UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002.
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-5576
SPHERIX INCORPORATED
(formerly Biospherics Incorporated)
(Exact name of Registrant as specified in its charter)
Delaware |
| 52-0849320 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
12051 Indian Creek Court, Beltsville, Maryland 20705 |
(Address of principal executive offices) |
|
301-419-3900 |
(Registrant’s telephone number, including area code) |
|
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate the number of shares outstanding of each of the Registrant’s classes of Common Stock, as of the latest practicable date.
Class |
| Outstanding as of June 30, 2002 |
|
Common Stock, $0.005 par value |
| 11,337,482 shares |
|
Transitional Small Business Disclosure Format (Check One): Yes o No ý
Spherix Incorporated
Form 10-Q
For the Quarter Ended June 30, 2002
Index
2
(Unaudited)
|
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
|
| 2002 |
| 2001 |
| 2002 |
| 2001 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ | 4,226,509 |
| $ | 4,840,378 |
| $ | 7,292,677 |
| $ | 10,058,105 |
|
|
|
|
|
|
|
|
|
|
| ||||
Operating expense |
|
|
|
|
|
|
|
|
| ||||
Direct contract and operating costs |
| 2,995,333 |
| 3,129,343 |
| 5,632,081 |
| 7,104,010 |
| ||||
Selling, general and administrative expense |
| 996,397 |
| 1,017,361 |
| 1,962,512 |
| 2,057,336 |
| ||||
Research and development expense |
| 163,381 |
| 86,246 |
| 371,930 |
| 172,672 |
| ||||
Depreciation and amortization expense |
| 395,608 |
| 349,016 |
| 778,878 |
| 684,623 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total operating expense |
| 4,550,719 |
| 4,581,966 |
| 8,745,401 |
| 10,018,641 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
(Loss) income from operations |
| (324,210 | ) | 258,412 |
| (1,452,724 | ) | 39,464 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest income (expense), net |
| 24,504 |
| 30,876 |
| 42,294 |
| 92,747 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
(Loss) income before taxes |
| (299,706 | ) | 289,288 |
| (1,410,430 | ) | 132,211 |
| ||||
Income tax expense |
| — |
| — |
| — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net (loss) income |
| $ | (299,706 | ) | $ | 289,288 |
| $ | (1,410,430 | ) | $ | 132,211 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net (loss) income per share, basic |
| $ | (0.03 | ) | $ | 0.03 |
| $ | (0.13 | ) | $ | 0.01 |
|
Net (loss) income per share, diluted |
| $ | (0.03 | ) | $ | 0.03 |
| $ | (0.13 | ) | $ | 0.01 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding, basic |
| 11,338,388 |
| 10,736,103 |
| 11,107,861 |
| 10,735,921 |
| ||||
Weighted average shares outstanding, diluted |
| 11,338,388 |
| 11,227,468 |
| 11,107,861 |
| 10,953,094 |
| ||||
See accompanying notes to financial statements.
3
ASSETS |
| June 30, 2002 |
| December 31, |
| ||
Current assets |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 8,581,090 |
| $ | 6,582,203 |
|
Trade accounts receivable, net of allowance for doubtful accounts of $65,000 and $35,000 |
| 2,387,366 |
| 1,521,241 |
| ||
Other receivables |
| 67,608 |
| 71,914 |
| ||
Prepaid expenses and other assets |
| 931,819 |
| 675,979 |
| ||
Total current assets |
| 11,967,883 |
| 8,851,337 |
| ||
|
|
|
|
|
| ||
Property and equipment, net of accumulated depreciation of $5,069,911 and $4,305,381 |
| 3,699,184 |
| 4,163,224 |
| ||
Patents and other intangible assets, net of accumulated amortization of $154,316 and $139,968 |
| 216,771 |
| 226,367 |
| ||
Total assets |
| $ | 15,883,838 |
| $ | 13,240,928 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
Current liabilities |
|
|
|
|
| ||
Bank line of credit |
| $ | 271,254 |
| $ | 212,856 |
|
Accounts payable and accrued expenses |
| 774,008 |
| 339,546 |
| ||
Accrued salaries and benefits |
| 810,681 |
| 1,076,568 |
| ||
Notes payable |
| 5,763 |
| 38,595 |
| ||
Capital lease obligations |
| 20,499 |
| 44,576 |
| ||
Total current liabilities |
| 1,882,205 |
| 1,712,141 |
| ||
|
|
|
|
|
| ||
Capital lease obligations |
| 13,622 |
| 21,019 |
| ||
Deferred compensation |
| 122,155 |
| 122,155 |
| ||
Deferred rent |
| 205,741 |
| 194,493 |
| ||
Deferred revenue |
| 1,000,000 |
| 1,000,000 |
| ||
Total liabilities |
| 3,223,723 |
| 3,049,808 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
| — |
| — |
| ||
|
|
|
|
|
| ||
Redeemable common stock, 2,761,507 shares |
| 668,190 |
| 668,190 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity |
|
|
|
|
| ||
Preferred stock, $0.01 par value, 2,000,000 shares authorized; none issued and outstanding |
| — |
| — |
| ||
Common stock, $.005 par value, 50,000,000 shares authorized; 11,390,670 and 10,790,170 issued, 11,337,482 and 10,737,568 shares outstanding, of which 2,761,507 shares are classified as redeemable common stock at June 30, 2002, and December 31, 2001, respectively |
| 43,146 |
| 40,143 |
| ||
Paid-in capital in excess of par value |
| 18,099,427 |
| 14,222,739 |
| ||
Treasury stock, 53,188 and 52,062 shares at cost, at June 30, 2002 and December 31, 2001, respectively |
| (350,363 | ) | (350,097 | ) | ||
Accumulated deficit |
| (5,800,285 | ) | (4,389,855 | ) | ||
Total stockholders’ equity |
| 11,991,925 |
| 9,522,930 |
| ||
Total liabilities and stockholders’ equity |
| $ | 15,883,838 |
| $ | 13,240,928 |
|
See accompanying notes to financial statements.
4
(Unaudited)
|
| Six Months Ended June 30, |
| ||||
|
| 2002 |
| 2001 |
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net (loss) income |
| $ | (1,410,430 | ) | $ | 132,211 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
| 778,878 |
| 684,623 |
| ||
Provision for uncollectible accounts receivable |
| 30,000 |
| — |
| ||
Treasury stock issued in payment of expense |
| 22,234 |
| 749 |
| ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Trade accounts receivable |
| (896,125 | ) | (1,880,624 | ) | ||
Other receivables |
| 4,306 |
| (36,494 | ) | ||
Prepaid expenses and other assets |
| (255,840 | ) | (186,126 | ) | ||
Accounts payable and accrued expenses |
| (96,024 | ) | 183,747 |
| ||
Deferred rent |
| 11,248 |
| 17,535 |
| ||
Net cash (used in) provided by operating activities |
| (1,811,753 | ) | (1,084,379 | ) | ||
|
|
|
|
|
| ||
Cash flows from investing activities |
|
|
|
|
| ||
Purchases of property and equipment |
| (300,490 | ) | (716,287 | ) | ||
Additions to patent and intangible costs |
| (4,752 | ) | (77,356 | ) | ||
Net cash used in investing activities |
| (305,242 | ) | (793,643 | ) | ||
|
|
|
|
|
| ||
Cash flows from financing activities |
|
|
|
|
| ||
Net change on bank line of credit |
| 58,398 |
| 965,120 |
| ||
Net change in book overdraft |
| 264,599 |
| 264,751 |
| ||
Payments on notes payable |
| (32,832 | ) | (151,759 | ) | ||
Payments on capital lease obligations |
| (31,474 | ) | (167,924 | ) | ||
Proceeds from issuance of common stock |
| 3,879,691 |
| 10,209 |
| ||
Cost of issuance of common stock |
| (22,500 | ) | (6,000 | ) | ||
Net cash provided by financing activities |
| 4,115,882 |
| 914,397 |
| ||
|
|
|
|
|
| ||
Net increase (decrease) in cash and cash equivalents |
| 1,998,887 |
| (963,625 | ) | ||
Cash and cash equivalents, beginning of period |
| 6,582,203 |
| 5,549,866 |
| ||
Cash and cash equivalents, end of period |
| $ | 8,581,090 |
| $ | 4,586,241 |
|
See accompanying notes to financial statements.
5
(Unaudited)
1. Basis of Presentation
The accompanying interim financial statements of Spherix Incorporated (formerly Biospherics Incorporated) (the “Company”) are unaudited and do not include all of the information and disclosures generally required for annual financial statements. In the opinion of management, the statements contain all material adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of June 30, 2002, the results of its operations for the three-month and six-month periods ended June 30, 2002 and 2001, and its cash flows for the six-month periods ended June 30, 2002 and 2001. This report should be read in conjunction with the Company’s Annual Report on Form 10-K which does contain the complete information and disclosures for the year ended December 31, 2001.
2. Net Income Per Share
Basic net income (loss) per common share has been computed by dividing net income by the weighted-average number of common shares outstanding during the year. Diluted net income per common share has been computed by dividing net income by the weighted-average number of common shares outstanding with an assumed increase in common shares outstanding for common stock equivalents. Diluted net loss per common share has been computed by dividing net loss by the weighted-average number of common shares outstanding without an assumed increase in common shares outstanding for common stock equivalents, as common stock equivalents are antidiluted. Common stock equivalents, which consist of stock options and warrants that are assumed likely to be exercised, were 135,269 and 217,173 at June 30, 2002 and June 30, 2001, respectively. Total options and warrants outstanding at June 30, 2002 and June 30, 2001, were 1,085,973 and 1,660,973, respectively.
3. Deferred Revenue
Deferred revenue includes a $1,000,000 non-refundable advance against future royalties from the D-tagatose licensing agreement with MD Foods Ingredients amba of Denmark (“MDFI”) (subsequently merged into Arla to become Arla Foods). The advance will be recognized as revenue at a rate of 50% of annual royalties generated from future sales.
4. Treasury Stock Transaction
During 2001, the Company issued 112 shares of Common Stock previously held in the treasury in payment of expenses. The excess of the purchase price of the treasury stock over the value of the stock on the date of issuance has been charged to retained earnings in the amount of $106.
During 2002, the Company issued 2,914 shares of Common Stock previously held in the treasury in payment of expenses. The excess of the value of the stock on the date of issuance over the purchase price of the treasury stock has been charged to paid-in capital in the amount of $495. The Company also purchased 3,500 shares of its common stock at a total cost of $22,000 to be held in the treasury.
5. Stockholders Equity
On March 20, 2002, warrants for 250,000 shares of common stock at $6.50 per share and warrants for 325,000 shares of common stock at $6.4005 per share were exercised by an institutional investor.
6. Change in Accounting Presentation
Starting in 2002, indirect costs related to the Company’s Information Technology Division (“ITD”) are included as part of the direct contract and operating costs in the Statement of Operations. These costs were previously reported as part of the Company’s selling, general and administrative expenses. This change reflects the changing role of ITD to that of an emerging profit center for the Company.
6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is intended to update the information contained in the Company’s Annual Report as filed on Form 10-K for the year ended December 31, 2001, and the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2002, and presumes that readers have access to, and will have read, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in such Form 10-K and Form 10-Q.
Certain statements in this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are identified by the use of forward-looking words or phrases such as “believes,” “expects,” is or are “expected,” “anticipates,” “anticipated,” “should” and words of similar impact. These forward-looking statements are based on the Company’s current expectations. Because forward-looking statements involve risks and uncertainties, the Company’s actual results could differ materially. See the Company’s Form 8-K filing dated March 26, 1999, for a more detailed report on forward-looking statements.
Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and assess performance. The Company is managed along two business segments: InfoSpherix and BioSpherix.
Results of Operations for the Three and Six Months Ended June 30, 2002 and 2001
The Company reported net loss of $300,000 ($0.03 per share, diluted) on sales of $4.2 million and net loss of $1,410,000 ($0.13 per share, diluted) on sales of $7.3 million for the three months and six months ended June 30, 2002, respectively, compared to a net income of $289,000 ($0.03 per share, diluted) on sales of $4.8 million, and net income of $132,000 ($0.01 per share, diluted) on sales of $10.1 million for the three months and six months ended June 30, 2001, respectively.
InfoSpherix
|
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
|
| 2002 |
| 2001 |
| 2002 |
| 2001 |
| ||||
Revenue |
| $ | 4,172,000 |
| $ | 4,798,000 |
| $ | 7,235,000 |
| $ | 10,014,000 |
|
Operating expense |
| 4,168,000 |
| 4,378,000 |
| 8,000,000 |
| 9,656,000 |
| ||||
Operating income (loss) |
| $ | 4,000 |
| $ | 420,000 |
| $ | (765,000 | ) | $ | 358,000 |
|
InfoSpherix revenue for the three months and six months ended June 30, 2002, decreased $626,000 (13%) and $2,779,000 (28%), respectively, in relation to the same periods in 2001, resulting in operating income of $4,000 and an operating loss of $765,000 for the three-month and six-month periods ended June 30, 2002, compared to operating income of $420,000 and $358,000 for the same respective periods in 2001.
On March 30, 2001, the Company received approximately $1.3 million in revenue and recognized related expenses in settlement of a U.S. Department of Labor Administrative Review Board (“ARB”) decision concerning the Company’s liability for wages and fringe benefits under two contracts that the Company was awarded by the General Services Administration (“GSA”), a Federal Government agency. Under the settlement agreement, GSA reimbursed the Company $1.3 million for wages and fringe benefits (other related costs are not reimbursable), and the Company agreed to pay retroactive wages and benefits to certain labor categories in accordance with the Service Contract Act. These funds were subsequently disbursed on April 18, 2001, to the affected employees. Accordingly, a substantial portion of the decrease in revenue is attributable to this settlement.
Revenue from commercial contracts for the three months and six months ended June 30, 2002, decreased by $643,000 (83%) and $1,361,000 (90%) in relation to the same periods in 2001. The 2002 loss principally resulted from this reduction in revenue. Commercial contracts are typically for shorter terms than government contracts and that can result in substantial variations in commercial revenues. Commercial contracts are being actively pursued by the Company but the Company’s recent history has been that contracts have been received on a sporadic basis.
7
Revenue from government reservation contracts are historically greater in the spring and summer when vacation planning is more prevalent.
BioSpherix
|
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
|
| 2002 |
| 2001 |
| 2002 |
| 2001 |
| ||||
Revenue |
| $ | 54,000 |
| $ | 42,000 |
| $ | 58,000 |
| $ | 44,000 |
|
Operating expense |
| 382,000 |
| 204,000 |
| 746,000 |
| 363,000 |
| ||||
Operating loss |
| $ | (328,000 | ) | $ | (162,000 | ) | $ | (688,000 | ) | $ | (319,000 | ) |
BioSpherix revenue for the three and six months ended June 30, 2002, increased $12,000 (29%) and $14,000 (32%), respectively, in relation to the same periods in 2001. Operating loss increased $166,000 (102%) and $369,000 (116%) between years, for the three and six months ended June 30, 2002, respectively. The increase in revenue is related to sales of FlyCrackerÔ, the Company’s safe-for-humans pesticide, during the second quarter of 2002. The Company has greatly increased its sales effort for FlyCracker in order to launch it nationwide by advertising, extensive travel and employment of additional sales personnel.
The current year’s operating expense included an increase in R&D costs with respect to NaturloseÔ, the new brand name for the non-food uses of tagatose. The expenditures include a pilot plant study to determine scale-up capital and operations costs for the non-food uses of tagatose. In addition, costs were incurred in BioSpherix’s continuing effort to obtain commercial production of Naturlose. Visits to potential sites, procurements of test materials and negotiations with potential joint venture partners and toll producers have added to costs.
Research and development
For the reasons stated above, research and development expenses for the three months and six months ended June 30, 2002, increased $77,000 (89%) and $199,000 (115%), respectively, in relation to the same periods in 2001.
Selling, general and administrative
Selling, general and administrative expense (“S,G&A”) for the three months and six months ended June 30, 2002, are shown to be decreased by $20,964 (2%) and $95,000 (5%), respectively, in relation to the same periods in 2001. This is because in the prior year, selling, general and administrative expenses included approximately $155,000 and $315,000 of indirect ITD costs for the three and six months ended June 30, 2001. However, starting in 2002, indirect ITD costs are included in direct contract and operating costs.
Depreciation
Depreciation expense for the three months and six months ended June 30, 2002, increased by $47,000 (13%) and $94,000 (14%), respectively, in relation to the same periods in 2001. The increase reflects the additional depreciation related to a significant investment in software in 2001, related to our reservation business and anticipated growth in the commercial business to increase efficiency and call volume, which is being depreciated over a three-year period.
Interest
Interest income (expense), net, for the three months and six months ended June 30, 2002, decreased $6,000 (20%) and $50,000 (54%), respectively, in relation to the same periods in 2001. The decrease is due to lower interest rates on the Company’s investments in treasury funds.
8
Liquidity and Capital Resources
The Company’s Loan Agreement (the “Agreement”) with Bank of America (the “Bank”) provides for borrowing up to $2 million, subject to advance rates as defined in the Agreement. Outstanding borrowings under the Agreement aggregated $271,000 at June 30, 2002, and are collateralized by the Company’s eligible accounts receivable. The interest rate under the agreement is the Bank’s prime rate. The total amount available to the Company was $1.7 million under the Agreement at June 30, 2002. The Agreement contains covenants that require the Company to meet certain tangible net worth and cash flow coverage ratios. The Company was in compliance with the bank covenants as of June 30, 2002. The line was renewed in June and expires on June 30, 2003.
Cash flow for the six months ended June 30, 2002, reflects a net cash inflow of $2.0 million, consisting of $1.8 million used in operating activities, $305,000 used in investing activities, and $4.1 million provided by financing activities. Cash used in operating activities in 2002 increased $727,000 from those of the prior year as a result of the decreased InfoSpherix revenue and increased costs related to BioSpherix’s expanded work on FlyCracker and Naturlose. Cash used in investing activities decreased by $488,000. As noted above, a significant investment in computer software was made in June of 2001. Approximately $102,000 of software development costs were capitalized in 2002. Cash flow from financing activities increased $3.2 million between years. In 2002, $3.9 million was received through the issuance of common stock primarily through the exercise of warrants; there were no new issuances of stock in the same period of 2001.
Working capital as of June 30, 2002, was $10.1 million, which represents a $3.0 million, or 42%, increase from working capital of $7.1 million at December 31, 2001. The increase is related to the exercise of warrants during the first quarter of 2002.
The Company considers its information and telecommunications systems adequate for the near term and is anticipating sufficient cash flow from operating activities during 2002 to cover capital needs. It is also anticipated that royalties on sales by Arla could begin in 2003, when Arla now states product will be available commercially.
No dividends were paid in 2001 and none are anticipated in 2002.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company manages its debt and its available cash considering available investment opportunities and risks, tax consequences and overall financing strategies.
At June 30, 2002, the Company had approximately $6,000 of fixed-rate indebtedness and $271,000 in variable rate indebtedness in the form of the bank line of credit. The Company has not entered into any interest rate swaps or other derivatives with respect to its indebtedness.
Cash available for investment is typically invested in short term treasury funds. In general, such funds are not subject to market risk because the interest paid on such funds fluctuates with the prevailing interest rate. The carrying amounts approximate market value. It is the Company’s practice to hold these investments to maturity.
Assuming the June 30, 2002, variable rate debt and cash available for investment, a one percent change in interest rates would impact net interest income by less than $85,000.
9
In May, 2002, the Company initiated arbitration proceedings against its licensee of tagatose for food uses, MD Foods amba (merged into Arla Foods amba). The arbitration was filed with the American Arbitration Association. The Company is seeking damages for what it claims has been an unreasonably long time for its licensee to bring tagatose to market. The Company also seeks other measures to accelerate the pace toward commercialization of the food uses of tagatose. The action is in the preliminary stages.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the Company was held on May 15, 2002, where the following actions were taken:
(1) David H. Affeldt, Lionel V. Baldwin, Thomas W. Gantt, Gilbert V. Levin, M. Karen Levin, Anne S. MacLeod, Thomas G. Moore, Carol Y. Sanchez, and Deborah S. Streb were elected as directors to serve until the next Annual Meeting pursuant to the following vote tabulation:
|
| Shares |
| Shares |
| Shares |
Name |
| Voted For |
| Voted Against |
| Voted Abstained |
David H. Affeldt |
| 10,020,827 |
| 140,128 |
| 0 |
Lionel V. Baldwin |
| 10,055,027 |
| 105,928 |
| 0 |
Thomas W. Gantt |
| 10,039,127 |
| 121,828 |
| 0 |
Gilbert V. Levin |
| 10,053,827 |
| 107,128 |
| 0 |
M. Karen Levin |
| 10,015,827 |
| 145,128 |
| 0 |
Anne S. MacLeod |
| 10,044,827 |
| 116,128 |
| 0 |
Thomas G. Moore |
| 10,054,027 |
| 106,928 |
| 0 |
Carol Y. Sanchez |
| 10,045,227 |
| 115,728 |
| 0 |
Deborah S. Streb |
| 10,049,127 |
| 111,828 |
| 0 |
(2) The selection of Grant Thornton LLP as independent accountants of the Company for the year ending December 31, 2002, was ratified, with 10,074,027 shares voted in favor, 59,062 shares voted against, and 27,866 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Certification of Chief Executive Officer of Spherix Incorporated pursuant to 18 U.S.C. Section 1350
99.2 Certification of Chief Financial Officer of Spherix Incorporated pursuant to 18 U.S.C. Section 1350
(b) There were no reports on Form 8-K filed by the Registrant during the three months ended June 30, 2002.
10
Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| Spherix Incorporated |
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| (formerly Biospherics Incorporated) |
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| (Registrant) |
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Date: | August 13, 2002 | By: |
| /s/ Gilbert V. Levin |
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| Gilbert V. Levin |
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| Chair, Chief Executive Officer, and |
|
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| Treasurer |
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11