitted to the FDA, and



1. confirmation that we have received bona fide orders for the sale of the IMPACT Test System in an amount not less than $250,000.



Any holder of the Series C preferred stock ay, at any time, waive compliance with either milestone. Such a waiver releases from escrow the corresponding proceeds to the Company and the securities to the investor. Purchasers of 38.625 of the 80.196 units at the closing held on September 28, 2001 waived having their securities and their purchase price amounts held in escrow. Upon non-achievement of a milestone, a holder can request that its purchase price then held in escrow be refunded to the holder. In such event the related escrowed securities would be cancelled.



The Series C Preferred Stock is senior to any other series of the Preferred Stock hereafter designated and the Common Stock (collectively the "Junior Stock") with respect to dividends, upon redemption and upon liquidation. Except as may be consented to by the holders of at least a majority of the then outstanding shares of the Series C Preferred Stock, (1) no dividends or other distributions may be paid on the Junior Stock (other than dividends on the Common Stock in shares), (2) no shares of the Junior Stock may be redeemed; and (3) the Company may not distribute to the holders of the Junior Stock any assets upon liquidation, dissolution or winding up of the Company until the holders of the Series C Preferred Stock have received $35.00 per share (i.e., the Stated Value of a share of the Series C Preferred Stock) and any accumulated but unpaid Premium.



The holders of shares of our Series C preferred stock have no voting rights except as they are otherwise granted by the Delaware General Corporation Law. This statute provides a voting right to the holders of the Series C preferred stock if the action being voted upon by the holders of our common stock would adversely affect the rights of the preferred stockholders.



In certain default situations any holder of our Series C preferred stock may demand that we redeem, for cash, his, her or its shares at a specified redemption price, plus accrued and unpaid premium. An example of a default situation would be the Company's failure to make timely deliveries (after a grace period) of certificates for shares of our common stock following conversions of shares of our Series C preferred stock; the Company's material breach of the agreements with such purchasers (after a grace period to cure), or if the Company sells all of its assets, or merge where the Company is not the survivor. The Company feels that all of the above default provisions are within its control. In the case of a default (after a grace period) in fulfilling our obligations under a registration rights agreement with the purchasers, the Company would be required to make compensatory payments in cash or shares of its common stock, not redeem.



LIFEPOINT, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(Unaudited)

(Continued)



NOTE 5 - Stockholders' Equity (continued)



The Company may, at its option, redeem the shares of our Series C preferred stock at its stated value (i.e., $35.00 per share) plus accrued but unpaid premium, if the closing sales price of the Company's common stock is less than $3.50 per share for 11 or more consecutive trading dates. If the Company exercises this option, it must issue to a holder an investor warrant to purchase .875 of a share of the Company's common stock for each share of the Series C preferred stock redeemed.



The Company may also, at its option, redeem the shares of our Series C preferred stock at its stated value (i.e., $35.00 per share), plus accrued but unpaid premium, on and after June 20, 2004. The Company's common stock must be listed on the American Stock Exchange or the New York Stock Exchange or quoted on Nasdaq for the Company to redeem and the Company must not otherwise be in default.



In the event that the market price of the Common Stock for any ten consecutive trading days is at or above $7.50, $8.50, $9.50, $10.50 and $11.50, respectively, the Company can compel the holders to convert not more than 20% of the then outstanding shares of the Company's Series C preferred stock. Once the Company compels conversion at a trigger price, the Company can only compel conversion at the next higher trigger price.



During the quarter ended September 30, 2001, stock options were granted to nineteen employees to purchase 387,900 shares of the Common Stock at $2.95 per share. As of September 30, 2001, there were outstanding, under the two stock option plans, stock options to purchase an aggregate of 2,271,887 shares held by a total of 52 employees, 2 Scientific Advisory Board members, 7 Substance Abuse Advisory Board members and 4 non-employee directors.



During the quarter ended September 30, 2001, the Company issued warrants to an officer of the Company to purchase 300,000 shares of the Common Stock at $2.95 per share. As of September 30, 2001, there were warrants outstanding to purchase 13,757,171 shares of the Common Stock, including the warrants issued as part of the Series C Preferred Stock offering which raised approximately $13.8 million gross proceeds for the Company.









LIFEPOINT, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2001

(Unaudited)

(Continued)



NOTE 6 - New Accounting Pronouncements



In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method. In addition, companies are required to review goodwill and intangible assets reported in connection with prior acquisitions, possibly disaggregate and report separately previously identified intangible assets and possibly reclassify certain intangible assets into goodwill. SFAS No. 142 establishes new guidelines for accounting for goodwill and other intangible assets. In accordance with SFAS No. 142, goodwill associated with acquisitions consummated after June 30, 2001 is not amortized. The Company believes the adoption of this Statement will have no material impact on its financial statements.



In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143, addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement is effective for fiscal years beginning after June 15, 2002. The Company believes the adoption of this Statement will have no material impact on its financial statements.



In July 2001, the FASB issued SFAS No. 144, "Impairment or Disposal of Long-Lived Assets," which is effective for fiscal years beginning after December 15, 2001. The provisions of this statement provide a single accounting model for impairment of long-lived assets. The Company believes the adoption of this Statement will have no material impact on its financial statements.





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



General



The Company is a medical technology company that has designed, is manufacturing, and expects to soon be marketing the Impact Test System - a rapid diagnostic testing, screening, and therapeutic drug monitoring device for use in the workplace, home health care, ambulances, pharmacies and law enforcement. The Company is focused on the commercialization of the flow immunosensor technology licensed from the USN. This patented technology, when used in conjunction with the Company's own patented and proprietary technologies using saliva as a non-invasive test specimen, has allowed for the development of a broadly applicable non-invasive, rapid, on-site diagnostic test system. The first product being commercialized is for the simultaneous detection of drugs of abuse and alcohol, estimated to be over a $1.6 billion market by 2002.



Liquidity and Capital Resources.



The Company is a development stage enterprise with no earnings history. Since its inception, the Company has devoted substantially all of its resources to research and development and has experienced an ongoing deficiency in working capital. The Company does not anticipate generating revenue from product sales until the end of the fourth quarter of 2001 at the earliest. There can be no assurance as to when the Company will achieve profitability, if at all.



Because the Company has not produced any revenues as a result of its being a development stage company, it has been dependent, since gaining its independence from its former parent in October 1997, on the net proceeds derived from six private placements pursuant to Regulation D under the Securities Act of 1933, as amended (the "Securities Act"),to fund its operations. The succeeding three paragraphs describe the private placements in Fiscal 2000 and 2001.



On February 29 and March 14, 2000, the Company closed as to the sales at $5,000 per Unit of an aggregate of 1,840 units. Each unit consisted of 2,500 shares of the Common Stock and an Investor Warrant expiring February 28 or March 13, 2005 to purchase 2,500 shares of the Common Stock at $3.00 per share. The Company realized $9,200,000 in gross proceeds. Finders' fees were paid to various consultants and bankers for their assistance in helping the Company to complete this private placement consisting of an aggregate of $604,706 in cash fees and Finder's Warrants expiring March 13, 2005 to purchase an aggregate of 273,075 shares of the Common Stock at $3.00 per share. The Company's Form S-3 Registration Statement, File No. 333-65536 registering for resale the shares of common stock purchased in the placement and the shares underlying the warrants was declared effective on August 10, 2001.



As a result of the $9,200,000 in gross proceeds realized in the Company's private placement closed in February and March 2000, management believed, as the Company had previously announced, beginning in its Annual Report on Form 10-K for Fiscal 2000, that the Company had sufficient funds to complete the commercialization of its testing product and bring the same to market. However, as the Company had also previously reported, in its Annual Report on Form 10-K for Fiscal 2001, the Company also required additional funds to bridge the gap between the time the Impact Test System was first brought to market and the time the resultant revenues from sales of such product will result in profitability. As reported in Item 1 to this Report, in September 2001, the Company closed a private placement offering and realized approximately $13,000,000 in net proceeds from the sale of 393.916 Units, each Unit consisting of 1,000 shares of the Series C Preferred Stock and a Series C Warrant to purchase 10,000 shares of the Common Stock, subsequently amended as described in Note 5 to the financial statements. The Company had previously realized $3,000,000 in gross proceeds from the sale of 75,000 shares of the then designated Series B Preferred Stock. However, the $3,000,000 purchase price was used to purchase Units and the shares of the Series B Preferred Stock were cancelled and the Common Stock purchase warrants surrendered. As a result, management believes that the net proceeds from the two offerings, in conjunction with a portion of the exclusive marketing fee from CMI, and the proceeds from standard commercial banking lines which we intend to negotiate, will be sufficient to enable the Company to reach the period when the Company can reasonably expect to achieve profitability. However, if there are any additional delays in the Company meeting its timetable, the Company may require additional funding. In addition, if orders for our product come in faster than the Company anticipates, the Company could require additional financing to expand manufacturing, sales, and other capabilities. The Company's inability to meet any such increased demand could result in the cancellation of orders and thus delay the attainment of profitability.



In addition, because approximately 50% of the proceeds from the offering are held in escrow against the achievement by the Company of certain designated milestones, the Company could have to refund some or all of these proceeds held in escrow. The Company may, of course, seek contingent equity or debt financing against such an unanticipated event occurring.



Management believes that, with the net proceeds from the private placement described in the preceding paragraphs and the fees to be paid as described in the succeeding paragraph, the Company has sufficient funds to complete commercialization, generate field trials and pilot studies, initiate marketing and reach profitability, expected to occur five quarters post product introduction. There can be no assurance that management's estimate as to costs and timing will be correct. Any delays may further increase the Company's costs.



The Company has entered into a strategic partnering agreement with CMI, Inc. ("CMI") to distribute the Company's products exclusively to the law enforcement market. As part of this agreement, CMI will make payments of approximately $5 million to LifePoint over a two and one-half year period. Additionally, the Company continues to pursue additional strategic partnering for other markets. However, there can be no assurance when and if such arrangement will be made.



Management has investigated the possibility of an underwritten public offering and has received expressions of interest from several well-known firms, but only on a post-revenue basis. However, because the market currently is not generally receptive to public offerings, there can be no assurance that stock market conditions later in 2001 or 2002 will be receptive to a public offering by the Company, especially in view of the general volatility of the financial markets in 2000 and 2001. In addition, competitive conditions in the substance abuse testing industry at that time may make the Company less attractive to potential public investors. See the section "Competition" under the caption "Business" in the Annual Report.



There can be no assurance that the Company will be successful, if required, in securing additional financing, whether through a capital leasing firm, a strategic partner, a public offering or a private placement.



If all of the Common Stock Purchase Warrants to purchase an aggregate of 13,757,171 shares of the Common Stock which were outstanding on September 30, 2001 were subsequently exercised, the Company would realize up to $36,378,766 in gross proceeds. If all of the Options pursuant to the two Stock Option Plans to purchase an aggregate of 2,271,887 shares outstanding on September 30, 2001 were subsequently exercised, the Company would realize up to $6,551,458 in gross proceeds. However, there can be no certainty as to when or if any of these securities will be exercised, especially as to the Options and certain of the Warrants that were not all currently exercisable as of September 30, 2001. In addition, there may be cashless exercises with respect to certain of the Options and Warrants. Accordingly, management believes that the Company cannot rely on these exercises as a source of financing.



Results of Operations



Three Months Ended September 30, 2001 (2nd quarter) vs. Three Months ended June 30, 2001 (1st quarter).



During the quarter ended September 30, 2001, the Company spent $1,937,738 on research and development and an additional $1,069,815 on selling, general and administrative expenses, as compared with $1,625,995 and $765,544, respectively, during the last fiscal quarter ended June 30, 2001. The increase of $311,743, or 19%, in research and development expenditures in the 2nd quarter as compared to the 1st quarter was primarily attributable to increased costs for pilot manufacturing and costs associated with clinical trials for the IMPACT Test System. During the 2nd quarter general and administrative expenses increased $304,271, or 40% over the 1st quarter, as the Company geared up for its product launch with additional personnel hires in customer service, technical support, marketing and sales in addition to ad placements, and the development of marketing and sales materials.



Three Months Ended September 30, 2001 vs. September 30, 2000



During the quarter ended September 30, 2001, the Company spent $1,937,738 on research and development and an additional $1,069,815 on selling, general and administrative expenses, as compared with $1,184,039 and $525,407, respectively, during the quarter ended September 30, 2000. The increase of $753,699, or 63.7%, in research and development expenditures in 2001 was primarily attributable to the initiation of pilot manufacturing and clinical trials for the IMPACT Test System. Selling, general and administrative expenses increased $525,407, or 103.6%, as the Company prepared for its product launch with additional personnel hires in customer service, technical support, marketing and sales in addition to ad placements, marketing and sales materials, and attendance at various tradeshows. The Company is also continuing its lobbying efforts through the presentation of technical papers and working with various governmental agencies to set standards for the approval of a saliva-based evidential instrument. Other income/expense includes a decrease of $34,626 in interest income as a result of lower levels of average cash on hand for the quarter ended September 30, 2001, and an increase of $65,708 in interest expense as a result of higher average borrowings on outstanding lease agreements in 2001.





Six Months Ended September 30, 2001 vs. September 30, 2000



During the six months ended September 30, 2001, the Company spent $3,563,733 on research and development and an additional $1,835,359 on selling, general and administrative expenses, as compared with $2,281,463 and $976,292, respectively, during the six-month period ended September 30, 2000. The increase of $1,282,270, or 56.2%, in research and development expenditures in 2001 was primarily attributable to the initiation of pilot manufacturing and clinical trials for the IMPACT Test System. Selling, general and administrative expenses increased $859,067 or 87.9%, of which $614,250 was the result of an increase in sales and marketing expense. The increase represented the Company's preparation for product launch with additional personnel hires in customer service, technical support, marketing and sales in addition to ad placements, marketing and sales materials, and attendance at various tradeshows. Other income/expense includes a decrease of $153,229 in interest income as a result of lower levels of average cash on hand for the quarter ended September 30, 2001, and an increase of $96,686 in interest expense as a result of higher average borrowings on outstanding lease agreements in 2001.



From inception on October 8, 1992 to September 30, 2001, the Company has spent $18,029,334 on research and development and $9,572,803 on selling, general and administrative expenses. Management fees paid to the former parent aggregated an additional $2,089,838 during such period, none of which were paid after June 30, 1997.



Forward-Looking Statements



This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements which involve risk and uncertainties. Such forward-looking statements reflect management's current views that the necessary financing will be available, if needed, to bridge the gap between product launch and the attainment of profitability, that the product will be commercialized at the contemplated cost and within the projected timetable, that, during the interim period before the Company begins marketing, competitors will not begin to market a competitive saliva-based testing product and that the other risks described in the Annual Report and other filings by the Company with the Securities and Exchange Commission will not materially adversely affect the Company's operations. Because there can be no assurance that management's expectations will be realized, actual results may differ.



Item 3. Quantitative and Qualitative Disclosures about Market Risk.



Not applicable.

PART II

OTHER INFORMATION



Item 1.	Legal Proceedings



Reference is made to Item 3 of the Annual Report for information with respect to the legal action instituted by Global Consultants, LLC. On October 12, 2001, Global Consultants' counsel agreed to withdraw all causes of action for violations of the Securities Exchange Act of 1934 and the California Corporation Code relating to fraud, negligence and accounting and all claims for punitive or exemplary damages. The only remaining allegations are for breach of contract, conversion and violation of California Corporations Code Section 1507. The Company believes the plaintiff's remaining causes of action are without merit. The Company will continue to aggressively defend this action.



Item 2.	Changes in Securities































1. Placement Agent's and Finder's Warrants



1. As of September 28, 2001, the Company issued one Placement Agent Warrant expiring September 27, 2006 to purchase an aggregate of 32,756 shares of the Common Stock and two Finder's Warrants also expiring September 27, 2001 to purchase an aggregate of 9,336 shares of the Common Stock.
2. There were no underwriters and, accordingly, no underwriting discounts or commissions. The Placement Agent's Warrant was issued to the Placement Agent, while the Finder's Warrants were issued to APS Financial Services and Brada Mountain Capital Corp..
3. The Placement Agent's and the Finder's Warrants were issued in consideration of the holders' services in connection with finding the purchasers described above in (c)(1).
4. The Company claims that the issuances of the Placement Agent's and the Finder's Warrants were exempt under Section (4)(2) of the Securities Act as transactions not involving a public offering, each holder giving an investment representation.
5. The Placement Agent's and the Finder's Warrants are each exercisable at $3.00 per share.
6. Not applicable



Item 3.	Defaults upon Senior Securities



None



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



(a)	The Annual Meeting of Stockholders was held on September 7, 2001.



(b)	At the Meeting, Peter S. Gold was elected as a Class A director to serve until the Annual Meeting of Stockholders in 2003 and will serve until his successor is duly elected and qualified.



(c)	At the Meeting, votes were taken as to two proposals as follows:



(1) On the proposal to elect Peter S. Gold as a Class A director:

Broker

For			Withheld		Non-votes

26,035,137			136,383			 0



(2) On the proposal to ratify the appointment of Ernst & Young, LLP as independent auditors for the fiscal year ending March 31, 2002:

Broker

For			Against			Withheld	Non-votes

26,974,940			23,143			46,237		 0



(d) 	Not applicable.



Item 5.	Other Information



None





Item 6.	Exhibits and Reports on Form 8-K



1. Exhibits
2. Reports on Form 8-K



On October 1, 2001, the Company filed with the Securities and Exchange Commission a Current Report on Form 8K related to the Company's Letter to Shareholders, also dated October 1, 2001, regarding the Company's current status and the delay in product launch.









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 therein to be duly authorized.



LIFEPOINT, INC.

(Registrant)





Date: 	April 10, 2002				By /s/ Michele A. Clark

Michele A. Clark

Controller and Chief Accounting Officer,

and a duly authorized representative