SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 28,
2008
IGENE BIOTECHNOLOGY, INC.
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(Exact Name of Registrant as Specified in its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation or Organization)
0-15888 52-1230461
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(Commission (I.R.S. Employer
File No.) Identification No.)
9110 Red Branch Road, Columbia, Maryland 21045-2024
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(Address of Principal Executive Offices) (Zip Code)
(410) 997-2599
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(Registrant's Telephone Number, Including Area Code)
N/A
_____________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-
2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-
4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.02 Non-Reliance on Previously Issued Financial Statements
or a Related Audit Report or Completed Interim Review.
On September 27, 2007, we determined there were errors in
the Company's financial statements resulting from the accounting
for warrants issued with certain of our debt obligations. The
financial statements included in the Annual report on Form 10-KSB
for the year ended December 31, 2006 and the Quarterly report on
Form 10-QSB for the three months ended March 31, 2007 (prior to
the restatement as discussed below) should no longer be relied
upon.
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
blockage discounts to the value of the shares. Based on the
application of illiquidity discounts, the Company initially
believed that it would be an immaterial adjustment to record a
valuation to the shares underlying the warrants.
However, the Company subsequently determined it needed to
value the shares underlying the warrants 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. The Company has
historically reported the warrants issued in connection with the
Notes as having zero value and has not recognized any discount on
the Notes but rather recorded the full face value of the Notes as
Long Term Debt in its consolidated financial statements.
Applying the Black Scholes model of valuation to the warrants,
original issue discount is now applied to the Notes in an amount
corresponding to the valuation of the warrants.
As a result of the above, the Registrant restated the
financial statements included in its annual report on Form 10-KSB
for the year ended December 31, 2006, and the Form 10-QSB for the
three months ended March 31, 2007.
The management of the Company and the Audit Committee of the
Board of Directors of the Company discussed the matter contained
herein with the Company's independent registered public
accounting firm.
Signature
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
IGENE BIOTECHNOLOGY, INC.
By: /S/ STEPHEN F. HIU
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STEPHEN F. HIU
President
Date: February 7, 2008