UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended May 31, 2007
[ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the transition period from ________________ to __________________.
Commission File Number 000-49817
GENOSYS, INC.
(Exact Name of Small Business Issuer as specified in its Charter)
Utah | 87-0671592 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
280 West Riverpark Dr., Provo, UT 84604
(Address of principal executive offices, including zip code)
(801) 623-4751
(Registrant’s telephone number, including area code)
Check whether the Issuer (1) 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 Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ No¨
Indicate by check mark whether the Issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes¨ Noþ
Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years
Not applicable.
Check whether the Issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
Not applicable.
1
Applicable Only to Corporate Issuers
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
Class | Outstanding as of June 27, 2007 |
Common Stock, $.001 par value | 45,668,031 shares |
Documents Incorporated by Reference: See Part II, Item 6.
Transitional Small Business Issuer Format: Yes [ ] No [X]
2
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Consolidated Balance Sheets
As of May 31, 2007, and November 30, 2006 4
Condensed Consolidated Statements of Operations
For the three and six months ended May 31, 2007, and 2006 5
Condensed Consolidated Statements of Cash Flows
For the six months ended May 31, 2007, and 2006 6
Notes to Condensed Consolidated Financial Statements 7
Item 2: Management’s Discussion and Analysis or Plan of Operation 9
Item 3: Controls and Procedures 11
PART II – OTHER INFORMATION
Item 1: Legal Proceedings 13
Item 2: Unregistered Sale of Equity Securities and Use of Proceeds 13
Item 3: Defaults upon Senior Securities 13
Item 4: Submission of Matters to a Vote of Security Holders 13
Item 5: Other Information 13
Item 6: Exhibits 13
Signatures 14
3
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
GENOSYS, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS |
| May 31, 2007 (Unaudited) |
| November 30, 2006 (Audited) | |
Current assets: |
|
|
|
| |
Cash and cash equivalents | $ | 523,954 | $ | 904,715 | |
Prepaid expenses |
| 38,628 |
| 83,859 | |
Total current assets |
| 562,582 |
| 988,574 | |
Property and equipment, net of accumulated depreciation and amortization of $31,856 and $11,097, respectively |
| 173,977 |
| 176,949 | |
Patents, net of amortization of $828 and $0, respectively |
| 27,849 |
| 7,967 | |
| $ | 764,408 | $ | 1,173,490 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
| |
Current liabilities: |
|
|
|
| |
Accounts payable Short-Term Loan from Related Party | $ | 37,597 25,000 | $ | 9,692 - | |
Accrued liabilities |
| 5,408 |
| 49,840 | |
Taxes payable |
| 100 |
| 100 | |
Total current liabilities |
| 68,105 |
| 59,632 | |
Total liabilities |
| 68,105 |
| 59,632 | |
Stockholders’ equity: |
|
|
|
| |
Common stock, $.001 par value; 50,000,000 shares authorized, 45,668,031 shares issued and outstanding at February 28, 2007 and November 30, 2006, respectively |
| 45,668 |
| 45,668 | |
Additional paid-in capital |
| 2,525,414 |
| 2,525,414 | |
Accumulated deficit |
| (77,924) |
| (77,924) | |
Deficit accumulated in the development stage |
| (1,796,855) |
| (1,379,300) | |
Total stockholders’ equity |
| 696,303 |
| 1,113,858 | |
| $ | 764,408 | $ | 1,173,490 | |
See accompanying notes to condensed consolidated financial statements.
4
GENOSYS, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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| From Beginning of | ||||
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| Development Stage | ||||
|
| For the Three Months |
| For the Six Months |
| (June 30, 2005) | ||||
|
| Ended May 31, |
| Ended May 31, |
| To May 31, | ||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| 2007 |
|
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|
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|
|
|
|
Revenues | $ | - | $ | - | $ | - | $ | - | $ | - |
|
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|
Cost of sales |
| - |
| - |
| - |
| - |
| - |
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|
Gross margin |
| - |
| - |
| - |
| - |
| - |
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|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Research and development |
| 110,823 |
| 241,046 |
| 198,923 |
| 274,678 |
| 929,054 |
General and administrative |
| 116,695 |
| 114,019 |
| 232,489 |
| 469,606 |
| 1,008,711 |
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
| 227,518 |
| 355,065 |
| 431,412 |
| 744,284 |
| 1,937,765 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operations |
| (227,518) |
| (355,065) |
| (431,412) |
| (744,284) |
| (1,937,765) |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
Interest income |
| 5,696 |
| 14,765 |
| 14,171 |
| 33,530 |
| 72,302 |
Gain (loss) on disposal of asset |
| - |
| - |
| (414) |
| - |
| (414) |
Other income (expense) |
| - |
| - |
| 100 |
| - |
| 100 |
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense), net |
| 5,696 |
| 14,765 |
| 13,857 |
| 33,530 |
| 71,988 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before income taxes |
| (221,822) |
| (340,300) |
| (417,555) |
| (710,754) |
| (1,865,777) |
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income tax |
| - |
| - |
| - |
| - |
| 200 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
| (221,822) |
| (340,300) |
| (417,556) |
| (710,754) |
| (1,865,977) |
|
|
|
|
|
|
|
|
|
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|
Discontinued operations: |
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|
|
|
|
|
|
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|
|
Loss from discontinued operations, net of tax |
| - |
| - |
| - |
| - |
| (2,131) |
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|
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|
|
|
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|
Gain on disposal of Discontinued operations, net of |
|
|
|
|
|
|
|
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|
|
tax |
| - |
| - |
| - |
| - |
| 71,253 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) | $ | (221,822) | $ | (340,300) | $ | (417,555) | $ | (710,754) | $ | (1,796,855) |
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Basic and diluted loss per share |
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From continuing operations | $ | (.01) | $ | (.01) | $ | (.01) | $ | (.02) | $ | (.04) |
Basic and diluted loss per share |
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From discontinued operations | $ | - | $ | - | $ | - | $ | - | $ | - |
Basic and diluted loss per share | $ | (.01) | $ | (.01) | $ | (.01) | $ | (.02) | $ | (.04) |
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Basic and diluted weighted average number of common shares outstanding |
| 45,668,031 |
| 45,668,031 |
| 45,668,031 |
| 45,514,734 |
| 44,860,430 |
See accompanying notes to condensed consolidated financial statements.
5
GENOSYS, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| For the Six Months Ended May 31, 2007 |
| For the Six Months Ended May 31, 2006 |
| From Beginning of Development Stage (June 30, 2005) to May 31, 2007 |
|
Cash flows from operating activities: |
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|
Net loss | $ | (417,555) | $ | (710,754) | $ | (1,796,855) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
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|
|
|
|
|
|
Depreciation and amortization |
| 21,586 |
| 2,314 |
| 32,937 |
|
Gain on the disposal of discontinued operations |
| - |
| - |
| (71,253) |
|
Loss on disposal of equipment |
| 414 |
| - |
| 414 |
|
Increase (Decrease) due to discontinued operations |
| - |
| - |
| (6,020) |
|
Stock issued for services |
| - |
| 270,000 |
| 270,000 |
|
Changes in operating assets and liabilities: |
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|
|
|
|
|
|
(Increase) Decrease in prepaid expenses |
| 45,231 |
| (79,872) |
| (38,502) |
|
Increase (Decrease) in accounts payable Increase (Decrease) in related party liabilities |
| 27,905 25,000 |
| (1,422) - |
| 37,596 25,000 |
|
Increase (Decrease) in accrued liabilities |
| (44,432) |
| 8,302 |
| 5,408 |
|
Increase (Decrease) in tax payable |
| - |
| - |
| 100 |
|
Net cash used in operating activities |
| (341,851) |
| (511,432) |
| (1,541,175) |
|
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Cash flows from investing activities: |
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|
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|
Purchase of intangible assets |
| (20,710) |
| - |
| (28,380) |
|
Purchase of equipment |
| (18,200) |
| (21,190) |
| (206,246) |
|
Net cash provided by (used in) investing activities |
| (38,910) |
| (21,190) |
| (234,626) |
|
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Cash flows from financing activities: |
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Issuance of common stock for cash |
| - |
| - |
| 2,271,604 |
|
Cash from discontinued operations |
| - |
| - |
| (19,777) |
|
Net cash provided by financing activities |
| - |
| - |
| 2,251,827 |
|
|
|
|
|
|
|
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|
Net increase (decrease) in cash |
| (380,761) |
| (532,622) |
| 476,026 |
|
Cash at beginning of the period |
| 904,715 |
| 2,008,545 |
| 47,928 |
|
Cash at end of the period | $ | 523,954 | $ | 1,475,923 | $ | 523,954 | |
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Supplemental Disclosure Information |
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Cash paid during the year for: |
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Interest | $ | - | $ | - | $ | - |
|
Income taxes |
| - |
| - |
| - |
|
Stock issued for services |
| - |
| 270,000 |
| 270,000 |
|
|
|
|
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|
See accompanying notes to condensed consolidated financial statements.
6
GENOSYS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Interim Condensed Consolidated Financial Statements
The accompanying condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Security and Exchange Commission. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows as of the dates and for the periods presented herein have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s November 30, 2006 Annual Report on Form 10-KSB. The results of operations for the three and six months ended May 31, 2007, are not necessarily indicative of the operating results that may be expected for the year ending November 30, 2007. The Company’s significant accounting policies are set forth in Note 1 to the consolidated financial statements in the November 30, 2006 Annual Report on Form 10-KSB.
The Company’s working capital requirements for the foreseeable future will vary based upon a number of factors, including the costs to complete development work, the cost of bringing its products to commercial viability, the timing of the market launches of its products and the level of sales after introduction into the market place. As of May 31, 2007, the Company had accounts payable and accrued liabilities totaling $68,105. At May 31, 2007, the Company had cash and cash equivalents $523,954. Management does not believe that existing cash and cash equivalents will be sufficient to meet the Company’s cash requirements during the next twelve months, and is making preparations to raise additional funds. However, there is no assurance that additional funding will be available on favorable terms, if at all. If the Company fails to obtain additional funding when needed, the Company’s business and financial condition may be adver sely affected.
(2) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of GeNOsys, Inc. and its wholly-owned subsidiary, GeNOsys, Inc., a Nevada corporation. All significant intercompany accounts and transactions have been eliminated in consolidation.
(3) Going Concern
The Company has accumulated losses since inception and has not yet been able to generate profits from operations. Operating capital has been raised through the sale of common stock. Additionally, the Company’s plans require funding in excess of current cash reserves. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management plans include further development and production of portable, medical gas generators. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
(4) Prepaid Expenses
On May 12, 2006, the Company entered into an Office Lease Agreement with Riverwoods Medical Art Center, L.C. The lease extends for a period of five years. In accordance with this agreement the Company made a deposit payment of $79,849 which is being applied to the first year’s rent on a monthly basis. The monthly lease payment is $4,850.00.
(5) Basic and Diluted Net Loss Per Common Share
Both basic and diluted net loss per share for the periods ending May 31, 2007 and 2006 are based on the net operating loss for the period divided by the weighted average number of common shares outstanding for the period.
7
(6) Related Party Transactions
During the fiscal quarter ended May 31, 2007, the Company borrowed $25,000 from a related party in order to meet operating needs until the Company was able to obtain cash from their CD account. This borrowing is short term in nature and does not bear interest.
(7) Subsequent Events
The Company held its annual meeting of shareholders on June 27, 2007, at which three proposals were submitted to shareholder vote. The first proposal was for the election of directors. It was proposed that Clark M. Mower be elected to a term of one year, John W.R. Miller be elected to a term of two years, and John P. Livingstone be elected to a term of three years. The second proposal was for approval of an amendment to the Articles of Incorporation to increase the number of authorized shares from the current 50,000,000 to a total of 100,000,000. The third proposal was for approval to implement the GeNOsys, Inc. 2007 Stock Option Plan.
All of the proposals were approved by shareholder vote. The shareholders elected Mr. Mower by a vote of 39,146,522 for and 100 withheld authority, Mr. Miller by a vote of 39,146,522 for and 100 withheld authority, and Mr. Livingstone by a vote of 39,146,522 for and 100 withheld authority. The shareholders approved the amendment to the Articles of Incorporation by a vote of 39,056,022 for, 44,100 against, with 46,500 abstaining. The shareholders approved the adoption of the GeNOsys, Inc. 2007 Stock Option Plan by a vote of 36,318,523 for, 34,767 against, and 166,660 abstaining.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
Item 2. Management’s Discussion and Analysis or Plan of Operation
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements included in our Form 10-KSB for the year ended November 28, 2006, and notes thereto.
Overview
We are a medical research and development company that is specializing in pharmaceutical, bio-technical and medical gas generating systems. The primary gas our systems will generate is nitric oxide, along with other various combinations of beneficial medical gases suitable for the treatment of human diseases.
Nitric oxide gas is produced and sold commercially by major gas companies as a specialty gas mixture and calibration gas. Nitrogen dioxide is present in all nitric oxide gas currently produced; that limits the size of the dose
of nitric oxide gas that can be administered to humans and animals.
We have developed a proprietary compound formulation that will be utilized to produce nitric oxide gas in our desktop and portable generators. Management believes that with further formulation of our proprietary compound, we can make or filter nitric oxide gas with less toxic amounts of nitrogen dioxide, and that this process can produce nitric oxide gas in ample quantities for any current or prospective use, and at a substantially reduced price compared with all other currently available technologies.
Our current generator model is capable of delivering sufficient quantities of nitric oxide gas for individual laboratory desktop use. We will continue to further develop this and other generators and compound formulation for high production quantities and consistency. The product must have a known shelf life and be available in various configurations to produce known concentrations and known volumes of gas. Packaging is another developmental process that will need to be addressed. Management plans to rely on outside contractors to achieve these objectives.
We estimate that non-clinical laboratory sales could take place prior to the receipt of United States Food and Drug Administration (“FDA”) approval. Management anticipates that selling our generator into the market as laboratory equipment prior to receipt of final FDA approval will pave the way for sales of our medical generator and proprietary tablets, but expected financial contributions from non-medical generator and tablet sales will be too late to help offset the substantial costs of the FDA approval process for human medical uses. We expect that contributions will be able to support our manufacturing and set-up costs and contribute to the overall profitability of our Company in due time, but we believe that they will also require financing. We anticipate entering the non-clinical laboratory market in the next 24 months.
All human medical uses of nitric oxide gas require FDA approval, and the approval of similar international agencies. Approval can be a long and expensive process, with no assurance that any such approval will ever be granted. Management hopes to reduce time to regulatory approval by certain strategic approaches that are proprietary.
Our objectives are to establish GeNOsys (generated nitric oxide systems) as the premier nitric oxide generating pharmaceutical company, and to manufacture and sell medical grade nitric oxide generators and tablets for use in the relief of human diseases, offer value added services such as custom generators adapted for the treatment of various diseases, hire staff both currently identified and unidentified to implement our business model, and to gain FDA approval of our generating system.
Three and Six Months Ended May 31, 2007 and 2006
During the three and six-month periods ended May 31, 2007, we had a net loss of $221,822 and $417,565, respectively. This compares to a net loss of $340,300 and $710,754, respectively, for the comparable periods ended May 31, 2006. Net loss per common share for the 2007 periods was $(.01) and $(.01), respectively. Net loss per common share for the comparable 2006 periods was $(.01) and $(.02), respectively.
Research and development (“R&D”) expenses were $110,823 and $198,923, respectively, for the three and six-month periods ended May 31, 2007. R&D expenses for the comparable periods in 2006 were $241,046 and
9
274,678, respectively. Research and development expenditures declined in 2007 due to the reduction in contract work related to the nitric oxide generator and the tablet formulation. As the documentation preparation and regulatory work for FDA intensifies approval, R&D expenses will increase through the remainder of 2007.
General and administrative expenses were $116,695 and $232,489, respectively, for the three and six-month periods ended May 31, 2007. Expenses for the comparable periods in 2006 were $114,019 and $469,606, respectively. The 2007 year-to-date decrease results from the $270,000 non-cash charge expensed on January 31, 2006, for the issuance of 450,000 shares of restricted common stock, valued at $.60 per share, issued in exchange for services. Excluding that charge, general and administrative expenses increased $32,883 in 2007. The increase is primarily related to fees paid to consultants for the creation of our web site and corporate presentation materials. General and administrative expenses are expected to continue to increase through the remaining periods in 2007 as expenses are incurred in raising the additional capital needed to advance FDA approval of our products.
Total other income was $5,696 and $13,857, respectively, for the three and six-month periods ended May 31, 2007. Total other income was $14,765 and $33,530 for the comparable periods in 2006. The decrease results from diminished interest earned on invested funds. Cash funds have been reduced due to investing in patents and equipment and to fund our operating loss
Financial Position
We had $523,954 in cash and cash equivalents as of May 31, 2007, representing a decrease of $380,761 from November 30, 2006. Working capital as of May 31, 2007, was $494,477 compared to $928,942 as of November 30, 2006. This decrease in cash and working capital was primarily due to cash and cash equivalents invested in intellectual property and fixed assets and used to fund our operating loss for the period.
Liquidity and Capital Resources
To date, we have financed our operations principally through private placements of equity securities. Net cash of $341,851 was used for operating activities during the six months ended May 31, 2007. This is a decrease of $169,581 as compared to the $511,432 used during the same period ended May 31, 2006. Also, during the six months ended May 31, 2007, net cash of $38,910 was used for the purchase of intangible assets and equipment. This compares with $21,190 used for the purchase of intangible assets and equipment for the same period ended May 31, 2006. As of May 31, 2007, our current liabilities totaled $68,105, and we had working capital of $494,477. As of May 31, 2007, we had no long-term debt obligations.
Our working capital requirements for the foreseeable future will vary based upon a number of factors, including the costs to complete development work, the cost of bringing our nitric oxide generator and nitric oxide tablets to commercial viability, the costs associated with obtaining FDA approval, the timing of the market launches of our products and the level of sales of those products when introduced into the market place. As of May 31, 2007, we had accounts payable and accrued liabilities totaling $68,105. At May 31, 2007, we had cash and cash equivalents of $523,954. We do not believe that existing cash and cash equivalents will be sufficient to execute our business plan or to meet our cash requirements during the next twelve months, and we are currently making preparations to raise additional funds. However, there can be no assurance that additional funding will be available on favorable terms, if at all. If we fail to obtain additio nal funding when needed, our business and financial condition may be adversely affected.
Critical Accounting Policies
Recent Accounting Pronouncements.
SFAS 159 — In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,including an amendment of FASB Statement No. 115”(“SFAS 159”). SFAS 159 creates a fair value option allowing an entity to irrevocably elect fair value as the initial and subsequent measurement attribute for certain financial assets and financial liabilities, with changes in fair value recognized in earnings as they occur. SFAS 159 also requires an entity to report those financial assets and financial liabilities measured at fair value in a manner that separates those reported fair values from the carrying amounts of assets and liabilities measured using another measurement attribute on the face of the statement of financial position. Lastly, SFAS 159 requires an entity to provide information that would allow users to understand the effect on earnings of
10
changes in the fair value on those instruments selected for the fair value election. SFAS 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted. We are continuing to evaluate SFAS 159 and to assess the impact on its results of operations and financial condition if an election is made to adopt the standard.
We have reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operation, financial position or cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on our current or future earnings or operations.
Inflation
We do not expect the impact of inflation on our operations to be significant for the next twelve months.
Off Balance Sheet Arrangements
We had no off balance sheet arrangements during the applicable periods covered hereby.
Forward-Looking Statements
This Form 10-QSB contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended. Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to our goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may”, “would”, “could”, “expects”, “projects”, “anticipates”, “believes”, “estimates”, “plans”, “intends”, “targets” or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, and regulatory and technical factors affecting our operations, products, services and prices.
Unless otherwise required by applicable law, we do not undertake, and specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
Item 3A(T). Controls and Procedures
(a) Management’s Annual Report on Internal Control Over Financial Reporting.
As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon this evaluation, our President and Chief Financial Officer concluded that information required to be disclosed is recorded, processed, summarized and reported within the specified periods, and is accumulated and communicated to management, including our President and Chief Financial Officer, to allow for timely decisions regarding required disclosure of material information required to be included in our periodic Securities and Exchange Commission reports. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our President and Chief Financial Officer have concluded that our disclosure controls and procedures a re effective to a reasonable assurance level of achieving such objectives. However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls over financial reporting, and there have been no changes in our
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internal controls or in other factors in the last fiscal quarter that have materially affected our internal controls over financial reporting.
(b) Changes in Internal Control Over Financial Reporting.
There were no changes in our internal control over financial reporting during the period covered by this Report.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Use of Proceeds of Registered Securities
None; not applicable.
Purchases of Equity Securities by Us and Affiliated Purchasers
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
We held our annual meeting of shareholders on June 27, 2007, at which three proposals were submitted to shareholder vote. The first proposal was for the election of directors. It was proposed that Clark M. Mower be elected to a term of one year, John W.R. Miller be elected to a term of two years, and John P. Livingstone be elected to a term of three years. The second proposal was for approval of an amendment to the Articles of Incorporation to increase the number of authorized shares from the current 50,000,000 to a total of 100,000,000. The third proposal was for approval to implement the GeNOsys, Inc. 2007 Stock Option Plan.
All of the proposals were approved by shareholder vote. The shareholders elected Mr. Mower by a vote of 39,146,522 for and 100 withheld authority, Mr. Miller by a vote of 39,146,522 for and 100 withheld authority, and Mr. Livingstone by a vote of 39,146,522 for and 100 withheld authority. The shareholders approved the amendment to the Articles of Incorporation by a vote of 39,056,022 for, 44,100 against, with 46,500 abstaining. The shareholders approved the adoption of the GeNOsys, Inc. 2007 Stock Option Plan by a vote of 36,318,523 for, 34,767 against, 166,660 abstaining, and 2,626,672 not voting.
Item 5. Other Information.
(a) None; not applicable.
(b) Nominating Committee
During the quarterly period ended May 31, 2007, there were no changes in the procedures by which security holders may recommend nominees to our Board of Directors.
Item 6. Exhibits.
(a) Exhibit Index
EXHIBIT INDEX
Exhibit No. Description of Exhibit
3.1 Articles of Incorporation (Incorporated by reference to the
Company’s Registration Statement on Form 10-SB filed May 14,
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2002).
3.2 By-laws (Incorporated by reference to the Company’s
Registration Statement on Form 10-SB filed May 14, 2002).
3.3 Amendment to the Articles of Incorporation dated September
12, 2005 (Incorporated by reference to Exhibit 3.3 of the
Company’s Form 10-KSB, dated November 30, 2005).
3.4 Amendment to the By-Laws dated June 18th, 2004 (Incorporated
by reference to Exhibit 3.4 of the Company’s Form 10-KSB,
dated November 30, 2005).
14 Code of Ethics (Incorporated by reference to Exhibit 14 of
the Company’s Form 10-KSB, dated November 30, 2005).
21 Subsidiaries (Incorporated by reference to Exhibit 21 of the
Company’s Form 10-KSB, dated November 30, 2005).
Registration statement on Form 10-SB filed May 14, 2002, as
amended on September 10, 2002, November 19, 2002, and December
9, 2002*
Annual Report on Form 10KSB for the year ended November 30,
2004, and filed on February 24, 2005*
Quarterly Report on Form 10QSB for the quarter ended May 31,
2005, and filed on July 14, 2005*
Current Report on Form 8-K dated August 18, 2005, and filed
August 25, 2005. and as amended on September 28, 2005*
Current Report on Form 8-K dated January 3, 2007 and filed
February 15, 2007*
Current Report on Form 8-K dated March 23, 2007 and filed
March 28, 2007*
* Incorporated here in by reference.
31.1 Certification of John W. R. Miller under Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Keith L. Merrell under Section 302 of the
Sarbanes-Oxley Act of 2002.
32 Certification of John W.R. Miller and Keith L. Merrell
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the
Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: June 27, 2007 | GENOSYS, INC. By /s/ John W.R. Miller _ John W.R. Miller President, Chief Executive Officer, Director |
Date: June 27, 2007 | By /s/ Keith L. Merrell _ Keith L. Merrell Chief Financial Officer and Treasurer |
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