SECURITIES AND EXCHANGE COMMISSION

Washington DC 20549

FORM 10-QSB

Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934

For Quarter Ended August 31, 2003           Commission File No. 0-5920

LANCER ORTHODONTICS, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)

         CALIFORNIA                               95-2497155
(State or Other Jurisdiction of               (I.R.S. Employer
 Incorporation or Organization)               Identification No.)

253 Pawnee Street, San Marcos, California 92069
(Address of Principal Executive Offices)

Issuer's telephone number, including area code:  (760) 744-5585

Check whether the issuer:  (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act 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    X                 No

Indicate by check mark whether registrant is an accelerated filer, as
defined in Rule 12b-2 of the Exchange Act.

     Yes                      No    X

State the number of shares outstanding of each of the issuer's classes of
common equity, as of July 29, 2003:  2,196,224

Transitional small business disclosure format (check one):

     Yes    X                 No













LANCER ORTHODONTICS, INC.

FORM 10-Q

QUARTERLY REPORT

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION
                                                                      Page(s)
Item 1   Financial Statements (Unaudited)
           Condensed Consolidated Balance Sheet                          3
           Condensed Consolidated Statements of Operations               4
           Condensed Consolidated Statements of Cash Flows               5
           Notes to Condensed Consolidated Financial Statements       6-17

Item 2   Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                       17-18

Item 3   Quantitative and Qualitative Disclosures about Market Risk     19

Item 4   Procedures and Controls                                        20

PART II - OTHER INFORMATION

Item 1   Legal Proceedings                                              20
Item 2   Changes in Securities and Use of Proceeds                      20
Item 3   Defaults upon Senior Securities                                20
Item 4   Submission of Matters to a Vote of Security Holders            20
Item 5   Other Information                                              20
Item 6   Exhibits and Reports on Form 8-K                               20
Signature                                                               20

























PART I.  FINANCIAL INFORMATION
Item 1.  FINANCIAL STATEMENTS (UNAUDITED)

LANCER ORTHODONTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
08/31/03

ASSETS
CURRENT ASSETS:
  Cash                                                             $287,748
  Accounts receivable, less allowances for sales
    returns and doubtful receivables of $99,858                     901,656
  Inventories, net of reserve of $152,225                         1,773,547
  Related party receivables                                           9,443
  Prepaid expenses                                                   66,690
  Other receivables                                                  21,028
    Total current assets                                          3,060,112

PROPERTY AND EQUIPMENT, at cost                                   2,758,939
  Less:  Accumulated depreciation                                (2,393,108)
                                                                    365,831
INTANGIBLE ASSETS:
  Marketing and distribution rights, net                             29,050

OTHER ASSETS                                                         47,051
      Total assets                                               $3,502,044

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                 $270,300
  Accrued payroll and related benefits                              169,293
  Accrued professional fees                                          52,657
  Accrued Royalties                                                  20,754
  Other current liabilities                                           9,430
  Line of credit                                                        421
    Total current liabilities                                       522,855

COMMITMENTS AND CONTINGENCIES                                            --

STOCKHOLDERS' EQUITY:
  Preferred stock, various series; 750,000 shares authorized;
    no shares issued and outstanding                                     --
  Common stock, no par value; 50,000,000 authorized;
    2,196,224 shares issued and outstanding                       4,844,345
  Common stock subscribed, 78,846 shares subscribed                  24,000
  Accumulated deficit                                            (1,889,156)
    Total stockholders' equity                                    2,979,189
      Total liabilities and stockholders' equity                 $3,502,044








LANCER ORTHODONTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (UNAUDITED)

                                                FOR THE THREE MONTHS ENDED
                                                 8/31/03           8/31/02

NET SALES                                      $1,318,107        $1,285,499

COST OF SALES                                     975,267           923,580

  Gross Profit                                    342,840           361,919

OPERATING EXPENSES:
  Selling                                         344,946           282,101
  General & Administrative                        111,019           110,263
  Product Development                              32,502            15,186

TOTAL OPERATING EXPENSES                          488,467           407,550

LOSS FROM OPERATIONS                             (145,627)          (45,631)

OTHER INCOME (EXPENSE):
  Interest Expense                                     --            (3,572)
  Other Income (Expense), net                       5,412            46,272

TOTAL OTHER INCOME (EXPENSE)                        5,412            42,700

LOSS BEFORE INCOME TAXES                         (140,215)           (2,931)

INCOME TAXES                                           --                --

NET LOSS                                         (140,215)           (2,931)

OTHER COMPREHENSIVE INCOME                             --                --

COMPREHENSIVE LOSS                              $(140,215)          $(2,931)


NET LOSS PER WEIGHTED AVERAGE OF COMMON SHARES

Weighted average number of common shares        2,266,476         2,196,233

BASIC                                               $(.06)            $(.00)

Weighted average number of shares used in
  calculation of diluted earnings per share     2,266,476         2,196,233

DILUTED                                             $(.06)            $(.00)








LANCER ORTHODONTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                    FOR THE THREE MONTHS ENDED
                                                        8/31/03     8/31/02

Cash flows from operating activities:
  Net loss                                            $(140,215)    $(2,931)
  Adjustments to reconcile net loss to net
    cash (used in) provided by operating activities:
    Depreciation and amortization                        11,461      24,117
    Provision for losses on accounts receivable          (5,142)      1,136
    Provision for losses on inventory                    15,000      15,000
    Common stock issued in lieu of salary                 3,750       5,250
    Net change in operating assets and liabilities:
      Accounts receivable                               202,926      80,577
      Inventories                                       (39,531)     52,980
      Related part receivables                            4,447          --
      Prepaid expenses                                  (11,204)      5,044
      Insurance claim receivable                             --      81,758
      Other receivables                                  (1,497)         --
      Accounts payable                                 (126,562)   (139,250)
      Accrued payroll and related benefits               28,142      13,852
      Other current liabilities                         (13,818)      8,835

Net cash (used in) provided by operating activities     (72,243)    146,368

Cash flows from investing activities:
  Purchases of property and equipment                  (147,760)     (2,064)
  Other assets                                           (3,651)         --

Net cash used in investing activities                  (151,411)     (2,064)

Cash flows from financing activities:
  Net decrease in line of credit                            ( 5)    (64,461)

Cash flows used in financing activities                     ( 5)    (64,461)

Net change in cash                                     (223,659)     79,843

Cash, beginning of period                               511,407     128,585

Cash, end of period                                    $287,748    $208,428

Supplemental disclosure of cash flow information:
  Cash paid for:
    Interest                                                $--      $3,572

  The Company issued 20,000 shares of common stock
    valued at $7,000 for services to be rendered            $--      $7,000







LANCER ORTHODONTICS, INC.
Notes to Condensed Consolidated Financial Statements

(A) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-QSB and
therefore do not include all information and notes necessary for a fair
presentation of consolidated financial position, results of operations, and
cash flows in conformity with generally accepted accounting principles. The
unaudited condensed consolidated financial statements include the accounts
of Lancer Orthodontics, Inc. (the "Company" or "Lancer") and its wholly-
owned subsidiary Lancer Orthodontics de Mexico.  The consolidated operating
results for interim periods are unaudited and are not necessarily an
indication of the results to be expected for the full fiscal year.  In the
opinion of management, the results of operations as reported for the interim
periods reflect all adjustments which are necessary for a fair presentation
of operating results.

Reference is made to Note 2 of the Notes to the Consolidated Financial
Statements contained in Lancer's Annual Report on Form 10-KSB for the fiscal
year ended May 31, 2003, for a summary of significant accounting policies
utilized by Lancer.

(B) Organization

Lancer Orthodontics, Inc. was incorporated on August 25, 1967, in the state
of California, for the purpose of engaging in the design, manufacture, and
distribution of orthodontic products.  Lancer has a manufacturing facility
in Mexico where a majority of its inventory is manufactured (Note G).  The
facility is incorporated and is a wholly-owned and consolidated subsidiary
of Lancer.  This subsidiary now also administers services previously
provided by an independent manufacturing contractor. The conversion had no
material effect on manufacturing operations. Lancer also purchases certain
orthodontic and dental products for purposes of resale.  Sales are made
directly to orthodontists world-wide through Company representatives and
independent distributors.  Lancer also sells certain of its products on a
private label basis.

The Company is a partially owned and consolidated subsidiary of Biomerica,
Inc. ("Biomerica").  Biomerica's direct ownership percentage of Lancer is
31.12% and its direct and indirect (via agreements with certain shareholders)
voting control over Lancer is greater than 50% as of August 31, 2003.

(C) Use of Estimates in the Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP"), requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenues and expenses during the
reporting period.  Significant estimates made by Lancer's management
include, but are not limited to, allowances for doubtful accounts,
allowances for sales returns, valuation of inventories, realizeability of
property and equipment through future operations.  Actual results could
materially differ from those estimates.

LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

(D) Stock Based Compensation

In December 2002, the FASB issued FAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which amended FAS No. 123
"Accounting for Stock-Based Compensation." The new standard provides
alternative methods of transition for a voluntary change to the fair value
based method of accounting for stock-based employee compensation.
Additionally, the statement amends the disclosure requirements of FAS No.
123 to require prominent disclosures in the annual and interim financial
statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. This
statement is effective for financial statements for fiscal years ending
after December 15, 2002. In compliance with FAS No. 148, we have elected to
continue to follow the intrinsic value method in accounting for our stock-
based employee compensation plan as defined by APB No. 25, "Accounting for
Stock Issued to Employees".

The Black Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable.  In addition, option valuation models require the input
of highly subjective assumptions including the expected stock price
volatility.  Because the Company's employee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its
employee stock options.  For purposes of pro forma disclosure, the estimated
fair value of the options is amortized to expense over the options vesting
period. Adjustments are made for options forfeited prior to vesting.  The
effect on compensation expense, net loss, and net loss per common share
had compensation costs for the Company's stock option plans been determined
based on a fair value at the date of grant consistent with the provisions of
SFAS 148, for the quarter ended August 31, 2003 as follows:

August 31,                                                   2003      2002

Net loss, as reported                                    $(140,215)  $(2,931)
Add:   Stock-based employee compensation expense                --        --
Less:  Stock-based employee compensation expense
       determined under fair value calculations            (14,218)       --

Net income (loss) pro forma                              $(154,433)  $(2,931)

Basic income per share, as reported:                        $(0.06)   $(0.00)
Add:   Stock-based employee compensation expense recorded       --        --
Less:  Stock-based employee compensation expense
       determined under fair value calculations              (0.01)       --

Pro forma                                                   $(0.07)   $(0.00)


Notes to Condensed Consolidated Financial Statements - continued

Diluted income per share, as reported:                      $(0.06)   $(0.00)
Add:   Stock-based employee compensation expense recorded       --        --
Less:  Stock-based employee compensation expense
       determined under fair value calculations              (0.01)       --

Pro forma                                                   $(0.07)   $(0.00)

(E) Property and Equipment

Costs in construction in progress consist of two projects, a new product
line and a new information system.  Costs capitalized into the new product
line at August 31, 2003 were $197,706 with approximately $130,000 in
additional costs estimated to complete the project.  Costs capitalized into
the new information system are $41,158 with approximately $30,000 in
additional costs estimated to complete the project.

(F) Line of Credit

At August 31, 2003, Lancer has a $400,000 line of credit with GE Capital
Healthcare Financial Services through October 24, 2003.  Borrowings are made
at prime plus 2.0%, however not less than 8.0%, (8.0% at August 31, 2003)
and are limited to 80% of accounts receivable less than 90 days old with a
liquidity factor of 94%.  The outstanding balance at August 31, 2003, is
$421 and the unused portion available is approximately $271,000.  Lancer is
in compliance with its debt covenants at August 31, 2003.

The line of credit is collateralized by substantially all the assets of
Lancer, including inventories, receivables, and equipment.  The lending
agreement for the line of credit requires, among other things, that Lancer
maintain a tangible net worth of $2,100,000 and that receivables payments
be sent to a controlled lockbox.  In addition to interest, a management fee
of 0.25% of the average monthly outstanding loan balance and an unused
balance fee of .0425% on the average monthly unused portion available are
required.  Lancer is not required to maintain compensating balances
in connection with this lending agreement.

Future financing options are being explored.

(G) Commitments and Contingencies

In May 1990, Lancer entered into a manufacturing subcontractor agreement
whereby the subcontractor agreed to provide manufacturing services to Lancer
through its affiliated entities located in Mexicali, B.C., Mexico. Effective
April 1, 1996, Lancer leased the Mexicali facility under a separate
agreement.  In November 1998, Lancer extended the manufacturing agreement
through October 2000.

During fiscal 2002, the facility in Mexico was incorporated as Lancer
Orthodontics de Mexico, ("Lancer de Mexico"), a wholly-owned subsidiary of
the Company.  This subsidiary now administers services previously provided
by an independent manufacturing contractor.  A new lease was negotiated in
the name of Lancer de Mexico, effective April 1, 2001, for the 16,000
square foot facility already in use for the Mexican operations.  Mexican
utilities and vendor obligations were also converted to the Lancer de
Mexico name. This conversion eliminated the expense of an administrative

LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

(G) Commitments and Contingencies - continued

fee and is expected to provide better control in meeting future obligations.
The conversion had no material effect on manufacturing operations. The
potential impact for the use of our own facility, in terms of a corporate
entity with legal standing in Mexico, is that over a fiscal year Lancer would
save approximately $100,000 in service fees over a Mexican contracted
corporate entity. Should Lancer discontinue operations in Mexico, it is
responsible for accumulated employee seniority obligations as prescribed by
Mexican law.  At August 31, 2003, this obligation was approximately $350,000.
Such obligation is contingent in nature and accordingly has not been accrued
in Lancer's consolidated financial statements.

Leases - Lancer leases its corporate facility under a non-cancelable
operating lease expiring December 31, 2003, as extended, which requires
monthly rentals that increase annually, from $2,900 per month in 1994 to
$6,317 per month in 2004. The lease expense is being recognized on a
straight-line basis over the term of the lease. The excess of the expense
recognized over the cash paid aggregates $2,232 at August 31, 2003, and is
included in accrued liabilities in the accompanying consolidated balance
sheet. Total rental expense for this facility for the three months ended
August 31, 2003, was approximately $17,000.

Effective December 1, 2002, Lancer Orthodontics de Mexico entered into a non-
cancelable operating lease for its Mexico facility through March 31, 2009.
The new lease encompasses the approximately 16,000 square feet of the
previous lease, plus additional square footage of approximately 10,000 feet,
for a total of approximately 26,000 square feet.  Lancer Orthodontics de
Mexico will provide sub-contracted manufacturing services to Biomerica,
Inc., a related party, using a portion of the additional square footage.
The new lease requires four monthly lease payments of approximately $5,300
through March 2003, and seventy-two monthly payments of approximately $9,600
through March 2009.  An agreement has been negotiated between Lancer
Orthodontics de Mexico and Biomerica for lease reimbursement of
approximately $2,000 per month.  The remainder of approximately $7,600
monthly lease will be borne by Lancer.  Total rental expense for this
facility for the three months ended August 31, 2003, was approximately
$25,000.

The new Lancer Orthodontics de Mexico lease also requires an additional
refundable security deposit of $26,550, payable over twelve months beginning
January 2003.  Lancer Orthodontics, Inc. is paying half and Biomerica, Inc.
the other half.  At August 31, 2003, other assets on the consolidated
balance sheet includes approximately $47,000 for security deposit paid on
the Mexico location.







LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

(G) Commitments and Contingencies - continued

At May 31, 2003, future aggregate minimum lease payments are as follows:

     Years ending May 31,
     2004                     $173,950
     2005                      132,003
     2006                      131,148
     2007                      129,438
     2008                      127,767
     2009                      105,776
          Total               $800,082

A sub-lease agreement for approximately 459 square feet of Lancer's main
facility was entered into in April 2003, effective through November 2003
with an unrelated third party.  The leased space is to be used for a machine
shop and requires monthly payments of $344.  Rental income for the three
months ended August 31, 2003 was $1,032.

Employment Agreement - Pursuant to the terms of the employment agreement
between the Company and Dan Castner, the Vice President of Sales and
Marketing of the Company, dated as of May 20, 2003, the Company agreed to
pay Mr. Castner an annual base salary of $135,000.  In addition, the Company
granted Mr. Castner stock options on June 2, 2003, to purchase an
aggregate of 120,000 shares of the Company's common stock at an exercise
price of $0.43 per share.  The stock options have a term of five years and
will vest over four years as follows: (i) 25% vesting on the first
anniversary of the date of the grant; (ii) 25% vesting on the second
anniversary of the date of the grant; (iii) the remaining 50% vesting as
to one-twenty fourth (1/24th) per month each month thereafter for the next
two years.  Should the Company be purchased by an unaffiliated third party,
the options shall vest 100%.

Common Stock - Lancer's stock is traded on the OTC Bulletin Board.

(H) Income Taxes

At May 31, 2003, Lancer had net tax operating loss carryforwards of
approximately $2,059,000 and business tax credits of approximately $64,000
available to offset future Federal taxable income and tax liabilities,
respectively.  The Federal carryforwards expire in varying amounts through
the year 2021.  As of May 31, 2003, Lancer had net tax operating loss
carryforwards of approximately $70,000 and business tax credits of
approximately $10,000 available to offset future state income tax
liabilities.  The state carryforwards expire through the year 2011.








LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

(I) Stockholders' Equity

Stock Option Agreements

Under the 2000 Stock Incentive Plan (the "Plan"), the Company is authorized
to grant stock options to key employees, officers, and directors of the
Company (or its parent corporation), non-employee members of the Board of
Directors of the Company (or its parent), and consultants who provide
valuable services to the Company.  Any options outstanding at date of
plan termination will remain in effect.  Under the plan, 450,000 shares
have been authorized for grant or issuance.  Stock options granted under
the Plan shall be granted at an option price not less than 85% of the fair
market value for options granted to employees, or less than 100% of the
fair market value for options granted to non-employees.  The fair market
value of the stock is as of the date the option is granted.  Most options
granted under the Plan to date expire five (5) years from the date of their
respective grant and all were granted at fair market value at the date of
grant.  Options granted prior to May 31, 1995, generally vested on the date
of grant and expired through August 1999.

During the year ended May 31, 2002, the Company granted 20,000 options to
purchase shares of the Company's common stock at an exercise price of $0.40
to an employee of the Company for services rendered.  The options have a
term of one year.  Management recorded $0 intrinsic value with respect to
these options.

During the year ended May 31, 2002, the Company granted 113,000 options to
purchase shares of the Company's common stock at an exercise price of $0.30
to its' Chief Executive Officer in lieu of salary.  The options vest over
three years and have a term of five years.  Management recorded $0
intrinsic value with respect to these options.

During the year ended May 31, 2003, the Company granted 70,000 options to
purchase shares of the Company's common stock at an exercise price of $0.26
to certain employees of the Company for services rendered. The options vest
over four years and have a term of five years. Management recorded $0
intrinsic value with respect to these options.

During the year ended May 31, 2003, the Company granted 40,000 options to
purchase shares of the Company's common stock at an exercise price of $0.28
to an employee of the Company for services rendered. The options vest over
four years and have a term of five years. Management recorded $0 intrinsic
value with respect to these options.

During the year ended May 31, 2003, the Company granted 30,000 options to
purchase shares of the Company's common stock at an exercise price of $0.28
to certain employees of the Company for services rendered. The options vest
over four years and have a term of five years. Management recorded $0
intrinsic value with respect to these options.




LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

(I) Stockholders' Equity - continued

On June 2, 2003, the Company granted 120,000 stock options to purchase
shares of the Company's common stock at an exercise price of $0.43 per share
as pursuant to terms of the employment agreement between the Company and Dan
Castner, the Vice President of Sales and Marketing.  The options vest over
four years and have a term of five years. Management recorded $0 intrinsic
value with respect to these options.

On June 2, 2003, the Company granted 52,500 stock options to purchase shares
of the Company's common stock at an exercise price of $0.43 per share to
directors of the Company for services rendered.  The options vest over two
years and have a term of five years. Management recorded $0 intrinsic value
with respect to these options.

On June 2, 2003, the Company granted 75,000 stock options to purchase shares
of the Company's common stock at an exercise price of $0.43 per share to its
Chief Executive Officer in lieu of salary.  The options vest over three
years and have a term of five years. Management recorded $0 intrinsic value
with respect to these options.

SFAS 148 Pro Forma Information

The following summary presents the options granted, exercised, expired, and
outstanding as of August 31, 2003:
                                                               Weighted
                                                                Average
                         Number of Shares                      Exercise
                      Employee   Non-employee       Total         Price

Outstanding,
May 31, 2003           428,500        2,000        430,500        $0.53

Granted                247,500           --        247,500        $0.43
Exercised                   --           --             --           --
Expired                     --           --             --           --

Outstanding,
August 31, 2003        676,000        2,000        678,000        $0.49

(J) Net Loss per Common Share and Dividends

Lancer calculates earnings per share in accordance with Statement of
Financial Accounting Standards ("SFAS 128").  SFAS 128 replaces the
presentation of primary and fully diluted earnings per share with the
presentation of basic and diluted earnings per share.  Basic earnings
per share excludes dilution and is calculated by dividing income available
to common stockholders by the weighted-average number of common shares
outstanding for the period.

Diluted earnings per share reflects the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock

LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

(J) Net Loss per Common Share and Dividends - continued

that then shared in the earnings of the entity.  For all periods presented,
no common stock equivalents have been included in the computation of
diluted earnings per share as they were determined to be anti-dilutive.

                                               EARNINGS PER SHARE (UNAUDITED)
                                                  FOR THE THREE MONTHS ENDED
                                                   8/31/03           8/31/02
    Basic Loss per Share:

Net loss                                         $(140,215)          $(2,931)

Net loss applicable to common shareholders       $(140,215)          $(2,931)

Weighted average number of common shares         2,266,476         2,196,233

Basic loss per Share                                 $(.06)            $(.00)

    Diluted Loss per Share:

Net loss from primary income per common share    $(140,215)          $(2,931)

Net loss for diluted earnings per share          $(140,215)          $(2,931)

Weighted average number of shares used in
  calculation of diluted earnings per share      2,266,476         2,196,233

Diluted loss per share                               $(.06)            $(.00)

Basic and diluted net loss per share is computed using the weighted average
number of common shares outstanding during the period.  Potentially dilutive
securities are excluded from the diluted net loss per share calculation, as
the effect would be antidilutive.  Potentially dilutive shares not included
are 270,500 shares for outstanding employee stock options.

(K) Financial Information About Foreign and Domestic Operations and Export
    Sales

                                                  FOR THE THREE MONTHS ENDED
                                                   8/31/03          8/31/02
Sales to unaffiliated customers:
      United States                               $734,117         $754,597
      Europe                                       308,628          288,435
      Central and South America                     98,896           59,240
      Middle East                                   56,781           72,163
      Other Foreign                                119,685          111,064
                                                $1,318,107       $1,285,499

No other geographic concentrations exist where net sales exceed 10% of
total net sales.

Sales or transfers between geographic areas         none             none
LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

                                                  08/31/03         08/31/02
  Long-lived Assets:
      United States                               $279,396          $18,947
      Mexico                                        86,435           24,985

                                                  $365,831          $43,932

(L) Related Party Transactions

In April 2003, Lancer de Mexico entered into a manufacturing subcontractor
agreement with Biomerica, Inc., to provide manufacturing services in
Mexicali, Mexico.  The agreement requires reimbursement from Biomerica for
discrete expenses such as payroll, shipping, and customs fees; lease and
security deposits of approximately $2,000 and $1,100 per month,
respectively; and service fees of approximately $2,900 per month.  The
accompanying consolidated balance sheet includes a total receivable of
approximately $9,400 due from Biomerica at August 31, 2003; for service
fees of approximately $5,700, and other expenses to be reimbursed of
approximately $3,700.

(M) Directors and Officers Insurance

Under its bylaws, the Company has agreed to indemnify its officers and
directors for certain events or occurrences arising as a result of the
officer or director's serving in such capacity. The term of the
indemnification period is for the officer's or director's lifetime.  The
maximum potential amount of future payments the Company could be required
to make under these indemnification agreements is unlimited.  However, the
Company has a directors and officer liability insurance policy that limits
its exposure and enables it to recover a portion of any future amounts paid.

As a result of its insurance policy coverage, the Company believes the
estimated fair value of these indemnification agreements is minimal and has
no liabilities recorded for these agreements as of August 31, 2003. The
Company enters into indemnification provisions under (i) its agreements
with other companies in its ordinary course of business, typically with
business partners, contractors, and customers, landlords and (ii) its
agreements with investors. Under these provisions the Company generally
indemnifies and hold harmless the indemnified party for losses suffered or
incurred by the indemnified party as a result of the Company's activities
or, in some cases, as a result of the indemnified party's activities under
the agreement. These indemnification provisions often include
indemnifications relating to representations made by the Company with regard
to intellectual property rights. These indemnification provisions generally
survive termination of the underlying agreement. In addition, in some cases,
the Company has agreed to reimburse employees for certain expenses and to
provide salary continuation during short-term disability. The maximum
potential amount of future payments the Company could be required to make
under these indemnification provisions is unlimited. The Company has not
incurred material costs to defend lawsuits or settle claims related to these
indemnification agreements. As a result, the Company believes the estimated
fair value of these agreements is minimal. Accordingly, the Company has no
liabilities recorded for these agreements as of August 31, 2003.

LANCER ORTHODONTICS, INC.

Notes to Condensed Consolidated Financial Statements - continued

(N) Recent Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 143, "ACCOUNTING FOR ASSET RETIREMENT
OBLIGATIONS", which requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred
with the associated asset retirement costs being capitalized as a part of
the carrying amount of the long-lived asset. SFAS No. 143 also includes
disclosure requirements that provide a description of asset retirement
obligations and reconciliation of changes in the components of those
obligations. The statement is effective for fiscal years beginning after
June 15, 2002. The Company does not expect the adoption of SFAS No. 143 did
not have a material effect on the Company's consolidated financial position
or results of operations.

In June 2002, the FASB issued SFAS No. 146, "ACCOUNTING FOR COSTS ASSOCIATED
WITH EXIT OR DISPOSAL ACTIVITIES," which updates accounting and reporting
standards for personnel and operational restructurings. The Company was
required to adopt SFAS No. 146 for exit, disposal or other restructuring
activities that are initiated after December 31, 2002, with early
application encouraged. The Company adoption of SFAS No. 146 did not have a
material effect on the Company's consolidated financial position or results
of operations.

In April 2003, SFAS No. 149, "AMENDMENT OF STATEMENT 133 ON DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES" was issued. This statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." This statement is effective for contracts entered into or
modified after June 30, 2003. The adoption of this statement is not expected
to have a significant effect on the Company's consolidated financial
position or results of operations.

In May 2003, SFAS No. 150, "ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS
WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY" was issued. This
statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. This statement is effective for financial instruments entered into
or modified after May 31, 2003. The adoption of SFAS No. 150 did not have a
significant effect on the Company's consolidated financial position,
results of operations, or cash flows.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of
operations are based on the consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted
in the United States.  The preparation of these financial statements
requires estimates and assumptions that affect the reported amounts and
disclosures.


We believe the following to be critical accounting policies as they require
more significant judgments and estimates used in the preparation of our
consolidated financial statements.  Although we believe that our judgments
and estimates are appropriate and correct, actual future results may differ
from our estimates.

In general, the critical accounting policies that may require judgments or
estimates relate specifically to the Allowance for Doubtful Accounts,
Inventory Reserves for Obsolescence and Declines in Market Value, Impairment
of Long-Lived Assets, Stock Based Compensation, and Income Tax Accruals.

We recognize product revenues when an arrangement exists, delivery has
occurred, the price is determinable and collection is reasonably assured.

The Allowance for Doubtful Accounts is established for estimated losses
resulting from the inability of our customers to make required payments.
The assessment of specific receivable balances and required reserves is
performed by management and discussed with the audit committee.  We have
identified specific customers where collection is probable and have
established specific reserves, but to the extent collection is made, the
allowance will be released.  Additionally, if the financial condition of
our customers were to deteriorate, resulting in an impairment of their
ability to make payments, additional allowances may be required.

Reserves are provided for excess and obsolete inventory, which are estimated
based on a comparison of the quantity and cost of inventory on hand to
management's forecast of customer demand.  Customer demand is dependent on
many factors and requires us to use significant judgment in our forecasting
process.  We must also make assumptions regarding the rate at which new
products will be accepted in the marketplace and at which customers will
transition from older products to newer products.  Once a reserve is
established, it is maintained until the product to which it relates is sold
or otherwise disposed of, even if in subsequent periods we forecast demand
for the product.

In general, we are in a loss position for tax purposes, and have established
a valuation allowance against deferred tax assets, as we do not believe it
is likely that we will generate sufficient taxable income in future periods
to realize the benefit of our deferred tax assets.  Predicting future
taxable income is difficult, and requires the use of significant judgment.

At May 31, 2003, all of our deferred tax assets were reserved.  Accruals are
made for specific tax exposures and are generally not material to our
operating results or financial position, nor do we anticipate material
changes to these reserves in the near future.

Risks and Uncertainties

License Agreements - Certain of the Company's sales of products are governed
by license agreements with outside third parties. All of such license
agreements to which the Company currently is a party, are for fixed terms
which will expire after ten years from the commencement of the agreement or
upon the expiration of the underlying patents. After the expiration of the
agreements or the patents, the Company is free to use the technology that
had been licensed.  There can be no assurance that the Company will be able
to obtain future license agreements as deemed necessary by management. The
loss of some of the current licenses or the inability to obtain future
licenses could have an adverse affect on the Company's financial position
and operations. Historically, the Company has successfully obtained all the
licenses it believed necessary to conduct its business.

Distribution - The Company has entered into various exclusive and non-
exclusive distribution agreements (the "Agreements") which generally specify
territories of distribution. The Agreements range in term from one to five
years. The Company may be dependent upon such distributors for the marketing
and selling of its products worldwide during the terms of these agreements.
Such distributors are generally not obligated to sell any specified minimum
quantities of the Company's product. There can be no assurance of the volume
of product sales that may be achieved by such distributors.

Government Regulations - The Company's products are subject to regulation by
the FDA under the Medical Device Amendments of 1976 (the "Amendments").  The
Company has registered with the FDA as required by the Amendments. There can
be no assurance that the Company will be able to obtain regulatory
clearances for its current or any future products in the United States
or in foreign markets.

European Community - The Company is required to obtain certification in the
European community to sell products in those countries.  The certification
requires the Company to maintain certain quality standards.  The Company has
been granted certification.  However, there is no assurance that the Company
will be able to retain its certification in the future.

Risk of Product Liability - Testing, manufacturing and marketing of the
Company's products entail risk of product liability.  The Company currently
has product liability insurance.  There can be no assurance, however, that
the Company will be able to maintain such insurance at a reasonable cost or
in sufficient amounts to protect the Company against losses due to product
liability.  An inability could prevent or inhibit the commercialization of
the Company's products.  In addition, a product liability claim or recall
could have a material adverse effect on the business or financial condition
of the Company.

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Except for historical information contained herein, the statements in this
Form 10-QSB are forward-looking statements.  Forward-looking statements
involve known and unknown risks and uncertainties which may cause Lancer's
actual results in future periods to differ from forecasted results.  These
risks and uncertainties include, among other things, the continued demand
for the Company's products, availability of raw materials and the state of
the economy.  These and other risks are described in the Company's Annual
Report on Form 10-KSB and in the Company's other filings with the Securities
and Exchange Commission.

RESULTS OF OPERATIONS

For the three months ended August 31, 2003, net loss increased $137,284 as
compared to the three months ended August 31, 2002.  The increase in net
loss is primarily attributable to the increase in marketing expense.

For the three months ended August 31, 2003, net sales increased $32,608
(2.5%) as compared to the three months ended August 31, 2002.  International
net sales increased $53,088, primarily in Central and South America.
Domestic net sales decreased $20,480.

For the three months ended August 31, 2003, cost of sales as a percentage of
sales totaled 74.0%, an increase of 2.1% as compared to the three months
ended August 31, 2002, which totaled 71.9%.  This increase is attributable
to an increase in scrap and the change in product mix for sales.

For the three months ended August 31, 2003, selling expenses increased
$62,845 (22.3%) as compared to the three months ended August 31, 2002.  The
increase is primarily attributable to an increase in payroll costs and
advertising expenses.

For the three months ended August 31, 2003, general and administrative
expenses increased $756 (.7%) as compared to the three months ended August
31, 2002.  The increase is primarily attributable to an increase in
insurance costs.

For the three months ended August 31, 2003, product development expenses
increased $17,316 as compared to the three months ended August 31, 2002.
The increase is attributable to labor costs and supplies associated with
development of new products and manufacturing technologies.

For the three months ended August 31, 2003, interest expense decreased
$3,572 (100%) as compared to the three months ended August 31, 2002.  The
decrease is attributable to an adjustment of previous expense by the
financing company.

For the three months ended August 31, 2003, other income decreased $37,288
due to the insurance proceeds received in the three months ended August 31,
2002.

For the three months ended August 31, 2003, rental income of $1,032 was
realized.

FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES

The Company's financial condition at August 31, 2003 and its previous two
fiscal year ends was as follows:

                                 08/31/03         05/31/03         05/31/02
Current Assets                 $3,060,112       $3,448,770       $3,474,312
Current Liabilities               522,855          635,098          634,021
Working Capital                 2,537,257        2,813,672        2,840,291
Line of Credit                        421              426           65,669
Shareholder Equity              2,979,189        3,115,654        3,011,979
Total Assets                    3,502,044        3,750,752        3,646,000

Cash decreased $223,659 during the three months ended August 31, 2003.

Working capital decreased $276,415 during the three months ended August 31,
2003, primarily attributable to a decrease in cash and receivables.  The
Company expects to meet all of its cash requirements for the foreseeable
future out of its cash reserves, cash flow, and line of credit.



At August 31, 2003, Lancer has a $400,000 line of credit with GE Capital
Healthcare Financial Services through October 24, 2003.  Borrowings are made
at prime plus 2.0%, however not less than 8.0%, (8.0% at February 28, 2003)
and are limited to 80% of accounts receivable less than 90 days old with a
liquidity factor of 94%.  There is an outstanding balance of  $421 at August
31, 2003 and the unused portion available is approximately $271,000.  Lancer
is in compliance with its debt covenants at August 31, 2003.

The line of credit is collateralized by substantially all the assets of
Lancer, including inventories, receivables, and equipment.  The lending
agreement for the line of credit requires, among other things, that Lancer
maintain a tangible net worth of $2,100,000 and that receivables payments be
sent to a controlled lockbox.  In addition to interest, a management fee of
0.25% of the average monthly outstanding loan balance and an unused balance
fee of .0425% on the average monthly unused portion available are required.
Lancer is not required to maintain compensating balances in connection with
this lending agreement.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Factors That May Affect Future Results

You should read the following factors in conjunction with the factors
discussed elsewhere in this and our other filings with the SEC and in
materials incorporated by reference in these filings.  The following is
intended to highlight certain factors that may affect the financial
condition and results of operations of Lancer and are not meant to be an
exhaustive discussion of risks that apply to companies such as Lancer.  Like
other businesses, Lancer is susceptible to macroeconomic downturns in the
United States or abroad, as were experienced in fiscal year 2002, that may
affect the general economic climate and performance of Lancer or its
customers. Aside from general macroeconomic downturns, the additional
material factors that could affect future financial results include, but
are not limited to: Terrorist attacks and the impact of such events;
diminished access to raw materials that directly enter into our
manufacturing process; shipping; labor disruption or other major degradation
of the ability to ship our products to end users; inability to successfully
control our margins which are affected by many factors including
competition and product mix; protracted shutdown of the US border due to an
escalation of terrorist or counter terrorist activity; the operating and
financial covenants contained in our credit line which could limit our
operating flexibility, any changes in our business relationships with
international distributors or the economic client they operate in; any
event that has a material adverse impact on our foreign manufacturing
operations may adversely affect our operations as a whole, failure to manage
the future expansion of our business could have a material adverse effect
on our revenues and profitability; possible costs in complying with
government regulations and the delays in receiving required regulatory
approvals or the enactment of new adverse regulations or regulatory
requirements; numerous competitors, some of which have substantially
greater financial and other resources than we do; potential claims and
litigation brought by patients or dental professionals alleging harm caused
by the use of or exposure to our products; quarterly variations in operating
results caused by a number of factors, including business and industry
conditions and other factors beyond our control. All these factors make it
difficult to predict operating results for any particular period.


Item 4.  PROCEDURES AND CONTROLS

Within the 90 days prior to the date of this report, Lancer carried out an
evaluation, under the supervision and with the participation of Lancer's
management, including the Company's Chief Executive Officer and Director
of Financial Planning, of the effectiveness of the design and operation of
Lancer's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14.  Based upon that evaluation, the Chief Executive Officer and
Director of Financial Planning concluded that Lancer's disclosure controls
and procedures are effective.  There were no significant changes in Lancer's
internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation.

PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS  Not Applicable

Item 2.   CHANGES IN SECURITIES  Not Applicable

Item 3.   DEFAULTS UPON SENIOR SECURITIES  Not Applicable

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  Not Applicable

Item 5.   OTHER INFORMATION  Not Applicable

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

          There were no Form 8-k reports filed during the quarter.





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                LANCER ORTHODONTICS, INC.
                                                        Registrant



Date October 15, 2003                           By /s/ Zackary Irani
                                                       Zackary Irani,
                                                  Chief Executive Officer







CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Zackary Irani, certify that the Quarterly Report on Form 10-QSB for the
quarter ended August 31, 2003, fully complies with the requirements in
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, and that
the information contained in such Annual Report fairly presents, in all
material respects, the financial condition and results of operations of
Lancer Orthodontics, Inc. for the periods being presented.

/s/ Zackary Irani
    Zackary Irani
    Chief Executive Officer

Date:  October 15, 2003



CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Zackary Irani, certify that:

1. I have reviewed this Quarterly Report on Form 10-QSB of Lancer
Orthodontics, Inc.;

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

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

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

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

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

c) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and

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

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

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

Date: October 15, 2003

/s/Zackary Irani
Chief Executive Officer



CERTIFICATION OF ACCOUNTING MANAGER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, John Dodge, certify that the Quarterly Report on Form 10-QSB for
the quarter ended August 31, 2003, fully complies with the requirements
in Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, and
that the information contained in such Annual Report fairly presents, in
all material respects, the financial condition and results of operations
of Lancer Orthodontics, Inc. for the periods being presented.

/s/ John Dodge
    John Dodge
    Director of Financial Planning

Date:  October 15, 2003




CERTIFICATION OF ACCOUNTING MANAGER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Dodge, certify that:

1. I have reviewed this Quarterly Report on Form 10-QSB of Lancer
Orthodontics, Inc.;

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

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

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

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

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

c) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and

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

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

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

Date:  October 15, 2003


/s/John Dodge
Director of Financial Planning