UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q





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

ACT OF 1934



For the quarterly period ended 	June 30, 2002



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 August 8, 2002 - Common Stock, $.001 Par Value, 35,518,206 shares







|PART I                                                                                              
|----------------------------------------------------------------------------------------------------
|FINANCIAL INFORMATION                                                                               
|                                                                                                    
|Item 1. Financial Statements                                                                        
|LIFEPOINT, INC.                                                                                     
|BALANCE SHEET                                                                                       
|                                                                                                    
|                                                                                                    
|Current assets:                                                                                     
|Cash and cash equivalents                                                                           
|Accounts receivable, net of allowance of $70,000                                                    
|Inventory, net of reserve of $600,000 and $350,000 at
June 30, 2002 and March 31, 2002, respectively
|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                                                                            
|                                                                                                    
|Commitments and contingencies (Note 6)                                                              
|Stockholders' equity:                                                                               
|Series C 10% Cumulative Convertible Preferred Stock, $.001                                          
|par value, 600,000 shares authorized, 392,291 and 393,916                                           
|outstanding at June 30, 2002 and March 31,2002, respectively                                        
|Common Stock, $.001 par value; 75,000,000 shares                                                    
|authorized, 35,627,780 and 32,532,018 shares issued and                                             
|outstanding at June 30, 2002 and March 31, 2002, respectively                                       
|Additional paid-in capital                                                                          
|Notes receivable-officers                                                                           
|Retained deficit                                                                                    
|Total stockholders' equity                                                                          
|                                                                                                    

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







|LIFEPOINT, INC.                                             
|------------------------------------------------------------
|                                                            
|STATEMENTS OF OPERATIONS                                    
|(Unaudited)                                                 
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|Revenues                                                    
|                                                            
|Costs and expenses:                                         
|Cost of goods sold                                          
|Research and Development                                    
|Selling Expenses                                            
|General and Administrative Expenses                         
|                                                            
|Total costs and expenses from operations                    
|Loss from operations                                        
|                                                            
|Interest income (expense) net                               
|                                                            
|Total other income (expense)                                
|                                                            
|Net loss                                                    
|                                                            
|Less registration effectiveness fee to
Series C stockholders
|Less preferred dividends                                    
|                                                            
|Loss applicable to common shareholders                      
|                                                            
|Loss applicable to common stockholders                      
|per common share:                                           
|Weighted average common shares                              
|outstanding - basic and assuming dilution                   
|Net loss per share applicable to                            
|common stockholders                                         
|                                                            
|Net loss per common share                                   
|Weighted average common shares                              
|outstanding - basic and assuming dilution                   
|                                                            
|Net loss per common share                                   





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





|                                                 |                                                                                                                                   | LIFEPOINT, INC.                                    
|------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------
|                                                 |                                                                                                                                   | STATEMENTS OF CASH FLOWS                           
|                                                 |                                                                                                                                   | (unaudited)                                        
|                                                 |                                                                                                                                   |                                                    
|Operating Activities                             |                                                                                                                                   |                                                    
|Net loss                                         |                                                                                                                                   | (3,241,920)                                        
|Adjustments to reconcile net loss to net         |                                                                                                                                   |                                                    
|                                                 | cash used by operating activites:                                                                                                 |                                                    
|                                                 | Depreciation and amortization                                                                                                     |                                                    
|                                                 | Accounts Receivable Allowance                                                                                                     |                                                    
|                                                 | Inventory Reserve                                                                                                                 |                                                    
|                                                 | Changes in operating assets and liabilities:                                                                                      |                                                    
|                                                 |                                                                                                                                   | Accounts receivable                                
|                                                 |                                                                                                                                   | Inventories                                        
|                                                 |                                                                                                                                   | 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            |                                                                                                                                   | (4,719,891)                                        
|Investing Activities                             |                                                                                                                                   |                                                    
|Purchases of property and equipment              |                                                                                                                                   | (231,583)                                          
|Net cash used by investing activities            |                                                                                                                                   | (231,583)                                          
|Financing Activities                             |                                                                                                                                   |                                                    
|Sales of common stock                            |                                                                                                                                   | 10,200,000                                         
|Expenses of common stock offering                |                                                                                                                                   | (772,507)                                          
|Sales of preferred stock                         |                                                                                                                                   | -                                                  
|Series C cash in escrow                          |                                                                                                                                   | -                                                  
|Expenses of preferred stock offering             |                                                                                                                                   | -                                                  
|Cancellation of Series B preferred stock         |                                                                                                                                   | -                                                  
|Exercise of stock options                        |                                                                                                                                   | 25,834                                             
|Exercise of warrants                             |                                                                                                                                   | 30,510                                             
|Adjustment to previously issued common stock     |                                                                                                                                   | 8,811                                              
|Payments of capital leases                       |                                                                                                                                   | (129,832)                                          
|Net cash provided by financing activities        |                                                                                                                                   | 9,362,816                                          
|Increase (decrease) in cash and cash equivalents |                                                                                                                                   | 4,411,342                                          
|Cash and cash equivalents at beginning of period |                                                                                                                                   | 2,985,364                                          
|Cash and cash equivalents at end of period       |                                                                                                                                   | $ 7,396,706                                        
|                                                 |                                                                                                                                   |                                                    
|Supplemental Disclosure of Cash Information:     |                                                                                                                                   |                                                    
|Cash paid for interest                           |                                                                                                                                   | 22,921                                             
|Non-cash financing activities:                   |                                                                                                                                   |                                                    
|                                                 | Value of common stock and additional paid-in capital issued as dividend on preferred stock                                        |                                                    
|                                                 | Value of common stock and additional paid-in capital issued as payment of registration effectiveness fee to Series C stockholders |                                                    
|                                                 | Value of common stock options converted to common stock in exchange for note                                                      |                                                    



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

LIFEPOINT, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2002

(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, 2002 (the "Annual Report").



NOTE 2. - Summary of Significant Accounting Policies



Reclassification

Certain amounts have been reclassified to conform to the current year financial statement presentation.



Inventories

Inventories are priced at the lower of cost or market using the first-in, first-out (FIFO) method.



Allowance for Doubtful Accounts

As of June 30, 2002 and March 31, 2002, the Company recorded a $70,000 allowance for doubtful accounts.



NOTE 3. - Continuing Operations and Liquidity



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 December 31, 2001, $1,249,930 had been drawn against the line). 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 $13,787,000 in gross proceeds (less $1,258,955 in expenses related to the private placement) from the sale of 393.916 Units. Each Unit consisted of 1,000 shares of the Series C Preferred Stock and a common stock purchase warrant to purchase 11,670 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 of the Series C Preferred Stock and the shares of the Series B Preferred Stock were cancelled and the related common stock purchase warrants surrendered.



On April 2, 2002, the Company sold 272 units, at $37,500 per unit, to eight accredited investors. Each unit consisted of 10,000 shares of the Common Stock and a common stock purchase warrant expiring April 1, 2007 to purchase 2,000 shares of the Common Stock at $4.50 per share. The Company realized $10,200,000 in gross proceeds and incurred $772,507 in expenses from the private placement.



LIFEPOINT, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2002

(Unaudited)



NOTE 3. - 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 marketFees will be calculated and paid in accordance with the confidential terms of the agreement. There are no conditions for the Company to meet other than the delivery of product to receive the fees. CMI has minimum, confidential, sales requirements for the three-year term of the contract in order to retain the exclusive marketing rights. 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 believes that, with the net proceeds from the private placement complemented with a portion of the strategic partnering fees described in the preceding paragraph and the proceeds from standard banking lines of credit and/or commercial equipment leasing lines which the Company is currently negotiating, the Company should have sufficient funds to reach profitability, expected to occur during fiscal 2004. There can be no assurance that management's estimate as to costs and timing will be correct. Any further delays in achieving its operations goals may further increase the Company's costs.



NOTE 4 - INVENTORY



Inventory is summarized as follows:





|                             |  | June 30,   |  | March 31, 
|---------------------------- |  | ---------- |  | ----------
|                             |  | 2002       |  | 2002      
|Raw Materials                |  | $2,038,920 |  | $ 940,959 
|Work in Process              |  | 2,063,109  |  | 803,434   
|                             |  | 4,102,029  |  | 1,744,393 
|Less: Reserve for impairment |  | 600,000    |  | 350,000   
|                             |  | $3,502,029 |  | $1,394,393





NOTE 5 - Property and Equipment



Property and equipment is summarized as follows:





|                               | Estimated   | June 30,   |  | March 31, 
|------------------------------ | ----------- | ---------- |  | ----------
|                               | Useful Life | 2002       |  | 2002      
|Furniture and Fixtures         | 3 - 7 years | $2,394,408 |  | $2,183,102
|Test Equipment                 | 5 - 7 years | 425,768    |  | 425,768   
|Leasehold Improvements         | 3 - 5 years | 1,373,329  |  | 1,353,052 
|                               |             | 4,193,505  |  | 3,961,922 
|Less: Accumulated Depreciation |             | 1,762,394  |  | 1,639,409 
|                               |             | $2,431,111 |  | $2,322,513





LIFEPOINT, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2002

(Unaudited)



NOTE 6 - Commitments and Contingencies



Lease Commitments



LifePoint 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, 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.



On April 26, 2000, the Company entered into a lease agreement for administrative offices and manufacturing facility commencing May 1, 2000, which terminates on July 31, 2005. In addition to rent of $226,000 per year, LifePoint will pay 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 lease also allowed for rent abatement in three of the first twelve months as a tenant improvement allowance in addition to the $30,000 paid by the lessor.



The Company leases certain equipment under non-cancelable lease arrangements. These capital leases expire on various dates through 2004 and may be renewed for up to 12 months. Furniture, fixtures and equipment included assets acquired under capital leases of $1,503,400 as of June 30, 2002. Accumulated depreciation for assets under capital lease was $64,427 and $59,591 for the quarters ended June 30, 2002 and 2001, respectively. See Note 5 - Property and Equipment.



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 License Agreement may be terminated by the USN in the event the Company files bankruptcy or is forced into receivership, willfully misstates or omits material information, or fails to market the technology. Either party may terminate the agreement upon mutual consent. 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 of $100,000 for calendar years 2002 and 2001 was paid and no amounts were paid or due for the fiscal year ended March 31, 2000. Minimum annual royalty payments are due each year thereafter.



On June 4, 2001, the Company and CMI, Inc. ("CMI"), a wholly-owned subsidiary of the employee-owned MPD Inc. based in Owensboro, Kentucky, entered into a renewable, three-year agreement establishing CMI as the exclusive distributor of the IMPACT® Test System to the law enforcement market in the United States and Canada. Fees will be calculated and paid in accordance with the confidential terms of the agreement. There are no conditions for the Company to meet other than the delivery of product to receive the fees. CMI has minimum, confidential, sales requirements for the three-year term of the contract in order to retain the exclusive marketing rights. CMI will sell, and provide service and training for, the IMPACT Test System to the law enforcement market, including, driver testing, corrections, probation and parole, narcotics and drug courts.



LIFEPOINT, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2002

(Unaudited)



NOTE 6 - Commitments and Contingencies (continued)



The three-year term of the agreement did not begin until general marketing of our IMPACT Test System began on February 26, 2002. CMI will benefit from volume discounts and, therefore, the Company's margins on products purchased by CMI may decrease over the term of the contract. In addition, CMI has guaranteed pricing on the instruments, which may result in much lower margins once the Company transfers the instrument production to an outside vendor. The agreement with CMI is automatically renewable unless CMI or the Company gives notice to the other 180 days prior to the end of the initial term.



NOTE 7 -Stockholders' Equity



Common Stock



On April 2, 2002, the Company sold 272 units, at $37,500 per unit, to eight accredited investors. Each unit consisted of 10,000 shares of the Common Stock and a common stock purchase warrant expiring April 1, 2007 to purchase 2,000 shares of the Common Stock at $4.50 per share. The Company realized $10,200,00 in gross proceeds and incurred $772,507 in expenses related to the private placement from the sale of 2,720,000 shares of common stock. The Company has closed this offering and no further units will be offered.



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 the 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.



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 common stock purchase warrant expiring June 19, 2006 (the "Investor Warrant") to purchase 10,000 shares of the Company's Common Stock at $3.50 per share.



430,000 shares of the 3,000,000 authorized shares of the Company's Preferred Stock were 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 $13,787,060.



LIFEPOINT, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2002

(Unaudited)

NOTE 7 - Stockholders' Equity (continued)



Series C Preferred Stock (continued)



By agreement dated August 16, 2001, the Company and the investors unanimously agreed that a holder could convert a share of the Series C Preferred Stock at an initial conversion price of $3.00 (not $3.50) into 11.67 shares (not 10 shares) of the Common Stock. In addition, the exercise price of the 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 the Investor Warrants based on the market prices for the Common Stock during the first year was deleted. The changes to the 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 the Common Stock. It also would have given rise to a great expense to the Company. However, the investors agreed, as of November 21, 2001, to waive the requirement of an amendment to the certificate of designation. They will instead rely on a contractual commitment by the Company to honor conversions on the basis set forth above. Such action is permitted by Delaware law, which governs the Company.



Pursuant to an escrow agreement, unless waived, 50% of the proceeds from the sale of Series C preferred stock and the investor warrants were to be held in escrow pending achievement by the Company of certain milestones. As of March 22, 2002, the Company confirmed to the escrow agent achievement of the milestones. Accordingly, all proceeds have been released to the Company and the investors have received all of their securities held in escrow.



To assist the Company in bridging the gap between December 31, 2001 and receiving the escrowed funds, on February 1, 2002, General Conference Corporation of Seventh-day Adventists, the Company's largest stockholder and one of the investors with escrowed purchase proceeds and securities, loaned the Company $1,500,000. The loan was paid in full from the first escrow release along with interest of $10,685 or 5%. The Company also issued a warrant to the General Conference Corporation to purchase 500,000 shares of the Common Stock at $3.25 per share.



On the last date of each of the Company's fiscal quarters, commencing September 30, 2001, in which shares of the Series C Preferred Stock are outstanding, the Company is required to redeem all accrued and unpaid dividends as of such date. Dividend is paid at 10% per year through June 30, 2004 and 5% per year thereafter. The Company elects to pay the redemption of dividend by the issuance of a number of shares of Common Stock to each holder of the Series C Preferred Stock. The number of shares of common stock to be issued is calculated by dividing the aggregate amount of dividend then due on the shares of the Series C preferred stock by the market price on such date. Market price is calculated as the average closing sales price for the twenty trading days preceding the close of the quarter. For the quarter ended June 30, 2002 the Company redeemed $343,523 through the issuance of 132,891 shares of Common Stock.



As a result of the Company's registration statement not being declared effective by January 2002, the Company was obligated to pay an effectiveness registration penalty fee. The total fee due to the Series C stockholders was $780,700, of which $367,000 was recognized in fiscal 2002. The Company issued 191,294 shares of Common Stock in May 2002 and an additional 68,938 in July 2002 in payment of this fee.



As of June 30, 2002, there were 392,291 shares of the Series C Preferred Stock and Investor Warrants to purchase an aggregate of 4,597,002 shares of the Common Stock outstanding. During the quarter ended June 30, 2002, two holders converted an aggregate of 1,625 shares of the Series C Preferred Stock into 18,964 shares of Common Stock.



LIFEPOINT, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2002

(Unaudited)



NOTE 8 - 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, 2002 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, effective fiscal years beginning after December 15, 2001, 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, 2002 is not amortized. Adoption of this Statement resulted in no material impact on the 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. Adoption of this Statement resulted in no material impact on the financial statements.



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



Until December 2001, the Company had been a development stage enterprise with no revenue history. Until recently, the Company has devoted substantially all of its resources to research and development and has experienced an ongoing deficiency in working capital. The Company has just begun generating revenue from product sales. There can be no assurance as to when the Company will achieve profitability, if at all.



Prior to December 2001, the Company had not produced any revenues as a result of its being a development stage company. The Company had been dependent on the net proceeds derived from seven private placements pursuant to Regulation D under the Securities Act to fund its operations. The succeeding three paragraphs describe the private placements in fiscal 2000, 2001 and 2002.



On February 29 and March 14, 2000, the Company closed as to sales at $5,000 per unit of an aggregate of 1,840 units, each unit consisting of 2,500 shares of the Common Stock and a common stock purchase warrant expiring February 28 or March 13, 2005 to purchase 2,500 shares of Common Stock at $3.00 per share. The Company realized $9,200,000 in gross proceeds (less $623,080 in expenses related to the private placement). 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 common stock purchase warrants expiring March 13, 2005 to purchase an aggregate of 273,075 shares of the Common Stock at $3.00 per share.



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 $13,787,085 in gross proceeds (less $1,092,278 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 11,670 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 of the Series C Preferred Stock and the shares of Series B Preferred Stock were cancelled and the related common stock purchase warrants surrendered.



On April 2, 2002, the Company sold 272 units, at $37,500 per unit, to eight accredited investors. Each unit consisted of 10,000 shares of the Common Stock and a common stock purchase warrant expiring April 1, 2007 to purchase 2,000 shares of the Common Stock at $4.50 per share. The Company realized $10,200,00 in gross proceeds and incurred $772,507 in expenses related to the private placement from the sale of 2,720,000 shares of common stock. The Company has closed this offering and no further units will be offered.



As a result, management believes that the net proceeds from the offerings, together with the marketing fees and sales proceeds forecasted to be paid from CMI, the proceeds from standard commercial banking lines of credit and/or commercial equipment leasing lines which the Company is currently negotiating and certain other sources of funds, should be sufficient to enable the Company to reach the period when the Company can reasonably expect to achieve profitability. There can be no assurance that management's estimate as to costs and timing will be correct. However, if there are any additional delays in the Company meeting its timetable, the Company may require additional funding.



The Company has entered into a strategic partnering agreement with CMI to distribute the Company's products exclusively to the law enforcement market. Based on its initial forecasts, CMI will make payments of approximately $5 million to LifePoint over a two and one-half year period. However, there can be no assurance that CMI will make payments approximating that amount. Fees will be calculated and paid in accordance with the confidential terms of the agreement. There are no conditions for the Company to meet other than the delivery of product to receive the fees. CMI has minimum, confidential, sales requirements for the three-year term of the contract in order to retain the exclusive marketing rights.



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 in 2002 will be receptive to a public offering by the Company, especially in view of the general volatility of the financial markets in 2001and 2002. In addition, competitive conditions may make the Company less attractive to potential public investors.



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.



On March 6, 2000 and June 16, 2000, the Compensation Committee authorized that executive officers and senior staff designated as significant employees, who are optionees under the LifePoint, Inc. 1997 Stock Option Plan ("the 1997 Option Plan") and the 2000 Option Plan, respectively, or who hold Common Stock purchase warrants may exercise an option or a warrant by delivering a promissory note (the "Note") to the order of the Company. As of June 30, 2002, Notes totaling $912,500 were due to the Company with various due dates from September 14, 2006 through February 27, 2007 bearing interest rates ranging from 6% to 9%. All Notes have a term of eighteen months. A detailed list of the Notes due from Officers and senior staff may be found in Item 13 Certain Relationships and Related Transactions in the Company's Annual Report on Form 10-K. All other notes previously issued have been fully repaid, including interest payments.



If all of the common stock purchase warrants that were outstanding on June 30, 2002 were subsequently exercised (14,028,488 shares), the Company would realize $39,151,502 in gross proceeds. If all of the options pursuant to the Company's two Stock Option Plans to purchase an aggregate of 3,222,517 shares outstanding on June 30, 2002, were subsequently exercised, the Company would realize $7,569,641 in gross proceeds. However, there can be no certainty as to when and if any of these securities may be exercised, especially as to the options, which were not all currently exercisable as of June 30, 2002. Accordingly, management believes that the Company cannot rely on these exercises as a source of financing.



Operating Cash Flows



Net cash used for operations during the first quarter ended June 30, 2002 amounted to $4,720,000 as compared to $2,870,000 for the quarter ended June 30, 2001. The cash used by operating activities in the first quarter of fiscal 2003 increased by $1,850,000 from the same period in fiscal 2002, which was the result of increased staffing and inventory build-up associated with the commercialization of the IMPACT Test System.



Investing Cash Flows



During this first quarter of fiscal 2003, net cash used by investing activities was $232,000, compared to $366,000 for the same period in fiscal 2002. The $134,000 decrease in cash used in first quarter of fiscal 2003 over first quarter of fiscal 2002 was related to the addition of furniture and equipment to the manufacturing facility in fiscal 2002.



Financing Cash Flows



Net cash provided by financing activities amounted to $9,363,000 during the first quarter of fiscal 2003 related to the seventh private placement of common stock with gross proceeds of $10,200,000 and proceeds from the exercise of warrants and options of $56,000.



Net cash provided by financing activities amounted to $2,267,000 during fiscal 2002 primarily related to the initial close of the sixth private placement of 393,916 shares of the Company's Series C Preferred Stock with net proceeds of $10,980,000 less the redemption of the Series B Preferred Stock or $7,980,000. Proceeds of $5,490,000 from the Series C Preferred Stock placement were held in escrow until March 2002 at which time the Company met its milestone obligations and the proceeds were released to the Company. An additional $48,000 was received from the exercises of stock options and warrants.



Results of Operations



Three Months Ended June 30, 2002 vs. June 30, 2001

As discussed in press releases and conference calls, the Company was in a backorder situation during the quarter ended June 30, 2002. This backorder resulted from the decision to incorporate final modifications to the instrument and cassettes prior to filling additional orders. The total backlog of sales at the end of June was approximately $860,000. As a result, no revenue was recorded. The Company recognized $256,566 as a cost of sales expense in the quarter ended June 30, 2002 as a reserve against inventory



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



During the quarter ended June 30, 2001, the Company spent $1,728,595 on research and development, $424,106 on selling expense and an additional $346,838 on general and administrative expenses, as compared with $1,140,174, $119,575 and $333,560, respectively, during the quarter ended June 30, 2000. The increase of $588,421, or 52%, in research and development expenditures in 2001 was primarily attributable to the initiation of pilot manufacturing and development of the IMPACT Test System. Selling expenses increased $304,531 as the Company prepared for product launch with ad placements, marketing materials and attendance at various tradeshows. The Company continued 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 General and administrative expenses increased $13,278, or 4%, as a result of increased staffing. Company-wide employee count for the quarter ended June 30, 2001 increased 82% in comparison to the same period in 2000.



Forward-Looking Statements



Some of the information in this Report may contain forward-looking statements. These statements can be identified by the use of forward-looking terminology such as "may," "will," "expect," "anticipate," "estimate," "continue" or other similar words. These statements discuss future expectations, contain projections of results of operations or of financial condition or state other "forward looking" information. When considering forward-looking statements, a stockholder or potential investor in LifePoint should keep in mind the risk factors and other cautionary statements in the Company's Annual Report on Form 10-K. Forward-looking statements could involve known and unknown risks, uncertainties and other factors that might materially alter the actual results suggested by the statements. In other words, although forward-looking statements may help to provide complete information about future prospects, the Company's performance may be quite different from what the forward-looking statements imply. The forward-looking statements are made as of the date of this Report and LifePoint undertakes no duty to update these statements.



Inflation



The Company believes that inflation has not had a material effect on its results of operations.



Critical Accounting Policies



The Company's accounting policies are more fully described in the Annual Report in Note 1 of Notes to the Financial Statements. As disclosed in Note 1 of Notes to the Financial Statements, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.



The Company believes the following critical accounting policies are important to the portrayal of the Company's financial condition and results.



Allowance for Doubtful Accounts



The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company's customers or distribution partners were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.



Inventory



Significant management judgment is required to determine the reserve for inventory. The Company currently considers all inventory costs determined by the first-in, first-out (FIFO) method, including material, labor and factory overhead in comparison to market value. At June 30, 2002, the Company's inventory reserve was $600,000, or 15% of its $4,102,000 gross inventory.



Revenue Recognition

The majority of the Company's revenue is expected to be from the sales of the IMPACT Test System. The Company recognizes revenue in the period in which products are sold. Revenue is recognized in accordance with the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101 provides guidance on the recognition, presentation and disclosure of revenue in financial statements.



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.



Item 2.	Changes in Securities



(a)	Not applicable



(b)	Not applicable



(c)	The following securities which were not registered upon issuance pursuant to the Securities Act of 1933, as amended (the "Securities Act"), were issued during the quarter ended June 30, 2002, although the underlying shares of the Common Stock were registered under the Securities Act in the Company's Registration Statement on Form S-3, File No. 333-96939, for resale by the holders, which Registration Statement was declared effective July 30, 2002:



1. Shares of Common Stock and Investor Warrants



(a)	See Note 5 to Financial Statements in Part I of this Report for information as to the issuance of these securities.



1. There were no underwriters and, accordingly, no underwriting discounts or commissions. Gruntal and Co. LLP (the "Placement Agent") acted as placement agent for this private placement. The securities were sold to seven entities an one individual who or which qualified as accredited investors as such term is defined in Rule 501(a) of Regulation D under the Securities Act.



(c)	The Company realized $10,200,000 in gross proceeds from this offering.





1. The Company claims that the offering was exempt from registration pursuant to Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder in that these were transactions by an issuer not involving any public offering, the sales being to accredited investors, each of which gave an investment representation.



(e)	The Investor Warrants are exercisable initially at $4.50 per share



1. Not applicable



1. Placement Agent's and Finder's Warrants





(a)	As of April 2, 2002, the Company issued one Placement Agent's Warrant and one Finder's Warrant expiring April 1, 2007 to purchase an aggregate of 210,500 shares of the Common Stock.



(b)	There were no underwriters and, accordingly, no underwriting discounts or

commissions. The Placement Agent's Warrants were issued to the Placement Agent, while the Finder's Warrants were issued to Wells Fargo Van Kasper LLP.



(c)	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).

1. 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.
2. The Placement Agent's and the Finder's Warrants are each exercisable at $4.50 per share.



(f)	Not applicable



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 and Reports on Form 8-K



Exhibits



None



Reports on Form 8-K



On April 19, 2002, the Company filed with the Securities and Exchange Commission a Current Report on Form 8K related to the Company's Letter to Stockholders, dated April 18, 2002, regarding the Company's current status.



On July 17, 2002, the Company filed with the Securities and Exchange Commission a Current Report on Form 8K related to the Company's Letter to Stockholders, dated July 16, 2002, regarding the Company's current status



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: 	August 19, 2002				By /s/ Linda H. Masterson

Linda H. Masterson

Chief Executive Officer

and duly authorized representative



By /s/ Michele A. Clark

Michele A. Clark

Controller and Chief Accounting Officer

and duly authorized representative







CERTIFICATION

Pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002 (18 U.S.C. s 1350, as adopted), Linda H. Masterson, the Chief Executive Officer of LifePoint, Inc. (the "Company"), and Michele A. Clark, the Chief Accounting Officer of the Company, each hereby certifies that, to the best of her knowledge:

1. The Company's Quarterly Report on Form 10-Q for the period ended June 30, 2002, to which this Certification is attached as Exhibit 99.1 (the "Periodic Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report.



Dated:	August 19, 2002



/s/ Linda H. Masterson		                            /s/ Michele A. Clark

Linda H. Masterson		                                  Michele A. Clark

Chief Executive Officer		                                  Chief Accounting Officer