U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] Quarterly report under Section 13 or 15(D) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2007
[ ] Transition report under Section 13 or 15(D) of the Exchange
Act
For the transition period from __________ to __________
Commission file number 0-15888
IGENE Biotechnology, Inc.
_________________________________________________________________
(Exact name of Small Business Issuer as Specified in its Charter)
Maryland 52-1230461
_______________________________ ____________________
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
9110 Red Branch Road, Columbia, Maryland 21045-2024
___________________________________________________
(Address of Principal Executive Offices)
(410) 997-2599
________________________________________________
(Issuer's Telephone Number, Including Area Code)
None
____________________________________________________
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the Issuer: (1) filed all reports required to be filed
by Section 13 or 15(D) of the Exchange Act during the past 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 the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [x]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEEDING FIVE YEARS
Check whether the registrant 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.
Yes [ ] No [ ]
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
109,437,072 shares of common stock, par value $.01, as of December
_____________________________________________________________________
11, 2007.
_________
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [x]
FORM 10-QSB
IGENE Biotechnology, Inc.
INDEX
PART I - FINANCIAL INFORMATION
Page
Condensed Consolidated Balance Sheets ........................ 5
Condensed Consolidated Statements of Operations .............. 6
Condensed Consolidated Statements of Stockholders' Deficiency. 7
Condensed Consolidated Statements of Cash Flows .............. 8
Notes to Condensed Consolidated Financial Statements ......... 9-15
Management's Discussion and Analysis of Financial
Conditions and Results of Operations ......................... 17-19
Controls and Procedures ...................................... 20
PART II - OTHER INFORMATION ................................... 21-22
SIGNATURES ..................................................... 23
EXHIBIT INDEX .................................................. 24
IGENE BIOTECHNOLOGY, INC.
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
PART I
FINANCIAL INFORMATION
IGENE Biotechnology, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
June 30, December 31,
2007 2006
_____________ _____________
(Unaudited) (Restated)
(Note 1)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 193,663 $ 21,786
Prepaid expenses and other current assets 2,574 14,093
_____________ _____________
TOTAL CURRENT ASSETS 196,237 35,879
Property and equipment, net 24,224 33,571
Investment in and advances to unconsolidated joint venture --- ---
Other assets 5,125 5,125
_____________ _____________
TOTAL ASSETS $ 225,586 $ 74,575
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 150,035 $ 210,424
Convertible debenture --- 705,000
Accrued interest --- 46,570
_____________ _____________
TOTAL CURRENT LIABILITIES 150,035 961,994
LONG-TERM LIABILITIES
Notes payable (net of unamortized discount) 4,129,668 3,615,889
Convertible debentures (net of unamortized discount) 3,055,054 2,103,444
Accrued interest 6,042,986 5,655,830
REDEEMABLE PREFERRED STOCK
Carrying amount of redeemable preferred
stock, 8% cumulative, convertible,
voting, series A, $.01 par value per
share. Stated value was $ 20.00 and $19.68,
respectively. Authorized 1,312,500
shares, issued 11,134. 222,680 219,117
_____________ _____________
TOTAL LIABILITIES 13,600,423 12,556,274
_____________ _____________
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY
Common stock --- $.01 par value per share.
Authorized 750,000,000 shares;
issued and outstanding 109,337,072 shares. 1,093,371 1,093,371
Additional paid-in capital 33,265,687 33,265,687
Accumulated deficit (47,733,895) (46,840,757)
_____________ _____________
TOTAL STOCKHOLDERS' DEFICIENCY (13,374,837) (12,481,699)
_____________ _____________
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY $ 225,586 $ 74,575
============= =============
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-5-
IGENE Biotechnology, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
_____________ _____________ _____________ _____________
(Restated) (Restated)
EQUITY IN REPAID ADVANCES (LOSS)
OF JOINT VENTURE $ 199,672 $ 171,639 $ 258,628 $ (18,263)
_____________ _____________ _____________ _____________
OPERATING EXPENSES
__________________
Marketing and selling 37,433 47,399 39,325 90,210
Research and development 245,172 237,088 497,286 445,737
General and administrative 275,149 292,231 478,062 517,014
Operating expenses reimbursed by Joint Venture (515,442) (459,917) (960,486) (859,860)
_____________ _____________ _____________ _____________
TOTAL OPERATING EXPENSES 42,312 116,801 54,187 193,101
_____________ _____________ _____________ _____________
OPERATING PROFIT (LOSS) 157,360 54,838 204,441 (211,364)
_____________ _____________ _____________ _____________
OTHER INCOME 1,155 --- 7,537 ---
INTEREST EXPENSE (including amortization of debt discount
of $351,695 and $351,694 for the three months ended June 30,
2007 and 2006 respectively and $703,389 and $572,748 for the
six months ended June 30, 2007 and 2006 respectively) (574,244) (558,886) (1,105,116) (986,339)
_____________ _____________ _____________ _____________
NET LOSS $ (415,729) $ (504,048) $ (893,138) $ (1,197,703)
============= ============= ============= =============
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.00) $ (0.00) $ (0.01) $ (0.01)
============= ============= ============= =============
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-6-
IGENE Biotechnology, Inc. and Subsidiary
Condensed Consolidated Statements of Stockholders' Deficiency
(Unaudited)
Additional Total
Common Stock Paid-in Accumulated Stockholders'
(shares/amount) Capital Deficit Deficiency
________________________ _____________ _____________ _____________
Balance at January 1, 2007 109,337,072 $ 1,093,371 $ 33,265,687 $(46,840,757) $(12,481,699)
Net loss for the six months ended June 30, 2007 --- --- --- (893,138) (893,138)
____________ ___________ _____________ _____________ _____________
Balance at June 30, 2007 109,337,072 $ 1,093,371 $ 33,265,687 $(47,733,895) $(13,374,837)
============ =========== ============= ============= =============
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-7-
IGENE Biotechnology, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six months ended
_______________________________
June 30, June 30,
2007 2006
_____________ _____________
(Restated)
Cash flows from operating activities
Net loss $ (893,138) $ (1,197,703)
Adjustments to reconcile net loss to net cash used
by operating activities:
Amortization of debt discount 703,389 572,748
Depreciation 9,347 9,347
Increase in preferred stock for cumulative dividends
classified as interest 3,563 4,743
Manufacturing cost paid in shares of common stock --- 30,360
(Recoupment of payment) Equity in loss of joint venture (258,628) 18,263
Decrease in:
Accounts receivable --- 7,092
Prepaid expenses and other current assets 11,519 12,225
Increase in:
Accounts payable and accrued expenses 280,197 439,882
_____________ _____________
Net cash used by operating activities (143,751) (103,043)
_____________ _____________
Cash flows from investing activities
Recoupment of payment (advances) to joint venture 258,628 (18,263)
_____________ _____________
Cash flows from financing activities
Proceeds from issuance of convertible debenture 762,000 ---
Repayment of convertible debenture (705,000) ---
Proceeds from exercise of warrants --- 788
Proceeds from exercise of employee stock options --- 10,300
_____________ _____________
Net cash provided by financing activities 57,000 11,088
_____________ _____________
Net increase (decrease) in cash and cash equivalents 171,877 (110,218)
Cash and cash equivalents at beginning of period 21,786 119,745
_____________ _____________
Cash and cash equivalents at end of period $ 193,663 $ 9,527
============= =============
Supplementary disclosure and cash flow information
__________________________________________________
Cash paid for interest $ 57,637 $ 35,250
Cash paid for income taxes --- ---
See Note (4) for non-cash investing and financing activities.
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-8-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(1) Unaudited consolidated financial statements
The June 30, 2007 consolidated financial statements presented
herein are unaudited, and in the opinion of management, include
all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of financial position,
results of operation and cash flows. Such financial statements
do not include all of the information and footnote disclosures
normally included in financial statements prepared in
accordance with accounting principles generally accepted in the
United States of America. This quarterly report on Form 10-QSB
should be read in conjunction with Igene's Annual Report on
Form 10-KSB/A for the year ended December 31, 2006. The
December 31, 2006 consolidated balance sheet is derived from
the audited balance sheet included therein.
The six and three month ended June 30, 2006 condensed
consolidated statements of operations, the six months ended
June 30, 2006 condensed consolidated statement of cash flows,
and the December 31, 2006 condensed consolidated balance sheet,
contain restated financial data. The Company historically when
valuing the shares underlying the warrants of the Company, has
applied a discount to the value of the shares based on the
illiquidity of the shares, applying such things as blockage
discounts to the value of the shares. Based on the application
of illiquidity discounts the Company felt it was an immaterial
adjustment to record a valuation to the shares underlying the
warrants. The Company has determined to value the shares
underlying the warrants from time to time in connection with
the Company's issuance of promissory notes and convertible
debentures using a Black Scholes model and ignoring any
discounts for illiquidity of shares or blockage discounts.
(2) Nature of Operations
Igene Biotechnology, Inc. (the "Company" or "Igene") was
incorporated under the laws of the State of Maryland on October
27, 1981 as "Industrial Genetics, Inc." Igene changed its name
to "IGI Biotechnology, Inc." on August 17, 1983 and to "Igene
Biotechnology, Inc." on April 14, 1986. Igene is located in
Columbia, Maryland and is engaged in the business of industrial
microbiology and related biotechnologies. Igene has
operational subsidiaries in Norway and Chile. The Company is
engaged in the business of developing, marketing, and
manufacturing specialty ingredients for human and animal
nutrition. Igene was formed to develop, produce and market
value-added specialty biochemical products. Igene is a
supplier of natural astaxanthin, an essential nutrient in
various feed applications and a source of pigment for coloring
farmed salmon species. Igene also supplies nutraceutical
ingredients, as well as consumer ready health food supplements,
including astaxanthin. Igene is focused on fermentation
technology, pharmacology, nutrition and health in its marketing
of products and applications worldwide.
Igene has devoted its resources to the development of
proprietary processes to convert selected agricultural raw
materials or feedstocks into commercially useful and cost
effective products for the food, feed, flavor and agrochemical
industries. In developing these processes and products, Igene
has relied on the expertise and skills of its in-house
scientific staff and, for special projects, various
consultants.
In an effort to develop a dependable source of production, on
March 18, 2003, Tate & Lyle PLC ("Tate & Lyle") and the Company
announced a 50:50 joint venture to produce AstaXin(R) for the
aquaculture industry. Production utilizes Tate & Lyle's
fermentation capability together with the unique technology
developed by Igene. Part of Tate & Lyle's existing Selby,
England, citric acid facility has been modified to include the
production of 1,500 tons per annum of this product. Tate &
Lyle's investment of $25 million includes certain of its
facility assets currently used in citric acid production.
Commercial production has commenced.
-9-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
(3) Uncertainty
Igene has incurred net losses in each year of its existence,
aggregating approximately $47,734,000 from inception to June
30, 2007 and its liabilities exceeded its assets by
approximately $13,375,000 at that date. These factors indicate
that Igene will not be able to continue in existence unless it
is able to raise additional capital and attain profitable
operations.
As discussed in Subsequent Event (note 11) as of October 31,
2007 Igene has terminated its relationship with the Joint
Venture with Tate & Lyle. Igene maintains the saleable
inventory after the termination of the relationship and is
currently reviewing alternatives for a future manufacturing
alternative. In the interim Igene will sell the existing
inventory in order to maintain its relationship with
customers and use these funds to cover expenses.
(4) Noncash investing and financing activities
During the six months ended June 30, 2006, 7,375 shares of
redeemable preferred stock, with a recorded aggregate value of
$141,600, were converted into 14,750 shares of common stock.
This included the 8% Cumulative Convertible Preferred Stock,
Series B and has relieved the company of this amount from long-
term debt. During the six months ended June 30, 2007 and 2006,
the Company recorded in each quarter dividends in arrears on 8%
redeemable preferred stock accumulating at $.16 per share
aggregating to $3,563 and $4,743, respectively.
During the six months ended June 30, 2006, Fermic, Igene's
manufacturing agent, earned 545,571 shares of common stock as
part of the manufacturing agreement. Fermic earned 2,250 shares
of common stock for each kilogram pure Astaxanthin produced and
delivered as part of the agreement. The average price of .056
per share was based on the market value of the shares at the
time the product was produced. With the distribution in the
first quarter of 2006, Fermic has earned the 20,000,000 shares
in total under the contract.
During the six months ended June 30, 2006, 312,000 shares of
common stock were issued as part of employee stock option
exercises. The Company received $10,300 based on an average
exercise price of $.033 per share.
During the six months ended June 30, 2006, 7,884 warrants were
exercised for $788. 7,884 new shares of common stock were
issued pursuant to the exercise.
(5) Long - Term Liabilities
Igene entered into Convertible Promissory Notes (the
"Convertible Notes") with each of the following note holders
for the following respective amounts (a) NorInnova AS (formerly
Forskningsparken I Tromso AS) for $106,500; (b) Knut Gjernes
for $7,500; (c) Magne Russ Simenson for $278,000; and (d) Nord
Invest AS for $313,000. Each of the Convertible Notes had a
maturity date of November 1, 2004. On November 18, 2005, each
of the Convertible Note Holders provided Igene with written
notice of default under each of the Convertible Notes.
On November 29, 2006, the Convertible Note holders filed a
complaint against the Company in the Circuit Court of Howard
County, Maryland seeking payment of all outstanding amounts due
under the Convertible Notes, the "Notes Litigation". On
February 23, 2007, the Company paid $762,638, representing the
full amount due including interest, to the Convertible Note
holders as settlement of all claims related to the Notes
Litigation. The complaint was dismissed with prejudice on
March 6, 2007.
-10-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
The funds to settle the Notes Litigation were provided by
Igene's directors. On February 15, 2007, Igene issued and sold
$762,000 in aggregate principal amount of 5% convertible
debentures, 50% each to certain directors of Igene. These
debentures are convertible into shares of Igene's common stock
at $.02 per share. These debentures, if not converted earlier,
become due on February 15, 2017.
(6) Joint Venture
On March 18, 2003, the Company entered into a Joint Venture
Agreement with Tate & Lyle Fermentation Products Ltd. ("Tate &
Lyle"). Pursuant to a Joint Venture Agreement, the Company and
Tate & Lyle agreed to form a joint venture (the "Joint
Venture") to manufacture, market and sell Astaxanthin and
derivative products throughout the world for all uses other
than as a Nutraceutical or otherwise for direct human
consumption. Tate & Lyle contributed $24,600,000 in cash to
the Joint Venture, while the Company agreed to transfer to the
Joint Venture its technology relating to the production of
Astaxanthin and assets related thereto. These assets continue
to be used by the Joint Venture in the same manner as
historically used by the Company. The Company and Tate & Lyle
each have a 50% ownership interest in the Joint Venture and
equal representation on the Board of Directors of the Joint
Venture. The value of the Company's investment in the Joint
Venture has been recorded at an amount equal to the book value
of the Company's consideration contributed at the creation of
the Joint Venture. As the cost of the Company's technology and
intellectual property has been previously expensed and has a
carrying amount of zero, the initial investment in the Joint
Venture has been recorded with a book value of $316,869, which
represents the unamortized production costs contributed to the
Joint Venture. The Company also contributed $6,000 to the
capital of the Joint Venture.
As a result of the Joint Venture, the production, sales and
marketing of Astaxanthin now takes place in the unconsolidated
Joint Venture. From inception on March 18, 2003 through June
30, 2007, Igene's portion of the Joint Venture's net loss was
$20,532,070. The loss was a result of a 50% interest in the
following: Gross profit from inception was a negative
$20,570,606 on sales of $34,836,739, less manufacturing cost of
$55,407,345. Selling and general and administrative expenses
were $15,521,283, and interest expense was $4,972,250. The
resulting loss was $41,064,139. Igene's 50% portion of the
Joint Venture loss was $20,532,070.
Because the Company accounts for its investment in the Joint
Venture under the equity method of accounting, it would
ordinarily recognize as part of loss from equity the loss of
it's 50% ownership portion of the loss of the Joint Venture.
However, losses in the Joint Venture are recognized only to the
extent of the Investment in and Advances to the Joint Venture.
Losses in excess of this amount are suspended from recognition
in the financial statements and carried forward to offset
Igene's share of the Joint Venture's future income, if any.
Igene does not expect to recognize income from the Joint
Venture until all accumulated unrecognized losses have been
eliminated.
On June 15th 2005, the Company executed a limited guarantee for
one of the debt obligations of the Joint Venture. Under the
terms of the limited guarantee, the Company would guarantee up
to 4,200,000 British pounds sterling. The Company subsequently
entered into an agreement with Tate & Lyle (the other 50%
partner in the Joint Venture) whereby Tate & Lyle has agreed to
arrange funds for the Joint Venture, without recourse to Igene
Biotechnology, Inc., until the Joint Venture produces a regular
monthly cash flow, as defined, for four consecutive months. As
of July 30, 2007, the Joint Venture has not met the cash flow
requirements. The Company was released from the guarantee by
the bank.
-11-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
At June 30, 2007, prior to the recognition of its portion of
the Joint Venture loss, Igene's investment in the Joint Venture
consisted of $322,869 and its net advances to the Joint Venture
amounted to $910,484, for a total of $1,233,353. Through
December 31, 2006, Igene recognized $1,491,981 of the
$15,922,400 loss, which existed as part of the Joint Venture.
In the first quarter of 2007, the balances of the funds due to
Igene was reduced by a net repayment of $58,956, representing
the March 31, 2007 balance of $1,433,025. For the three months
ended June 30 2007, Igene recognized a gain for the repayment
of the advance for that period of $199,672. This repayment
increased the suspended loss in addition to the $2,753,602 loss
for the quarter. The cumulative suspended loss at June 30,
2007 is $19,298,717 and it will be carried forward to offset
Igene's share of earnings from the Joint Venture, if any. The
balance in the Advances to and Investment in Joint Venture
account on the Company's financial statements is zero at June
30, 2007.
On March 29, 2007 the Company was informed by their 50% partner
in the Joint Venture, Tate and Lyle, that they determined to
write down their portion of the investment in the Joint
Venture. There has been no impairment charge reflected by the
Joint Venture in the enclosed financial statements as they have
not completed their annual impairment assessment as of June 30,
2007.
The following condensed statement displays the activity of the
Joint Venture for the period of initial investment at March 18,
2003 in the Joint Venture through June 30, 2007. As shown 50%
of the activity, limited to Igene's investment, is recorded as
part of Igene's Financial Statements as loss from investment in
the Joint Venture:
June 30,
2007
_____________
ASSETS
CURRENT ASSETS
Cash $ 1,211,000
Account Receivable 5,697,000
Inventory 11,925,000
_____________
18,833,000
OTHER ASSETS
Property, plant and equipment, net 19,958,000
Intangibles 24,614,000
_____________
TOTAL ASSETS $ 63,405,000
=============
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses
(majority of which is due to one joint venturer) $ 41,947,000
Working capital loan 10,525,000
_____________
TOTAL LIABILITIES 52,472,000
Equity 10,933,000
_____________
TOTAL LIABILITIES AND EQUITY $ 63,405,000
=============
-12-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
Period from
March 18, 2003
(initial investment) to
June 30, 2007
_____________
Net Sales $ 34,836,739
Less: manufacturing cost (55,407,345)
_____________
Gross Profit (Loss) (20,570,606)
Less: selling, general and administrative (15,521,283)
_____________
Operating Loss (36,091,889)
Interest Expense (4,972,250)
_____________
Net Loss $(41,064,139)
=============
Igene's 50% equity interest in the net loss $(20,532,070)
Igene's Investment in and Advances to the Joint Venture (1,233,353)
_____________
Igene's suspended loss at June 30, 2007 $(19,298,717)
=============
The following statement displays the significant activity for
the Joint Venture for the three and six months ended June 30,
2007.
Three Months Ended Six Months Ended
_____________________________ _____________________________
June 30, 2007 June 30, 2006 June 30, 2007 June 30, 2006
_____________ _____________ _____________ _____________
Net Sales $ 3,483,572 $ 2,264,600 $ 7,063,860 $ 5,454,739
Less: manufacturing cost (4,291,174) (2,591,300) (12,469,311) (5,940,194)
_____________ _____________ _____________ _____________
Gross Profit (Loss) (807,602) (326,700) (5,405,451) (485,455)
Less: selling, general and admin (1,218,744) (778,600) (2,430,995) (1,883,319)
_____________ _____________ _____________ _____________
Operating Loss (2,026,346) (1,105,300) (7,836,446) (2,368,774)
Interest Expense (727,256) (423,300) (1,383,716) (1,124,200)
_____________ _____________ _____________ _____________
Net Loss Before tax (2,753,602) (1,528,600) (9,220,162) (3,492,974)
Reversal of tax expense --- 1,205,900 --- ---
_____________ _____________ _____________ _____________
Net Loss $ (2,753,602) $ (322,700) $ (9,220,162) $ (3,492,974)
============= ============= ============= =============
50% equity interest $ (1,376,801) $ (161,350) $ (4,610,081) $ (1,746,487)
Igene's Repayments from and additional
(Investment in and Advances to
the Joint Venture) 199,672 171,639 258,628 (18,263)
_____________ _____________ _____________ _____________
Igene's incremental suspended loss for period $ (1,576,473) $ (322,989) $ (4,868,709) $ (1,728,224)
============= ============= ============= =============
(7) Stockholders' Deficiency
As of June 30, 2007, 22,268 shares of authorized but unissued
common stock were reserved for issue upon conversion of the
Company's outstanding preferred stock.
As of June 30, 2007, 72,232,334 shares of authorized but
unissued common stock were reserved for issue and exercise
pursuant to the Company's Employee Stock Option Plans.
As of June 30, 2007, 23,421,273 shares of authorized but
unissued common stock were reserved for the conversion of
outstanding convertible promissory notes in the aggregate
amount of $1,082,500 held by directors of the Company.
-13-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
As of June 30, 2007, 66,427,651 shares of authorized but
unissued common stock were reserved for the conversion of
outstanding convertible promissory notes held by directors of
the Company.
As of June 30, 2007, 38,250,000 shares of authorized but
unissued common stock were reserved for the conversion of
outstanding convertible promissory notes issued to the
directors as part of the settlement of the ProBio notes.
As of June 30, 2007, 205,261,073 shares of authorized but
unissued common stock were reserved for the exercise of
outstanding warrants.
(8) Basic and diluted net loss per common share
Basic and diluted net loss per common share for the six-month
periods ended June 30, 2007 and 2006, are based on 109,337,072
and 107,930,385 shares, respectively, of weighted average
common shares outstanding. The same figures for the three month
period then ended are based upon 109,337,072 and 108,295,152
weighted average common shares outstanding. No adjustment has
been made for any common stock equivalents outstanding because
their effects would be antidilutive. As of June 30, 2007 and
2006, potentially dilutive shares totaled 405,614,599 and
379,969,462, respectively.
(9) Income Taxes
The Company uses the liability method of accounting for income
taxes as required by SFAS No. 109, "Accounting for Income
Taxes". Under the liability method, deferred-tax assets and
liabilities are determined based on differences between the
financial statement carrying amounts and the tax bases of
existing assets and liabilities (i.e., temporary differences)
and are measured at the enacted rates that will be in effect
when these differences reverse. Deferred income taxes will be
recognized when it is deemed more likely than not that the
benefits of such deferred income taxes will be realized;
accordingly, all net deferred income taxes have been eliminated
by a valuation allowance.
(10) Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards Number 157 -
Fair Value Measurements ("SFAS 157"). SFAS 157 defines fair
value, establishes a framework for measuring fair value in
generally accepted accounting principles ("GAAP"), and expands
disclosures about fair value measurements. Prior to SFAS 157,
there were different definitions of fair value and limited
guidance for applying those definitions in GAAP. Moreover, that
guidance was dispersed among the many accounting pronouncements
that require fair value measurements. SFAS 157 clarifies that
the exchange price is the price in an orderly transaction
between market participants to sell the asset or transfer the
liability in the market in which the reporting entity would
transact for the asset or liability, that is, the principal or
most advantageous market for the asset or liability. SFAS 157
is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within
those fiscal years. The Company is currently evaluating the
impact, if any, that SFAS 157 will have on its financial
position, results of operations and cash flows.
In June 2006, the Financial Accounting Standards Board ("FASB")
issued Financial Accounting Standards Board Interpretation
("FIN") No. 48, "Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109." FIN No. 48 provides
a comprehensive model for the recognition, measurement and
disclosure in the financial statements of uncertain tax
positions taken or expected to be taken on a tax return. The
Company adopted FIN No. 48 effective January 1, 2007. The
interpretation had no impact on financial position, results of
operations, earnings per share, or cash flows.
-14-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
In September 2006, the Securities and Exchange Commission
issued SAB No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year
Financial Statements." SAB No. 108 was issued to address
diversity in practice in quantifying financial statement
misstatements. Current practice allows for the evaluation of
materiality on the basis of either (1) the error quantified as
the amount by which the current year income statement was
misstated ("rollover method") or (2) the cumulative error
quantified as the cumulative amount by which the current year
balance sheet was misstated ("iron curtain method"). The
guidance provided in SAB 108 requires both methods to be used
in evaluating materiality ("dual approach"). SAB No. 108
permits companies to initially apply its provisions either by
(1) restating prior financial statements as if the dual
approach had always been used or (2) recording the cumulative
effect of initially applying the "dual approach" as adjustments
to the carrying values of assets and liabilities as of
January 1, 2006 with an offsetting adjustment recorded to the
opening balance of retained earnings. There were no matters
warranting the Company's consideration under the provisions of
SAB No. 108 and, therefore, it did not have an impact on the
Company's financial position, results of operations, earnings
per share or cash flows.
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." This Standard allows
entities to voluntarily choose, at specified election dates, to
measure many financial assets and financial liabilities (as
well as certain nonfinancial instruments that are similar to
financial instruments) at fair value. The election is made on
an instrument-by-instrument basis and is irrevocable. If the
fair value option is elected for an instrument, the Statement
specifies that all subsequent changes in fair value for that
instrument shall be reported in earnings. SFAS No. 159 is
effective beginning on January 1, 2008. We are currently
evaluating the impact this new Standard could have on our
financial position and results of operations.
(11) Subsequent Event
On October 31, 2007, Igene Biotechnology, Inc. (the
"Company") and Tate & Lyle Fermentation Products Ltd.
("T&L") entered into a Separation Agreement (the
"Agreement") pursuant to which the Joint Venture Agreement
dated March 19, 2003, as amended, between the parties
(the "Joint Venture") was terminated. As part of the
Agreement, the Company sold to T&L its 50% interest in the
joint venture and the joint venture sold to the Company its
intellectual property, inventory and certain assets and
lab equipment utilized by the Joint Venture. The purchase
price paid by T&L to the Company for its 50% interest
was 50% of the Joint Venture's net working capital. The
purchase price paid by the Company for the inventory was
an amount equal to 50% of the joint venture's net working
capital, the assumption of various liabilities and the
current market price of the inventory, less specified
amounts. The purchase price paid by the Company for
the intellectual property was $1.00. The purchase price
paid by the Company for the assets and lab equipment was
$1,000,000. In addition, the Company agreed to pay to T&L
an amount equal to 5% of the Company's gross revenues from
the sale of astaxanthin up to a maximum of $5,000,000.
T&L agreed for a period of five years not to engage in the
astaxanthin business.
-15-
IGENE Biotechnology, Inc. and Subsidiary
Management's Discussion and Analysis of
Financial Condition and Results of Operations
CAUTIONARY STATEMENTS FOR PURPOSES OF "SAFE HARBOR PROVISIONS" OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:
EXCEPT FOR HISTORICAL FACTS, ALL MATTERS DISCUSSED IN THIS REPORT,
WHICH ARE FORWARD LOOKING, INVOLVE A HIGH DEGREE OF RISK AND
UNCERTAINTY. CERTAIN STATEMENTS IN THIS REPORT SET FORTH
MANAGEMENT'S INTENTIONS, PLANS, BELIEFS, EXPECTATIONS OR PREDICTIONS
OF THE FUTURE BASED ON CURRENT FACTS AND ANALYSES. WHEN WE USE THE
WORDS "BELIEVE," "EXPECT," "ANTICIPATE," "ESTIMATE," "INTEND" OR
SIMILAR EXPRESSIONS, WE INTEND TO IDENTIFY FORWARD-LOOKING
STATEMENTS. YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD-
LOOKING STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
INDICATED IN SUCH STATEMENT, DUE TO A VARIETY OF FACTORS, RISKS AND
UNCERTAINTIES. POTENTIAL RISKS AND UNCERTAINTIES INCLUDE, BUT ARE
NOT LIMITED TO, COMPETITIVE PRESSURES FROM OTHER COMPANIES AND
WITHIN THE BIOTECH INDUSTRY, ECONOMIC CONDITIONS IN THE COMPANY'S
PRIMARY MARKETS, EXCHANGE RATE FLUCTUATIONS, REDUCED PRODUCT DEMAND,
INCREASED COMPETITION, INABILITY TO PRODUCE REQUIRED CAPACITY,
UNAVAILABILITY OF FINANCING, GOVERNMENT ACTION, WEATHER CONDITIONS
AND OTHER UNCERTAINTIES.
Critical Accounting Policies
____________________________
The preparation of our financial statements in conformity with
accounting principles generally accepted in the U.S. requires
management to make judgments, assumptions and estimates that affect
the amounts reported in our financial statements and accompanying
notes. Actual results could differ materially from those estimates.
The following are critical accounting policies important to our
financial condition and results presented in the financial
statements and require management to make judgments and estimates
that are inherently uncertain:
The Joint Venture inventories are stated at the lower of cost
or market. Cost is determined using a weighted-average approach,
which approximates the first-in first-out method. If the cost of
the inventories exceeds their expected market value, provisions are
recorded for the difference between the cost and the market value.
Inventories consist of currently marketed products.
The Joint Venture recognizes revenue from product sales when
there is persuasive evidence that an arrangement exists, delivery
has occurred, the price is fixed and determinable, and
collectibility is reasonably assured. Allowances are established
for estimated uncollectible amounts, product returns and discounts.
The investment in the Joint Venture is accounted for under the
equity method whereby the Company's 50% ownership percentage in the
Joint Venture's equity is reflected as an asset and the changes in
the Joint Venture's equity as a result of its operations is
reflected in the Company's consolidated statement of operations
subject to certain limitations. Igene's share of losses in the
Joint Venture are recognized only to the extent of Igene's
consideration paid for its initial investment in the Joint Venture
and any net advances Igene has made to the Joint Venture. Losses in
excess of this amount are suspended from recognition in the
financial statements and carried forward to offset Igene's share of
the Joint Venture future income, if any. Income in the future, if
any, will only be recognized once all previously deferred losses
have been exhausted. The Company evaluates its investment in the
Joint Venture for impairment, as it does for all other assets. The
accounting policies followed by the Joint Venture are in conformity
with accounting principals generally accepted in the United States
of America.
-16-
IGENE Biotechnology, Inc. and Subsidiary
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
Overview of Financial Position
______________________________
During the six-month periods ended June 30, 2007 and 2006, in
addition to the Joint Venture discussed in more detail below, the
following actions materially affected the Company's financial
position.
o Increases in accounts payable and accrued expenses of $280,197
and decreases in prepaid expenses of $11,519 were sources of
cash. These were in addition to decreases due from Joint
Venture of $258,628.
o The carrying value of redeemable preferred stock was increased
by $3,563 in 2007 and $4,743 in 2006, reflecting cumulative
unpaid dividends on redeemable preferred stock.
o Net proceeds of borrowing provided $57,000 in net cash provided
by financing activities. These funds were used to pay
outstanding interest in the settlement of the Notes Litigation
referenced in Note 4, entitled "Long-Term Liabilities."
o During the six months ended June 30, 2006, 7,375 shares of
redeemable preferred stock, with a recorded aggregate value of
$141,600, were converted into 14,750 shares of common stock.
This included the 8% Cumulative Convertible Preferred Stock,
Series B preferred securities and has relieved the Company of
this amount from long-term debt.
In December 1988, as part of an overall effort to contain costs
and conserve working capital, Igene suspended payment of the
quarterly dividend on its preferred stock. Resumption of the
dividend will require significant improvements in cash flow. Unpaid
dividends accumulate for future payment or addition to the
liquidation preference or redemption value of the preferred stock.
As of June 30, 2007, total dividends in arrears on Igene's preferred
stock were $133,608 ($12.00 per share) and are included in the
carrying value of the redeemable preferred stock.
Results of Operations
_____________________
Sales and other revenue
As part of the Joint Venture agreement, all sales are
recognized through the Joint Venture. Therefore, Igene recorded no
sales of AstaXin(R) since the inception of the Joint Venture on
March 18, 2003.
Cost of sales and gross profit
As with Sales Revenue, Cost of Sales and Gross Profit is
recognized through the Joint Venture. As a result, Igene reported
no gross profit on sales of AstaXin(R) since the inception of the
Joint Venture. The Joint Venture attributes poor or negative gross
profit to a combination of pricing pressure in the market and
inefficiencies in production. Management expects that sales and
gross profits may continue to be limited by production efficiency
resulting from process research and development. Management expects
the level of gross profit to improve in the future as production
efficiency is realized from the Joint Venture with Tate & Lyle
offsetting pricing competition, but can provide no assurances of
future increased production or future increased margin.
Additionally no cost of sales were recorded as they are also
recorded as part of the Joint Venture activity.
-17-
IGENE Biotechnology, Inc. and Subsidiary
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
Marketing and selling expenses
For the quarters ended June 30, 2007 and 2006, Igene recorded
marketing and selling expense in the amount of $37,433 and $47,399,
respectively, a decrease of $9,966 or 21%. For the six months ended
June 30, 2007 and 2006, Igene recorded marketing and selling expense
in the amount of $39,325 and $90,210, respectively, a decrease of
$50,885 or 56%. As a result of the Joint Venture with Tate & Lyle,
Igene is expecting an increase in salable product with a
corresponding increase in marketing and sales costs. These cost are
being incurred as part of the selling costs of the Joint Venture.
Additionally, as a result of the Joint Venture, these expenses that
are incurred by Igene are reimbursed to Igene. However, no
assurances can be made concerning increased production from the new
facility or marketing and selling costs.
Research and development expenses
For the quarter ended June 30, 2007 and 2006, Igene recorded
research and development costs in the amount of $245,172 and
$237,088, respectively, an increase of $8,084 or 3%. For the six
months ended June 30, 2007 and 2006, Igene recorded research and
development costs in the amount of $497,286 and $445,737,
respectively, an increase of $51,549 or 12%. These costs are
expected to remain relatively constant at the current level in
support of increasing the efficiency of the manufacturing process
through experimentation in the Company's pilot plant, developing
higher yielding strains of yeast and other improvements in the
Company's AstaXin(R) technology. Igene is hoping this will lead to
an increase in salable product at a reduced cost to Igene and the
Joint Venture. However, as of October 31, 2007, the Joint Venture
has been terminated and as a result the Joint Venture will no longer
reimburse these costs.
Operating expenses
General and administrative expenses for the quarter ended June
30, 2007 and 2006 were $275,149 and $292,231 respectively, a
decrease of $17,082 or 6%. General and administrative expenses for
the six months ended June 30, 2007 and 2006 were $478,062 and
$517,014 respectively, a decrease of $38,952 or 8%. These costs are
expected to remain constant at this current level. Cost levels are
due to increased audit and reporting costs. Igene works to keep
overhead costs at a reduced level and spend funds on research and
development efforts. A portion of this cost is funded by
reimbursement through the Joint Venture and the remainder is funded
through operations or through contributions from directors; though
none of these can be assured.
Interest expense
Interest expense for the quarters ended June 30, 2007 and 2006
was $574,244 and $558,886, respectively, an increase of $15,358 or
3%. This includes amortization of discount on Igene's notes and
debentures of $351,695 for the quarter ended June 30, 2007 and
$351,694 for the quarter ended June 30, 2006. For the six months
ended June 30, 2007 and 2006, interest expense was $1,105,116 and
$986,339, respectively, a decrease of $118,777 or 12%. This
includes amortization of discount on Igene's notes and debentures of
$703,389 for the six months ended June 30, 2007 and $572,748 for the
six months ended June 30, 2006. The interest expense was almost
entirely composed of interest on the Company's long term financing
from its directors and other stockholders, and interest on the
Company's subordinated debenture in both periods. It is expected
this number may decrease due to the conversions by holders of long-
term debt to equity.
-18-
IGENE Biotechnology, Inc. and Subsidiary
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(continued)
Expenses reimbursed by Joint Venture
As part of the Joint Venture agreement, costs incurred by Igene
related to production, research and development, as well as those
costs related to the marketing of AstaXin(R), are considered costs
of the Joint Venture and therefore are reimbursed by the Joint
Venture. For the six months ended June 30, 2007, costs reimbursed by
the Joint Venture totaled $960,486. The costs covered $39,325 of
marketing costs, $497,286 of research and development costs and
$423,875 of general and administrative costs. For the six months
ended June 30, 2006, costs reimbursed by the Joint Venture totaled
$859,860. The costs covered $90,210 of marketing costs, $445,737 of
research and development costs and $323,913 of general and
administrative costs. However, as of October 31, 2007, the Joint
Venture has been terminated and as a result the Joint Venture will
no longer reimburse these costs.
Net loss and basic and diluted net loss per common share
As a result of the foregoing, the Company reported net losses
of $415,729 and $504,048, respectively, for the quarters ended June
30, 2007 and 2006, a decrease in the loss of $88,319 or 18%. This
represents a loss of $.00 per basic and diluted common share in the
quarters ended June 30, 2007 and 2006.
Liquidity and Capital Resources
Historically, Igene has been funded primarily by equity
contributions and loans from stockholders. As of June 30, 2007,
Igene had working capital of $46,202, and cash and cash equivalents
of $193,663. Currently Igene is also funded by research and
development and general and administrative reimbursements from the
Joint Venture.
Cash used for operating activities during the six-month period
ended June 30, 2007 and 2006 amounted to $143,751 and $103,043,
respectively, an increase in cash used of $40,708.
Cash provided by (used for) investing activities during the
six-month period ended June 30, 2007 and 2006 amounted to $258,628
and ($18,263), respectively, provided by a net decrease in advances
to the Joint Venture.
Cash provided by financing activities for the six-month period
ended June 30, 2007 and 2006, amounted to $57,000 and $11,088,
respectively. Financing activities during the six months of 2007
were in settlement of the convertible debentures. Cash provided by
financing activities during the first half of 2006 consisted
primarily of employee stock option plan purchases and exercise of
warrants.
Over the next twelve months, Igene believes it will need
additional working capital. Igene hopes to achieve profits from
sales of AstaXin(R) through the Joint Venture. However, there can be
no assurance that projected profits, if any, from sales will be
sufficient for Igene to fund its continued operations.
The Company does not believe that inflation has had a
significant impact on its operations during the six-month periods
ended June 30, 2007 and 2006.
-19-
IGENE Biotechnology, Inc. and Subsidiary
Management's Discussion and Analysis of
Controls and Procedures
Subsequent events
On October 31, 2007, Igene Biotechnology, Inc. (the "Company")
and Tate & Lyle Fermentation Products Ltd. ("T&L") entered into a
Separation Agreement (the "Agreement") pursuant to which the Joint
Venture Agreement dated March 19, 2003, as amended, between the
parties was terminated. As part of the Agreement, the Company sold
to T&L its 50% interest in the joint venture and the joint venture
sold to the Company its intellectual property, inventory and certain
assets and lab equipment utilized by the joint venture. The
purchase price paid by T&L to the Company for its 50% interest was
50% of the joint venture's net working capital. The purchase price
paid by the Company for the inventory was an amount equal to 50% of
the joint venture's net working capital, the assumption of various
liabilities and the current market price of the inventory, less
specified amounts. The purchase price paid by the Company for the
intellectual property was $1.00. The purchase price paid by the
Company for the assets and lab equipment was $1,000,000. In
addition, the Company agreed to pay to T&L an amount equal to 5% of
the Company's gross revenues from the sale of astaxanthin up to a
maximum of $5,000,000. T&L agreed for a period of five years not to
engage in the astaxanthin business.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our management has
evaluated, with the participation of our Chief Executive Officer
and our principal financial and accounting officer, the
effectiveness of our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) as of the end of the fiscal quarter
covered by this Quarterly Report on Form 10-QSB/A. Based upon the
evaluation, the Chief Executive Officer and the principal financial
and accounting officer have concluded that as of the end of such
fiscal quarter, our current disclosure controls and procedures
were not effective, because of material weaknesses in the internal
control over financial reporting described below. We have taken,
and are continuing to take, steps to address these weaknesses as
described below. With the exception of such weaknesses, however, the
Chief Executive Officer and principal financial and accounting
officer believe that our current disclosure controls and procedures
are adequate to ensure that information required to be disclosed in
the reports we file under the Exchange Act is recorded, processed,
summarized and reported on a timely basis.
Material Weaknesses and Changes in Internal Controls. During the
review of our financial statements for the three and six-month
periods ended June 30, 2007, our current independent registered
public accounting firm identified as a material weakness our
procedure regarding our internal controls over the non-routine
recording of warrants issued in connection with certain of our debt
obligations. The procedure of valuation is one that that the
company has always followed and has been reported in the company's
previous audited and unaudited financial statements. As defined by
the Public Company Accounting Oversight Board Auditing Standard No.
5, a material weakness is a deficiency or a combination of
deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement
of the annual or interim financial statements will not be prevented
or detected. Since this was identified as a material weakness by our
current independent registered public accounting firm in connection
with its review of the financial statements in the June 30, 2007,
Form 10-QSB, the transactions subject to these issues are correctly
accounted for and disclosed by us in the financial statements
included in this Form 10-QSB/A. However, on a going forward basis,
management will continue to evaluate our internal controls over the
non-routine recording of warrants issued in connection with certain
of our debt obligations in order to prevent the recurrence of the
circumstance that resulted in the material weakness identified in
connection with the review of the financial statements in this Form
10-QSB/A.
There were no changes in Igene's internal control over financial
reporting identified in connection with our evaluation of these
controls during the period covered by this report that could have
significantly affected those controls subsequent to the date of the
evaluation referred to in the previous paragraph, including any
correction action with regard to significant deficiencies and
material weaknesses.
-20-
IGENE Biotechnology, Inc.
PART II
OTHER INFORMATION
Item 1. Notes Litigation
On November 29, 2006, the Convertible Note holders filed a
complaint against the Company in the Circuit Court of Howard County,
Maryland seeking payment of all outstanding amounts due under the
Convertible Notes, the "Notes Litigation". On February 23, 2007,
the Company paid $762,638, including interest, the full amount due,
to the Convertible Note holders as settlement of all claims related
to the Notes Litigation. The complaint was dismissed with prejudice
on March 6, 2007.
The funds to settle the Notes Litigation were provided by
Igene's directors. On February 15, 2007, Igene issued and sold
$762,000 in aggregate principal amount of 5% convertible debentures,
50% each to certain directors of Igene. These debentures are
convertible into shares of Igene's common stock at $.02 per share.
These debentures, if not converted earlier, become due on February
15, 2017.
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.
Convertible Debentures to Settle Litigation
The funds to settle the Notes Litigation were provided by
Igene's directors. On February 15, 2007, Igene issued and sold
$762,000 in aggregate principal amount of 5% convertible debentures,
50% each to certain directors of Igene. These debentures are
convertible into shares of Igene's common stock at $.02 per share.
These debentures, if not converted earlier, become due on February
15, 2017. For more information, see Notes Litigation referenced in
Note 5, entitled "Amendment to Long - Term Liabilities."
Limitation on Payment of Dividends
Dividends on Common Stock are currently prohibited because of
the preferential rights of holders of Preferred Stock. The Company
has paid no cash dividends on its Common Stock in the past and does
not intend to declare or pay any dividends on its Common stock in
the foreseeable future.
Item 3. Defaults Upon Senior Securities.
In December 1988, as part of an overall effort to contain costs
and conserve working capital, the Company suspended payment of the
quarterly dividend on its preferred stock. Resumption of the
dividend will require significant improvements in cash flow. Unpaid
dividends accumulate for future payment or addition to the
liquidation preference or redemption value of the preferred stock.
As of June 30, 2007, total dividends in arrears on the Company's
preferred stock total $133,608 ($12.00 per share) and are included
in the carrying value of the redeemable preferred stock.
-21-
Item 6. Exhibits
(a) Exhibits
Exhibit 3.1 - Articles of Incorporation of the Registrant as
amended to date, constituting Exhibit 3.1 to
Registration Statement No. 333-41581 on Form SB-2 are
incorporated herein by reference.
Exhibit 3.2 - Bylaws of the Registrant, constituting Exhibit
3.2 to the Registrant's Registration Statement No. 33-
5441 on Form S-1, are hereby incorporated herein by
reference.
Exhibit 31(a) - Certification of Principal Executive Officer
pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)
Exhibit 31(b) - Certification of Principal Financial Officer
pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)
Exhibit 32(a) - Certification of Chief Executive Officer
pursuant to 18 U.S.C. SECTION 1350.
Exhibit 32(b) - Certification of Chief Financial Officer
pursuant to 18 U.S.C. SECTION 1350.
-22-
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
IGENE BIOTECHNOLOGY, INC.
______________________________
(Registrant)
Date December 11, 2007 By /S/ STEPHEN F. HIU
_________________ ______________________________
STEPHEN F. HIU
President
Date December 11, 2007 By /S/ EDWARD J. WEISBERGER
_________________ ______________________________
EDWARD J. WEISBERGER
Chief Financial Officer
-23-
EXHIBIT INDEX
Exhibit 3.1 - Articles of Incorporation of the Registrant as
amended to date, constituting Exhibit 3.1 to
Registration Statement No. 333-41581 on Form SB-2 are
incorporated herein by reference.
Exhibit 3.2 - Bylaws of the Registrant, constituting Exhibit
3.2 to the Registrant's Registration Statement No. 33-
5441 on Form S-1, are hereby incorporated herein by
reference.
Exhibit 31(a) - Certification of Principal Executive Officer
pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)
Exhibit 31(b) - Certification of Principal Financial Officer
pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)
Exhibit 32(a) - Certification of Chief Executive Officer
pursuant to 18 U.S.C. SECTION 1350.
Exhibit 32(b) - Certification of Chief Financial Officer
pursuant to 18 U.S.C. SECTION 1350.
-24-