FORM 10QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 10549
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 0-15888 .
IGENE Biotechnology, Inc.
(Exact name of Registrant as specified in its charter)
Maryland 52-1230461
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
9110 Red Branch Road, Columbia, Maryland 21045-2024
(Address of principal executive officers) (Zip code)
Registrant's telephone number, including area code: (410) 997-2599
None
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by a check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X NO
The number of shares outstanding of the Registrant's $.01 par value Common
Stock as of September 30, 1997 is 19,143,973.
FORM 10QSB
IGENE Biotechnology, Inc.
INDEX
Page
PART I - FINANCIAL INFORMATION
Balance Sheets ................................................. 4
Statements of Operations ....................................... 5
Statements of Stockholder's Deficit ............................ 6
Statements of Cash Flows ....................................... 8
Notes to Financial Statements .................................. 10
Management's Discussion and Analysis of Financial
Conditions and Results of Operations ..................... 11
PART II - OTHER INFORMATION .......................................... 16
SIGNATURES ........................................................... 17
IGENE BIOTECHNOLOGY, INC.
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
PART I - FINANCIAL INFORMATION
IGENE Biotechnology, Inc.
Balance Sheets
<CAPTIONS>
September 30, September 30, December 31,
1997 1996 1996
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 304,581 $ 35,975 $ 41,339
Accounts receivable 14,494 47,509 9,996
Due from stockholders(note 6) 97,094 --- 16,870
Equipment held for resale 512,848 --- ---
Supplies --- 7,009 6,126
Deferred costs 92,731 --- ---
Prepaid expenses 947 953 4,652
Total current assets 1,022,695 91,446 78,983
Property and equipment, net 53,045 25,353 19,471
Security deposits 10,600 10,600 10,600
$ 1,086,340 $ 127,399 $ 109,054
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and
other accrued expenses 462,668 268,486 300,799
Debenture interest payable 90,000 60,000 45,000
Promissory Notes payable 2,332,500 558,770 717,000
Total current liabilities 2,885,168 887,256 1,062,799
Long term liabilities:
Variable rate subordinated debenture 1,500,000 1,500,000 1,500,000
Total liabilities 4,385,168 2,387,256 2,562,799
Redeemable preferred stock -- 8% cumulative,
convertible, voting, Series A,
$.01 par value per share;
redemption value $13.76,
$13.12 and $13.28 per share.
Authorized 920,000 shares;
issued 35,842 shares 493,186 470,247 475,982
Stockholders' deficit:
Preferred stock -- $.01 par value per share.
8% cumulative, convertible, voting,
Series A. Authorized and issued
187,500 shares (aggregate involuntary
liquidation value of $2,580,000,
2,460,000, and 2,490,000) 1,875 1,875 1,875
Common stock -- $.01 par value per share.
Authorized 35,000,000 shares; issued
19,143,973, 18,604,472, and
18,631,139 shares 191,440 186,045 186,311
Additional paid-in capital 18,062,529 17,917,221 17,971,220
Deficit (22,047,859) (20,835,245) (21,089,133)
Total stockholders' deficit (3,792,015) (2,730,104) (2,929,727)
$ 1,086,339 $ 127,399 $ 109,054
The accompanying notes are an integral part of the financial statemen
IGENE Biotechnology, Inc.
Statements of Operations
(Unaudited)
<CAPTIONS>
--- Three months ended ---
September 30, September 30,
1997 1996
Sales $ --- $ 9,241
Cost of sales --- 3,927
--- 5,314
Technology services income --- ---
Net revenue --- 5,314
Selling, general and administrative expenses:
Marketing and selling 2,681 1,323
Research, development and pilot plant 77,637 84,123
General and administrative 94,305 93,082
Total selling, general and
Administrative expenses 174,623 178,528
Operating loss (174,623) (173,214)
Other income (expenses):
Litigation expenses (280,000) ---
Investment income --- 105
Other income (expense) --- ---
Interest expense (86,996) (43,621)
Net loss (541,619) (216,730)
Deficit at beginning of period (21,506,240) (20,618,515)
Deficit at end of period $(22,047,859) $(20,835,245)
Net loss per common share $ (0.03) $ (0.01)
The accompanying notes are an integral part of the financial statements.
IGENE Biotechnology, Inc.
Statements of Stockholder's Deficit
(Unaudited)
<CAPTIONS>
Redeemable
Preferred Stock Preferred Stock Common Stock
(Shares/Amount) (Shares/Amount) Shares/Amount
Balance at
December 31, 1995 38,342/$484,643 187,500/$1,875 18,572,805/$185,728
Issuance of 26,667 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture --- --- 26,667/$267
Cumulative undeclared dividends
on redeemable
preferred stock 17,204 --- ---
Conversion of preferred
stock to common stock (2,500)/$(31,600) --- 5,000/$50
Net Loss for nine months ended
September 30, 1996 --- --- ---
Balance at
September 30, 1996 35,842/$470,247 187,500/$1,875 18,604,472/$186,045
Balance at
December 31, 1996 35,842/$475,982 187,500/$1,875 18,631,139/$186,311
Issuance of 40,000 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture --- --- 40,000/$400
Issuance of common stock through
Exercise of employee
Stock options --- --- 472,834/$4,729
Cumulative undeclared dividends
On redeemable preferred stock 17,204 --- ---
Net Loss for nine months ended
September 30, 1997 --- --- ---
Balance at
September 30, 1997 35,842/$493,186 187,500/$1,875 19,143,973/$191,440
IGENE Biotechnology, Inc.
Statements of Stockholder's Deficit
(Unaudited- Continued)
<CAPTIONS>
Total
Additional Stockholder's
Paid-In Capital Deficit Deficit
Balance at
December 31, 1995 $17,843,142 $ (20,312,260) $(2,281,515)
Issuance of 26,667 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture 59,733 --- 60,000
Cumulative undeclared
dividends on redeemable
preferred stock (17,204) --- (17,204)
Conversion of preferred
stock to common stock 31,550 --- 31,600
Net Loss for nine months ended
September 30, 1996 --- (522,985) (522,985)
Balance at June 30, 1996 $17,922,955 $(20,618,514) $(2,507,638)
Balance at December 31, 1996 $17,971,220 $(21,089,133) $(2,929,727)
Issuance of 40,000 shares
Of common stock in lieu of
Cash payment for interest
On subordinated debenture 89,600 --- 90,000
Issuance of common stock
through exercise of
employee stock options 18,913 --- 23,842
Cumulative undeclared
dividends on redeemable
preferred stock (17,204) --- (17,204)
Net Loss for nine months ended
September 30, 1997 --- (958,726) (958,726)
Balance at
September 30, 1997 $18,062,529 $(22,047,859) $(3,792,015)
The accompanying notes are an integral part of the financial statements.
IGENE Biotechnology, Inc.
Statements of Cash Flows
(Unaudited)
<CAPTIONS>
---Nine months ended---
September 30, September 30,
1997 1996
Cash flows from operating activities:
Net loss $( 958,726) $( 522,985)
Adjustments to reconcile
net income to net cash
provided by operating activities:
Depreciation 5,502 4,167
Interest on debenture
paid in shares of common stock 90,000 60,000
Decrease (increase) in:
Accounts receivable (4,498) (36,380)
Prepaid expenses, supplies
and deposits 9,831 (7,962)
Increase (decrease) in:
Accounts payable and other
Accrued expenses 206,869 27,359
Net cash used in
operating activities (651,022) (475,801)
Cash flows from investing activities:
Capital expenditures (39,075) ---
Purchase of equipment held for resale (512,848) ---
Deferred costs (92,731) ---
Net cash used in investing activities (644,654) ---
Cash flows from financing activities:
Issuance of promissory notes 1,615,500 458,770
Proceeds from issuance of common stock 23,642 ---
Decrease (increase) in amounts
Due from stockholders (80,224) 44,680
Net cash provided by
financing activities 1,558,918 503,450
Net increase in cash and
cash equivalents 263,242 27,649
Cash and cash equivalents
at beginning of period 41,339 8,326
Cash and cash equivalents at
end of period $ 304,581 $ 35,975
Supplementary disclosure of cash
flow information:
Cash paid during the year
for interest $ --- $ ---
Cash paid during the year
For income taxes --- ---
IGENE Biotechnology, Inc.
Statements of Cash Flows (continued)
(Unaudited)
Noncash investing and financing activities:
During 1997 and 1996 the Company issued 40,000 and 26,667 shares,
respectively, of common stock in each period in payment of interest on the
variable rate subordinated debenture. If paid in cash, the interest would have
been payable at 12% and 8% during 1997 and 1996, of $90,000 and $60,000,
respectively, in each period. Shares may be issued in lieu of cash under the
debenture agreement at the higher of $2.25 per share or market price per
share. The stock was issued and related interest was paid in 1997 and 1996 at
$2.25 per share, or $90,000 and $60,000, respectively, in each period.
During 1997 and 1996 the Company recorded dividends in arrears on 8%
redeemable preferred stock at $0.48 per share aggregating $17,204 in each
period which has been removed from paid-in capital and included in the
carrying value of the redeemable preferred stock.
The accompanying notes are an integral part of the financial statements.
IGENE Biotechnology, Inc.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) Unaudited Financial Statements
The financial statements presented herein as of September 30, 1997 and 1996
and for the three month and nine month periods ended September 30, 1997 and
1996 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 and results of operations. Such
financial statements do not include all of the information and footnote
disclosures normally included in audited financial statements prepared in
accordance with generally accepted accounting principles.
(2) Inventories
None.
(3) Stockholders' Equity
At September 30, 1997 and 1996, 71,684 shares of authorized but unissued
common stock were reserved for issuance upon conversion of the Company's
outstanding preferred stock.
As of September 30, 1997 and 1996, 2,000,000 shares of authorized but
unissued common stock were reserved for exercise pursuant to the 1986 Stock
Option Plan.
As of September 30, 1997 and 1996, 800,000 shares of authorized but
unissued common stock were reserved for issuance upon reinvestment of
interest on the variable rate subordinated debenture and 375,000 shares of
authorized but unissued common stock were reserved for issuance upon
conversion of the variable rate subordinated debenture.
As of September 30, 1997 and 1996, 51,141,548 and 24,588,248 shares,
respectively, of common stock were reserved for the conversion of
promissory notes and the issue of warrants attached to those notes. The
promissory notes are held by Directors of the Company and one individual
investor.
(4) Net Loss Per Common Share
Net loss per common share for the quarters ended September 30, 1997 and
1996 is based on 18,976,637 and 18,604,472 weighted average shares,
respectively. For purposes of computing net loss per common share, the
amount of net loss has been increased by cumulative undeclared dividends
in arrears on preferred stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Sales revenue for the quarter ended September 30, 1996 of $9,241, resulted from
sales of ClandoSanr. The Company has made only minimal marketing efforts for
this product in 1997 as it focused on development, production and marketing of
its AstaXinr product. Additional sales of ClandoSanr will depend on continued
marketing arrangements with distributors for the product and the Company's own
limited direct sales. Long term, the Company hopes to license rights to
manufacture, sell, and distribute ClandoSanr. The Company expects to continue
to focus its efforts on AstaXinr and has signed, on June 24, 1997, a toll
manufacturing agreement for the production of AstaXinr which is to begin no
later than December 31, 1997.
Research, development and pilot plant expenses decreased by 7.7% for the
current quarter when compared to the corresponding quarter in 1996. This
decrease was due to a one time field study for ClandoSanr in 1996.
Marketing expenses increased by 102.6% for the current quarter when compared
to the corresponding quarter in 1996 and are related primarily to the
Company's marketing expenses for AstaXinr and would be expected to increase if
production and sales increase, and will depend on marketing arrangements with
distributors of the product. This expense would be offset by revenue from sales
of product.
General and administrative expenses increased by approximately 1.3% for the
third quarter of 1997 over the same period in 1996. This reflects continuing
attempts to minimize administrative expenses during this period.
Interest expense for the quarter ended September 30, 1997 increased by
approximately 99.4% over the same period in the prior year and reflects
additional debt issued in the form of promissory notes to certain directors of
the Company and one individual investor.
Litigation expenses of $280,000 for the quarter ended September 30, 1997
represent legal fees incurred in the Company's suit against Archer Daniels-
Midland Inc. ("ADM") alleging theft of trade secrets and breach of contract
and in its defense of ADM's suit against the Company alleging patent
infringement.
Management expects to recover legal expenses through damage awards and/or
preservation of rights associated with the Company's product.
As a result of the foregoing, the Company reported a net loss of $541,619, or
$.03 per common share during the third quarter of 1997, compared to a net loss
of $216,730, or $.01 per common share in the same period in 1996. The weighted
average number of common shares outstanding increased to 18,976,637, in the
third quarter of 1997 compared to 18,604,472 in the third quarter of 1996.
This increase in shares reflects the semi-annual issuance of common stock as
payment of interest on a variable note subordinated debenture and the issue of
472,834 shares for exercise of employee stock options.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Financial Position
In December 1988, 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 cumulate for future payment or
increase the liquidation preference or redemption value of the preferred stock.
As of September 30, 1997, total dividends in arrears on the Company's preferred
stock was $1,286,450, of which $206,450 ($5.76 per share) was included in the
carrying value of the redeemable preferred stock and $1,080,000 ($5.76 per
share) is included in the liquidation preference of the limited redemption
preferred stock.
Liquidity and Capital Resources
Historically, the Company has been funded primarily by equity contributions,
loans from stockholders and license fees. As of September 30, 1997, the
Company had a working capital deficit of approximately $1,862,473, and cash and
cash equivalents of $304,581, consisting of proceeds from Promissory Notes
issued to certain Directors and an individual investor of the Company described
below.
Cash used by operations in the nine months ended September 30, 1997 and 1996
amounted to $651,022 and $475,801, respectively. To date, the Company has
achieved only minimal sales of its ClandoSanr and AstaXinr products while it
seeks additional manufacturing capability for AstaXinr.
$644,654 was used by investing activities for the nine months ended September
30, 1997. This includes an investment of $512,848 in equipment to be resold
and deferred costs of $92,731 relating to an agreement to manufacture
AstaXinr as described below, and $39,075 in equipment required at Igene's
facilities to perform test runs for production of AstaXinr.
The following is a summary of the Company's financing activities for 1996 and
the nine months ended September 30, 1997:
On February 9, 1996 and March 11, 1996, the Company issued demand promissory
notes to certain directors of the Company for an aggregate consideration of
$140,000. These notes specify that at any time prior to repayment the holder
has the right to convert the note to common stock of the Company at $.10 per
share (the then current market price) per share for the note issued February 9,
1996 and at $.09 (the then current market price) per share for the note issued
March 11, 1996. In connection with such issuance, the holders received
warrants for an equivalent number of shares of common stock exercisable at
$.10 per share for the note issued February 9, 1996 and exercisable at $.09 per
share for the note issued March 11, 1996.
On April 23, May 9, and June 7, 1996, the Company issued demand promissory
notes to certain directors of the Company for an aggregate consideration of
$177,000. These notes specify that at any time prior to repayment the holder
has the right to convert the note to common stock of the Company at $.06 (the
then current market price) per share for the notes issued April 23, 1996 and
May 9, 1996, and $.05 (the then current market price) per share for the note
issued June 7, 1996. In connection with such issuance, the holders received
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
warrants for an equivalent number of shares of common stock exercisable at
$.06 per share for the notes issued April 23, 1996 and May 9, 1996, and
exercisable at $.05 for the note issued June 7, 1996.
On July 24, and September 24, 1996, the Company issued demand promissory notes
to certain directors of the Company for an aggregate consideration of $160,000.
These notes specify that at any time prior to repayment the holder has the
right to convert the note to common stock of the Company at $.115 (the then
current market price) per share for the note issued July 24, 1996, and $.125
(the then current market price) per share for the note issued September 24,
1996. In connection with such issuances, the holders received warrants for an
equivalent number of shares of common stock exercisable at $.115 per share for
the note issued July 24, 1996, and exercisable at $.125 per share for the note
issued September 24, 1996.
On November 13, and December 11, 1996, the Company issued demand promissory
notes to certain directors of the Company for an aggregate consideration of
$140,000. These notes specify that at any time prior to repayment the holder
has the right to convert the notes to common stock of the Company at $.09 (the
then current market price) per share. In connection with such issuance, the
holders received warrants for an equivalent number of common stock exercisable
at $.09 per share.
On January 14, 1997, and February 24, 1997, the Company issued promissory notes
to certain directors of the Company for an aggregate consideration of $170,000.
These notes specify that at any time prior to repayment the holder has the
right to convert the note to common stock of the Company at $.07 (the then
current market price) per share for the note issued January 14, 1997, and $.11
(the then current market price) per share for the note issued February 24, 1997.
In connection with such issuance, the holders received warrants for an
equivalent number of shares of common shares exercisable at $.07 per share for
the note issued January 14, 1997, and exercisable at $.11 per share for the
note issued February 24, 1997.
On April 3 and 4, 1997, the Company issued demand promissory notes to certain
directors of the Company for an aggregate consideration of $99,500. These
notes specify that at any time prior to repayment the holder has the right to
convert the notes to common stock of the Company at $.10 (the then current
market price) per share. In connection with such issuance, the holders
received warrants for an equivalent number of shares of common stock
exercisable at $.10 per share.
On May 8 and 9, 1997, the Company issued demand promissory notes to certain
directors of the Company for an aggregate consideration of $136,000. These
notes specify that at any time prior to repayment the holder has the right to
convert the notes to common stock of the Company at $.135 (the then current
market price) per share. In connection with such issuance, the holders
received warrants for an equivalent number of shares of common stock exercisable
at $.135 per share.
On June 5, 1997, the Company issued demand promissory notes to certain
directors of the Company, as well as one individual investor, for an aggregate
consideration of $250,000. These notes specify that at any time prior to
repayment the holder has the right to convert the notes to common stock of the
Company at $.10 (the then current market price) per share. In connection with
such issuance, the holders received warrants for an equivalent number of shares
of common stock exercisable at $.10 per share.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
On June 24, 1997, Igene signed a non-exclusive toll manufacturing agreement
with Fermic, S.A. de C.V. of Mexico (Fermic) for the production of AstaXinr,
its natural astaxanthin pigment. The agreement provides that Fermic will
manufacture, store, package and ship AstaXinr for Igene using Fermic's
facilities and production capacity. Igene agrees to provide raw materials,
patented processes and other proprietary knowledge. In consideration of a
twenty-three month, 10% note to Igene, Fermic agrees to purchase manufacturing
equipment, to be obtained and installed by Igene, at cost, for up to $500,000.
Igene will retain a security interest in the equipment sold to Fermic. Igene
plans to finance this agreement with shareholder loans. Igene has expended
$512,848 for manufacturing equipment to be sold to Fermic as of September 30,
1997. Igene has also expended $92,731 for raw materials and other costs to
complete pilot plant test runs as of September 30, 1997, which has been
included as deferred costs on the Company's September 30, 1997 Balance Sheet.
Igene will pay Fermic a toll-manufacturing fee to be based on production
capacity. Large-scale production was to begin no later than October, 1997,
but this deadline has been extended to Decmeber 31, 1997. Igene plans to
market and distribute AstaXinr to meet an expected demand for the product.
This agreement terminates on December 31, 1997 and may be extended, at Igene's
option, to December 31, 1998.
In the long-term, the Company is also continuing its development of additional
AstaXinr technology, which it hopes to license and market to benefit future
periods.
On July 3, 1997, the Company cancelled demand promissory notes issued on
May 9, 1997 as prepayment on a series of demand promissory notes to certain
directors of the Company for an aggregate consideration of $40,000. These
notes were replaced by demand notes issued July 3, 1997 to certain directors of
the Company, as well as one individual investor, for an aggregate consideration
of $250,000. These notes specify that at any time prior to repayment the holder
has the right to convert the notes to common stock of the Company at $.10 (the
then current market price) per share. In connection with such issuance, the
holders received warrants for an equivalent number of shares of common stock
exercsiable at $.10 per share.
On July 16, 1997, Mr. Dexter Gaston, a former CEO of the Company exercised
100,000 of employee stock options at the exercise price of $.05 per share
($5,000). On August 6, 1997, Mr. Dexter Gaston exercised an additional 372,834
options at $.05 per share ($18,642).
On July 29, 1997, the Company issued demand promissory notes to certain
directors of the Company, as well as one individual investor, for an aggregate
consideration of $250,000. These notes specify that at any time prior to
repayment the holder has the right to convert the notes to common stock of the
Company at $.10 (the the current market price) per share. In connection with
such issuance, the holders received warrants for an equivalent number of shares
of common stock exercisable at $.10 per share.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
On September 4, and September 24, 1997, the Company issued demand promissory
notes to certain directors of the Company, as well as one individual investor,
for an aggregate consideration of $500,000. These notes specify that at any
time prior to repayment the holder has the right to convert the notes to common
stock of the Company at $.10 (the then current marekt price) per share. In
connection with such issuance, the holders received warrants for an equivalent
number of shares of common stock exercisable at $.10 per share.
The Company does not believe that inflation has had a significant impact on the
Company's operations during the past two years.
FORM 10QSB
IGENE Biotechnology, Inc.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
A Civil Suit was filed by the Company on August 4, 1997 in the U.S. District
Court in Baltimore, Maryland against Archer Daniels Midland, Inc. alleging
theft of trade secrets and breach of contract. The suit seeks damages of
$300,450,000.
A Civil Suit was filed by Archer Daniels Midland, Inc. on July 21, 1997, 1997
in the U.S. District Court in Greenbelt, Maryland against the Company alleging
patent infringement. The suit seeks an injunction against Igene to cease its
activities relating to the alleged infringement. Management believes that
this suit has no merit.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
Item 7. Subsequent Events
In October of 1997 the deadline for the beginning of large-scale production
under the toll-manufacturing agreement with Fermic was extended to December 31,
1997.
On October 20, 1997, the Company issued demand promissory notes to certain
directors of the Company, as well as one individual investor, for an aggregate
consideration of $250,000. These notes specify that at any time prior to
repayment the holder has the right to convert the notes to common stock of the
Company at $.10 (the then current market price) per share. In connection with
such issuance, the holders received warrants for an equivalent number of common
stock exercisable at $.10 per share.
On November 3, 1997, Mr. Patrick F. Monahan, a Director of the Company
exercised 10,000 of employee stock options at the exercise price of $.05 per
share ($500.00).
FORM 10QSB
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
IGENE Biotechnology, Inc.
(Registrant)
Date: November 14, 1997
/s/ Stephen F. Hiu
Stephen F. Hiu
President, Treasurer and
Secretary
(On behalf of the Registrant and as
Principal Financial Officer)