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 September 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 .......................... 16-20
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
September 30, December 31,
2007 2006
_____________ _____________
(Unaudited) Restated
(Note 1)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 155,830 $ 21,786
Prepaid expenses and other current assets 7,498 14,093
_____________ _____________
TOTAL CURRENT ASSETS 163,328 35,879
Property and equipment, net 5,243 33,571
Investment in and advances to unconsolidated joint venture --- ---
Other assets 5,125 5,125
TOTAL ASSETS $ 173,696 $ 74,575
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 129,705 $ 210,424
Convertible debenture --- 705,000
Accrued interest --- 46,570
_____________ _____________
TOTAL CURRENT LIABILITIES 129,705 961,994
LONG-TERM LIABILITIES
Notes payable (net of unamortized discount) 4,386,559 3,615,889
Convertible debentures (net of unamortized discount) 3,149,859 2,103,444
Accrued interest 6,242,531 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 $ 20.16
and $19.68, respectively. Authorized 1,312,500
shares, issued 11,134. Redemption amount $224,461 224,461 219,117
_____________ _____________
TOTAL LIABILITIES 14,133,115 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 (48,318,477) (46,840,757)
_____________ _____________
TOTAL STOCKHOLDERS' DEFICIENCY (13,959,419) (12,481,699)
_____________ _____________
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY $ 173,696 $ 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 Nine months ended
__________________________________ __________________________________
September 30, September 30, September 30, September 30,
2007 2006 2007 2006
________________ ________________ ________________ ________________
(Restated) (Restated)
EQUITY IN REPAID ADVANCES (LOSS) OF JOINT VENTURE $ (97,404) $ 11,299 $ 161,224 $ (6,964)
OPERATING EXPENSES
__________________
Marketing and selling 9,891 5,328 49,216 95,538
Research and development 223,774 173,526 721,060 619,263
General and administrative 188,537 247,241 666,599 764,255
Operating expenses reimbursed by Joint Venture (476,167) (388,421) (1,436,653) (1,248,281)
________________ ________________ ________________ ________________
TOTAL OPERATING EXPENSES (53,965) 37,674 222 230,775
________________ ________________ ________________ ________________
OPERATING PROFIT (LOSS) (43,439) (26,375) 161,002 (237,739)
GAIN ON DISPOSAL OF PROPERTY AND EQUIPMENT 5,692 --- 5,692 ---
OTHER INCOME 6,160 10,305 13,697 10,305
INTEREST EXPENSE (including amortization of debt discount
of $351,695 and $351,694 for the three months ended
September 30, 2007 and 2006 respectively and $1,055,085
and $924,442 for the nine months ended
September 30, 2007 and 2006 respectively) (552,995) (560,996) (1,658,111) (1,547,335)
________________ ________________ ________________ ________________
NET LOSS $ (584,582) $ (577,066) $ (1,477,720) $ (1,774,769)
================ ================ ================ ================
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.01) $ (0.01) $ (0.01) $ (0.02)
================ ================ ================ ================
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 nine months ended Sept 30, 2007 --- --- --- (1,477,720) (1,477,720)
_____________ _____________ _____________ _____________ _____________
Balance at September 30, 2007 109,337,072 $ 1,093,371 $ 33,265,687 $(48,318,477) $(13,959,419)
============= ============= ============= ============= =============
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)
Nine months ended
_______________________________
September 30, September 30,
2007 2006
_____________ _____________
(Restated)
Cash flows from operating activities
Net loss $ (1,477,720) $ (1,774,769)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of debt discount 1,055,085 924,442
Gain on disposal of equipment (5,692) ---
Depreciation 14,020 14,020
Manufacturing cost paid in shares of common stock --- 30,360
Shares issued to new Vice President of manufacturing --- 50,000
(Recoupment of payment) Equity in loss of joint venture (161,224) 6,964
Increase in preferred stock for cumulative dividend
classified as interest 5,344 6,524
Decrease in:
Accounts receivable --- 10,692
Prepaid expenses and other current assets 6,596 10,557
Increase in:
Accounts payable and accrued expenses 459,411 622,620
_____________ _____________
Net cash provided by (used in) operating activities (104,180) (98,590)
_____________ _____________
Cash flows from investing activities
Cash proceeds from sale of property and equipment 20,000 ---
Recoupment of payment (advances) to joint venture 161,224 (6,964)
_____________ _____________
Net cash provided (used in) investing activities 181,224 (6,964)
Cash flows from financing activities
Proceeds from issuance of convertible debentures 762,000 ---
Repayment of convertible debentures (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 134,044 (94,466)
Cash and cash equivalents at beginning of period 21,786 119,745
_____________ _____________
Cash and cash equivalents at end of period $ 155,830 $ 25,279
============= =============
Supplementary disclosure and cash flow information
__________________________________________________
Cash paid for interest $ 57,637 $ 35,250
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 September 30, 2007 condensed 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 condensed consolidated balance sheet is
derived from the audited balance sheet included therein.
The nine and three months ended September 30, 2006 condensed
consolidated statements of operations, the nine months ended
September 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 using quoted market prices 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 utilized Tate &
Lyle's fermentation capability together with the unique
technology developed by Igene. Part of Tate & Lyle's
existing Selby, England, citric acid facility was modified
to include the production of 1,500 tons per annum of this
product. Tate & Lyle's investment of $25 million included
certain of its facility assets then used in citric acid
production. On October 31, 2007, the Company and Tate and
Lyle terminated this joint venture (see Notes 6 and 11).
The Company is currently researching and conducting due
diligence in connection with entering into a contractual
relationship with a third party production facility to
manufacture AstaXin(R) previously produced by the Joint
Venture.
-9-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Consolidated Financial Statements
(continued)
(3) Uncertainty
Igene has incurred net losses in each year of its existence,
aggregating approximately $48,318,000 from inception to
September 30, 2007 and its liabilities exceeded its assets
by approximately $13,959,000 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 nine months ended September 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.
During the nine months ended September 30, 2006, Fermic,
Igene's manufacturing agent, earned 545,569 shares of common
stock as part of the manufacturing agreement between Fermic
and the Company. Fermic earned 2,250 shares of common stock
for each kilogram of pure astaxanthin produced and delivered
as part of the agreement. The average price was based on
the market value of the shares at the time the product is
produced. With the distribution in the first quarter of
2006, Fermic has earned the 20,000,000 shares in total
available under the agreement. The 545,569 shares were
earned at an average price of $.056 per share for 2006.
During the nine months ended September 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 nine months ended September 30, 2006, 7,884
warrants were exercised for $788. 7,884 new shares of
common stock were issued pursuant to the exercise.
During the nine months ended September 30, 2006 1,000,000
shares of common stock were issued to the company's new Vice
President of Manufacturing as part of his agreement in
accepting the position. The cost was expensed in the third
quarter as payroll expense, at a cost of $.05 per share,
total expense $50,000.
During the nine months ended September 30, 2007 and 2006,
the Company recorded dividends in arrears on 8% redeemable
preferred stock accumulating at $.48 per share aggregating
to $5,344 and $6,524, respectively on preferred stock. The
accrued interest is included in the carrying value of the
redeemable preferred stock.
(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.
-10-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
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.
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 were
to be used by the Joint Venture in the same manner as
historically used by the Company. The Company and Tate &
Lyle each had 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 was 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 had been previously
expensed and had a carrying amount of zero, the initial
investment in the Joint Venture has been recorded with a
book value of $316,869, which represented 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 September 30, 2007, Igene's portion of the
Joint Venture's net loss was $21,826,251. The loss was a
result of a 50% interest in the following: Gross profit
from inception was a negative $21,304,462 on sales of
$38,380,752, less manufacturing cost of $59,685,214.
Selling and general and administrative expenses were
$16,542,813, and interest expense was $5,805,227. The
resulting loss was $43,652,502. Igene's 50% portion of the
Joint Venture loss was $21,826,251.
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.
-11-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
At September 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 $1,007,888, for a total of
$1,330,757. 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 six months of 2007, the
balances of the funds due to Igene was reduced by a net
repayment of $258,628, representing the June 30, 2007
balance of $1,233,353. For the three months ended September
30, 2007, Igene recognized a loss from the advance for that
period of $97,404. This advance decreased the additional
suspended loss of $1,293,769 for the quarter. The
cumulative suspended loss at September 30, 2007 is
$20,495,494 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 condensed consolidated financial
statements is zero at September 30, 2007.
On October 31, 2007, the Company and Tate & Lyle terminated
this joint venture (see Note 11).
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 September 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:
September 30,
2007
_______________
ASSETS
CURRENT ASSETS
Cash $ 2,645,000
Account Receivable 4,711,000
Inventory 13,069,000
_______________
20,425,000
OTHER ASSETS
Property, plant and equipment, net 19,668,000
Intangibles 24,614,000
_______________
TOTAL ASSETS $ 64,707,000
===============
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses
(majority of which is due to one joint venturer) $ 48,419,000
Working capital loan 7,628,000
_______________
TOTAL LIABILITIES 56,047,000
Equity 8,660,000
_______________
TOTAL LIABILITIES AND EQUITY $ 64,707,000
===============
Period from March 18, 2003
(initial investment) to
September 30,
2007
_______________
Net Sales $ 38,380,752
Less: manufacturing cost (59,685,214)
_______________
Gross Profit (Loss) (21,304,462)
Less: selling, general and administrative (16,542,813)
_______________
Operating Loss (37,847,275)
Interest Expense (5,805,227)
_______________
Net Loss $ (43,652,502)
Igene's 50% equity interest in the net loss $ (21,826,251)
_______________
Igene's Investment in and Advances to the Joint Venture (1,330,757)
_______________
Igene's suspended loss at June 30, 2007 $ (20,495,494)
===============
-12-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
The following statement displays the significant activity
for the Joint Venture for the three and nine months ended
September 30, 2007 and 2006.
Three Months Ended Nine Months Ended
_________________________________ _________________________________
Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006
_______________ _______________ _______________ _______________
Net Sales $ 3,544,013 $ 1,995,800 $ 10,607,873 $ 7,450,539
Less: manufacturing cost (4,277,044) (2,267,300) (16,746,356) (8,207,494)
_______________ _______________ _______________ _______________
Gross Profit (Loss) (733,031) (271,500) (6,138,483) (756,955)
Less: selling, general and admin (1,021,530) (897,000) (3,452,526) (2,780,319)
_______________ _______________ _______________ _______________
Operating Loss (1,754,561) (1,168,500) (9,591,009) (3,537,274)
Interest Expense (832,977) (495,100) (2,216,693) (1,619,300)
_______________ _______________ _______________ _______________
Net Loss $ (2,587,538) $ (1,663,600) $ (11,807,702) $ (5,156,574)
=============== =============== =============== ===============
50% equity interest $ (1,293,769) $ (831,800) $ (5,903,851) $ (2,578,287)
Igene's Repayments from and additional
(Investment in and
Advances to the Joint Venture) ( 97,404) 11,299 161,224 (6,964)
_______________ _______________ _______________ _______________
Igene's incremental suspended loss
for period $ (1,196,365) $ (843,099) $ (6,065,075) $ (2,571,323)
=============== =============== =============== ===============
(7) Stockholders' Deficiency
As of September 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 September 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 September 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.
As of September 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 September 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 September 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 nine-
month periods ended September 30, 2007 and 2006, are
based on 109,337,072 and 108,067,437 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 108,337,072 weighted average common
shares outstanding. No adjustment has been made for any
common stock equivalents outstanding because their effects
would be antidilutive as a result of the Company's losses.
As of September 30, 2007 and 2006, potentially dilutive
shares totaled 405,614,599 and 369,969,462, respectively.
-13-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
(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, 2008. 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.
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.
-14-
IGENE Biotechnology, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
(continued)
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 condensed consolidated financial
statements in conformity with accounting principles generally
accepted in the United States of America 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 condensed 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 nine-month periods ended September 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
$459,411 and decreases in prepaid expenses of $6,596 were
sources of cash. These were in addition to decreases due
from Joint Venture of $161,224.
o The carrying value of redeemable preferred stock was
increased by $5,344 in 2007 and $6,524 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 nine months ended September 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 September 30, 2007, total dividends in arrears on
Igene's preferred stock were $135,389 ($12.16 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. On October 31, 2007, the Joint Venture was
terminated. It is expected that all future sales in connection
with AstaXin(R) shall be recognized and recorded directly by
Igene.
Cost of sales and gross profit
As with Sales Revenue, Cost of Sales and Gross Profit were
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 attributed
poor or negative gross profit to a combination of pricing
pressure in the market and inefficiencies in production.
Additionally, no cost of sales was recorded as they are also
recorded as part of the Joint Venture activity. On October 31,
2007 the Joint Venture was terminated. It is expected that all
future Cost of Sales and Gross Profit in connection with
AstaXin(R) will be recognized and recorded directly by Igene.
-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 September 30, 2007 and 2006, Igene
recorded marketing and selling expense in the amount of $9,891
and $5,328, respectively, an increase of $4,563 or 86%. For the
nine months ended September 30, 2007 and 2006, Igene recorded
marketing and selling expense in the amount of $49,216 and
$95,538, respectively, a decrease of $46,322 or 48%. During the
second quarter of 2006, a Director of Marketing had been hired
directly through the Joint Venture, as a result the majority of
the marketing cost was incurred directly through the Joint
Venture rather than being incurred by Igene then being reimbursed
by the Joint Venture.
Research and development expenses
For the quarters ended September 30, 2007 and 2006, Igene
recorded research and development costs in the amount of $223,774
and $173,526, respectively, an increase of $50,248 or 29%. For
the nine months ended September 30, 2007 and 2006, Igene recorded
research and development costs in the amount of $721,060 and
$619,263, respectively, an increase of $101,797 or 16%. 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. However no assurances can be made in that regard.
These costs were funded through reimbursement from 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 quarters ended
September 30, 2007 and 2006 were $188,537 and $247,241
respectively, a decrease of $58,704 or 24%. General and
administrative expenses for the nine months ended September 30,
2007 and 2006 were $666,599 and $764,255 respectively, a decrease
of $97,656 or 13%. These costs are expected to remain at the
current level. During the nine months ended September 30, 2006,
1,000,000 shares of common stock were issued to the Company's new
Vice President of Manufacturing as part of his agreement in
accepting the position. The cost was expensed in the third
quarter as payroll expense, at a cost of $.05 per share, for a
total expense of $50,000. This is a one time cost. Igene works
to keep overhead costs at a reduced level and spends funds on
research and development efforts. A portion of this cost is
funded by reimbursement through the Joint Venture and the
remainder will need to be funded through profitable operations or
through contributions from directors, though none of these can be
assured. As of October 31, 2007, the Joint Venture has been
terminated, and as a result, the Joint Venture will no longer
reimburse these costs.
Interest expense
Interest expense for the quarters ended September 30, 2007
and 2006 was $552,995 and $560,996, respectively, a decrease of
$8,001 or 1%. This includes amortization of discount on Igene's
notes and debentures of $351,695 for the quarter ended September
30, 2007 and $351,694 for the quarter ended September 30, 2006.
For the nine months ended September 30, 2007 and 2006, interest
expense was $1,658,111 and $1,547,335, respectively, an increase
of $110,776 or 7%. This includes amortization of discount on
Igene's notes and debentures of $1,055,085 for the nine months
ended September 30, 2007 and $924,442 for the nine months ended
September 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)
Loss on disposal
During the three months ended September 30, 2007, Igene sold
equipment it had determined would not be of use in future
operations and recorded a gain on disposal of $5,692. This is a
one time occurrence.
Expenses reimbursed by Joint Venture
Under 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), were considered
costs of the Joint Venture and were reimbursed by the Joint
Venture. For the nine months ended September 30, 2007, costs
reimbursed by the Joint Venture totaled $1,436,653. The costs
covered $49,216 of marketing costs, $721,060 of research and
development costs and $666,377 of general and administrative
costs. For the nine months ended September 30, 2006, costs
reimbursed by the Joint Venture totaled $1,248,281. The costs
covered $95,538 of marketing costs, $619,263 of research and
development costs and $533,480 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 $584,582 and $577,066, respectively, for the quarters
ended September 30, 2007 and 2006, an increase in the loss of
$7,516 or 1%. This represents a loss of $.01 per basic and
diluted common share in the quarters ended September 30, 2007 and
2006.
Liquidity and Capital Resources
Historically, Igene has been funded primarily by equity
contributions and loans from stockholders and reimbursements
received from the Joint Venture. As of September 30, 2007, Igene
had working capital of $33,623, and cash and cash equivalents of
$155,830.
Cash used for operating activities during the nine-month
period ended September 30, 2007 and 2006 amounted to $104,180 and
$98,590, respectively, a decrease in cash used of $5,590.
Cash provided by (used in) investing activities during the
nine-month period ended September 30, 2007 and 2006 amounted to
$181,224 and $(6,964), respectively, an increase of $188,188 in
investing activity.
Cash provided by financing activities for the nine-month
period ended September 30, 2007 and 2006, amounted to $57,000
and $11,088, respectively. Financing activities during the nine
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 in order to continue as a going
concern. Management is currently in the process of reviewing
production facilities in an effort to replace the lost production
now that the Joint Venture with Tate and Lyle has been
terminated. Igene hopes to achieve profits from sales of the
inventory of AstaXin(R) remaining after the termination of the
Joint Venture. However, there can be no assurance that 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
Financial Condition and Results of Operations
(continued)
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. 2, 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. 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.
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 4, entitled "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 September 30, 2007, total dividends in arrears on
the Company's preferred stock total $135,389 ($12.16 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 10.1 - Separation Agreement dated October 31, 2007
between Igene Biotechnology, Inc. and Tate & Lyle
Fermentation Products Ltd., constituting Exhibit
10.1 to the Form 8-K filed by the Company on
November 6, 2007.
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 10.1 - Separation Agreement dated October 31, 2007
between Igene Biotechnology, Inc. and Tate & Lyle
Fermentation Products Ltd., constituting Exhibit
10.1 to the Form 8-K filed by the Company on
November 6, 2007.
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-