UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended November 30, 2001
Commission File Number: 17598
CONSYGEN, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Texas 76-0260145
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 South 52nd Street, Tempe, Arizona 85281
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(480) 394-9100
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports 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 was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
62,970,263 shares of Common Stock, $.003 par value,
as of February 15, 2002.
1
CONSYGEN, INC.
INDEX
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements.
Consolidated Balance Sheet, November 30, 2001. . . . . . . 3
Consolidated Statements of Operations -
Three and Six Months Ended November 30, 2001 and
November 30, 2000. . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
Six Months Ended November 30, 2001 and
November 30, 2000. . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 12
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 13
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 15
Item 4. Submission of Matters to a Vote of Security Holders. 15
Item 5. Other Information. . . . . . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 17
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS REPORT AND IN DOCUMENTS
INCORPORATED BY REFERENCE HEREIN CONSTITUTE "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THIS PURPOSE, ANY
STATEMENTS CONTAINED HEREIN OR INCORPORATED BY REFERENCE HEREIN THAT ARE
NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING
STATEMENTS. WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "PLANS,"
"ANTICIPATES," "EXPECTS," "ESTIMATES," AND SIMILAR EXPRESSIONS ARE INTENDED
TO IDENTIFY FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT
THE ASSUMPTIONS ON WHICH SUCH FORWARD-LOOKING STATEMENTS ARE BASED ARE
REASONABLE,THERE CAN BE NO ASSURANCE THAT SUCH ASSUMPTIONS WILL PROVE TO BE
ACCURATE, AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED
IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MAY CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE SET FORTH UNDER THE
CAPTION "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS REPORT.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSYGEN, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
November 30,
2001
------------
ASSETS
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . . . . . $ 655
Accounts Receivable . . . . . . . . . . . . . . . . . 3,583
Inventory . . . . . . . . . . . . . . . . . . . . . . 87,926
Prepaid Expenses. . . . . . . . . . . . . . . . . . . 14,388
Other Current Assets. . . . . . . . . . . . . . . . . 708
-----------
Total Current Assets . . . . . . . . . . . . . . . 107,260
-----------
Property and Equipment - Net. . . . . . . . . . . . . . 1,021,562
-----------
Other Assets:
Debt Issuance Expense . . . . . . . . . . . . . . . . 21,280
Other Assets. . . . . . . . . . . . . . . . . . . . . 234,470
-----------
Total Other Assets . . . . . . . . . . . . . . . . 255,750
-----------
Total Assets . . . . . . . . . . . . . . . . . . . $ 1,384,572
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable. . . . . . . . . . . . . . . . . . . $ 875,114
Notes Payable . . . . . . . . . . . . . . . . . . . . 2,071,988
Accrued Payroll and Related Liabilities . . . . . . . 1,744,122
Deferred Revenue. . . . . . . . . . . . . . . . . . . 705,200
Other Accrued Liabilities . . . . . . . . . . . . . . 928,015
Deposits on Common Stock to be Issued . . . . . . . . 415,396
Capital Lease - Current portion . . . . . . . . . . . 14,961
Mortgage - Current Portion. . . . . . . . . . . . . . 907,061
-----------
Total Current Liabilities. . . . . . . . . . . . . 7,661,857
Capital Lease - Long Term Portion . . . . . . . . . . . 15,199
Mortgage - Long Term Portion. . . . . . . . . . . . . . 504,760
-----------
Total Liabilities. . . . . . . . . . . . . . . . . 8,181,816
-----------
Commitments & Contingencies
Stockholders' Equity :
Common Stock, $.003 par Value, Authorized
69,000,000 Shares, issued and outstanding
55,396,930 Shares at November 30, 2001 . . . . . . . 166,461
Additional Paid-in Capital. . . . . . . . . . . . . . 36,469,101
Accumulated Deficit . . . . . . . . . . . . . . . . . (43,017,081)
Treasury Stock, at cost (90,000 shares) . . . . . . . (415,725)
-----------
Total Stockholders' Equity . . . . . . . . . . . . (6,797,244)
-----------
Total Liabilities and Stockholders' Equity . . . . $ 1,384,572
===========
The accompanying notes are an integral part of the financial statements.
3
CONSYGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months For the Six Months
Ended November Ended November
------------------------ ------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Counterfeit Cop
Revenue . . . . . .$ 4,828 $ 35,810 $ 8,243 $ 779,439
Other Revenue . . . . 1,210 -- 1,210 --
----------- ----------- ----------- -----------
Revenues. . . . . . . 6,039 35,810 9,454 779,439
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of Sales . . . 1,257 12,757 1,932 212,030
Software Develop-
ment. . . . . . . -- 415,227 -- 710,767
Selling, General
and Administrative
Expenses . . . . . 513,391 778,650 1,203,215 1,691,948
Interest Expense. . 60,211 276,119 120,877 434,105
Depreciation and
Amortization . . . 42,208 40,968 84,329 82,829
----------- ----------- ----------- -----------
Total Costs and
Expenses. . . . 617,067 1,523,721 1,410,353 3,131,679
----------- ----------- ----------- -----------
Loss from Operations. (611,028) (1,487,911) (1,400,899) (2,352,240)
Interest Income . . . -- -- -- --
Other Income. . . . . -- -- -- 275
Other Expenses. . . . 55,555 -- 55,555 --
----------- ----------- ----------- -----------
Net Loss. . . . . . .$ (555,473)$(1,487,911)$(1,345,344) $(2,351,965)
=========== =========== =========== ===========
Weighted Average
Common Shares
Outstanding. . . . . 54,213,456 32,881,687 53,569,150 29,069,828
=========== =========== =========== ===========
Net Loss per
Common Share . . . .$ (0.01)$ (0.05)$ (0.03) $ (0.00)
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
4
CONSYGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended
November 30,
-------------------------
2001 2000
----------- -----------
Cash Flows from Operating Activities:
Net Loss. . . . . . . . . . . . . . . . . $(1,345,344) $(2,351,965)
Adjustments to Reconcile Net Loss to
Net Cash (Used) by Operating Activities:
Depreciation and amortization . . . . . 84,329 82,829
Amortization of deferred financing costs -- 58,189
Changes in Operating Assets and
Liabilities:
Accounts Receivable . . . . . . . . . 1,947 14,187
Inventories . . . . . . . . . . . . . 34,997 195,885
Prepaid Expenses and Other Assets . . (22,639) 144,591
Accounts Payable. . . . . . . . . . . 122,177 217,122
Accrued Liabilities . . . . . . . . . 651,603 278,041
----------- -----------
Net Cash (Used) by
Operating Activities. . . . . . (472,930) (1,361,121)
----------- -----------
Cash Flows from Investing Activities:
Advances on note receivable . . . . . . . -- (34,200)
Purchases of Furniture and Equipment. . . (6,788) (22,165)
Investment in joint venture . . . . . . . -- (20,000)
----------- -----------
Net Cash (Used) by
Investing Activities. . . . . . . (6,788) (76,365)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from Sale of Common Stock. . . . 185,994 867,184
Payments of principal on loans. . . . . . (2,500) (12,355)
Bank overdraft. . . . . . . . . . . . . . -- 102,111
Proceeds of Loans payable --
Related Parties . . . . . . . . . . . . 138,468 461,694
Proceeds on other notes payable . . . . . 21,386 58,897
Proceeds on collection of stock
subscriptions receivable. . . . . . . . 148,000 --
Purchase of treasury stock. . . . . . . . -- (15,725)
Payments of principal on capital
lease obligations . . . . . . . . . . . (12,465) (27,925)
----------- -----------
Net Cash Provided by
Financing Activities. . . . . . . 478,883 1,433,881
----------- -----------
Net Decrease in Cash and Cash Equivalents . (835) (3,605)
Cash and Cash Equivalents --
Beginning of Period . . . . . . . . . . . 1,490 3,605
----------- -----------
Cash and Cash Equivalents --
End of Period . . . . . . . . . . . . . . $ 655 $ --
=========== ===========
5
CONSYGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)
For the Six Months Ended
November 30,
-------------------------
2001 2000
----------- -----------
Supplemental Cash Flow Information:
Cash Paid for Interest. . . . . . . . . . $ 34,917 $ 76,817
=========== ===========
Non-Cash Financing and Investing Activities:
Equipment acquired under capital lease. . $ -- $ 52,054
=========== ===========
Common stock issued to settle obligations $ 304,900 $ --
=========== ===========
Conversion of debt to common stock. . . . $ 408,906 $ 651,190
=========== ===========
Issuance of common stock for prepaid
professional fees . . . . . . . . . . . $ -- $ 287,505
=========== ===========
Issuance of common stock for equipment. . $ -- $ 283,500
=========== ===========
The accompanying notes are an integral part of the financial statements.
6
CONSYGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2000 (Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of
ConSyGen, Inc., a Texas corporation ("ConSyGen-Texas") and its wholly-owned
subsidiary, ConSyGen, Inc., an Arizona corporation ("ConSyGen-Arizona").
Significant inter-company accounts and transactions have been eliminated.
ConSyGen-Texas and its wholly-owned subsidiary ConSyGen-Arizona are
hereafter collectively referred to as the "Company."
In the opinion of the Company, the accompanying unaudited consolidated
financial statements reflect all adjustments necessary to present fairly
the results of operations and cash flows for the periods presented.
Wherever appropriate, adjustments include provisions for the changes in
business activities during the quarter ended November 30, 2001.
Results of operations indicate that the Company continues to suffer
from a declining business environment, and that it is currently unable to
continue its operations without very substantial additional funding. Based
on this situation, management determined in the third quarter of the 2001-
2002 fiscal year that the Company should cease its present operations,
should actively seek to sell the Company's remaining assets, and should
seek an appropriate corporate entity as a candidate for merger of
operations. We have terminated all Company staff, and have adopted a
proposal for an informal re-organization of the Company. As part of this
re-organization, we have appointed a new President and Chief Executive
Officer, and are actively pursuing the sale of the Company's assets and the
search for a merger candidate. The financial statements presented in this
Form 10-QSB reflect the decline in the Company's business activities up to
the end of the quarter ended November 30, 2001. It is the Company's
intention to classify our operations as discontinued operations effective
in the third fiscal quarter, as it was in this quarter that the formal plan
to discontinue the operations was adopted, and future financial statements
are expected to reflect this action. Management believes that it will
begin negotiations with creditors in the fiscal third and fourth quarters.
Because of the high debt load, we believe that creditors will have
incentive to negotiate balances to levels lower than the current carrying
value of those obligations. At the present time, the Company has no data to
estimate the value of its assets upon disposition nor the value of
obligations upon the ultimate disposition or renegotiation.
The Company's headquarters office building is undergoing refinancing
by a lien-holder, Corporate Fiducial Services, Inc. ("CFS"). Management
believes that the property value is greater than the current net book
value, and does not expect that any further obligation will be created to
the Company by this pending transaction.
NOTE 2 - STOCKHOLDERS' EQUITY (DEFICIT)
STOCK OPTIONS
By an Addendum dated April 13, 2001 to their respective employment
agreements, the outstanding, unexercised balances of option shares for the
Company's executive officers were relinquished to the Company. The
returned option totals were: Mr. A. Lewis Burridge, 2,000,000; Mr. Jason
Genet, 1,338,000; Mr. John Roskelley, 1,240,000; and Mr. Eric Strasser,
1,265,000. By a further Addendum in September 2001, which addendum
superseded and replaced that of April 13, 2001, each of Messrs. Burridge,
Roskelley and Strasser agreed to waive his rights to exercise the
unexercised balances of his option shares until such time as the Company
increased the number of its authorized shares of common stock to at least
125,000,000 shares. In consideration of this waiver, the exercise price of
such options was reduced. The reduced exercise price exceeded the trading
price of the stock at November 30, 2001.
7
As of November 30, 2001, we had outstanding options to purchase
426,000 shares of our common stock at a weighted average exercise price of
$0.50, all of which were held by former employees whose expiration dates
have not yet been reached. In September 2001, we requested forfeitures of
stock options from employees, directors and an investor, due to the
limitation on our number of authorized common shares. The employees and
directors collectively agreed to forfeit 1,932,725 options and the investor
agreed to forfeit 110,500 options. We agreed to grant the employees and
directors 2,125,998 options upon the approval of a proposed increase in the
authorized limit of our common stock to 125,000,000 shares. The 110,500
options were to be replaced with the same number of options but at a
reduced exercise price, which was higher than the trading price of the
stock at November 30, 2001.
In September 2001, following the above agreements with certain staff,
directors, and investors to voluntarily return certain of their shares,
options and warrants to the Company, we issued stock option agreements to
Messrs. Robert Reisch, Tony Perre, and Bruce Shirey for 1,000,000
immediately-exercisable options each. On October 19, 2001, the stock
option agreements for Messrs. Reisch and Perre were effectively terminated
by the resignations of these officers. The stock option agreement for Mr.
Bruce Shirey was effectively terminated by his resignation on December 12,
2001. There was no effect on the loss from operations for return of these
options.
On November 30, 2001, we filed a Form S-8 registration statement for
registration of an additional 3,800,000 shares. With this registration
statement, we have filed Form S-8 registration statements under the
Securities Act registering an aggregate of 14,300,000 shares of common
stock issueable under our stock option plans.
Also on November 30, 2001, we issued a non-qualified stock option
agreement to Mr. Howard R. Baer, a consultant and former Chairman, for
3,250,000,000 immediately-exercisable shares for certain services rendered
to the Company. In addition, we issued a non-qualified stock option
agreement for 550,000 immediately-exercisable shares to an investor and
consultant for certain services rendered to the Company, including his
return of 550,000 shares to the Company on November 29, 2001. On November
30, 2001, Mr. Baer exercised his option in a cashless transaction. On
December 10, 2001, we issued a total of 3,033,333 shares to Mr. Baer, and
216,667 shares were returned to the Company in consideration for the
exercised option. In December 2001, the investor and consultant exercised
his option for 550,000 shares in a cashless transaction, which has not yet
been completed. Under this transaction, he is to receive 513,333 shares of
common stock, and is to return 36,667 shares to the Company in
consideration for the exercised option.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the Company's Consolidated Financial Statements and the Notes thereto
appearing elsewhere in the Report. The Company and its wholly-owned
subsidiary, ConSyGen-Arizona, are herein collectively referred to as the
"Company."
OVERVIEW
Historically, we have developed pre-packaged software and proprietary
products and services. However, over the past two years we have moved our
specific emphasis to identifying developing software-related business
opportunities and technologies and providing timely and effective software-
based solutions for these opportunities.
8
Due to a series of changes in our product markets, to our inability to
create a major market with the COUNTERFEIT COP product, and also due to our
inability to create a market for the BIZPAY SUITE software that we have
been developing for the last two years, we have reached a position in our
business where we are no longer able to meet our regular financial
commitments. During the three months ended November 30, 2001, we reduced
our staff to only four employees in order to cut costs, and we have been
aggressively seeking to find a purchaser of our Business Products Division,
including all rights and inventory of the COUNTERFEIT COP product. We have
also terminated our MultiMedia Division, founded in August, 2000. On
December 19, 2001, we terminated all remaining staff.
Since our issued shares and shares committed for issuance have almost
reached our authorized number of shares, we have exhausted our ability to
use our remaining authorized but unissued shares as a basis for further
external financing. This shortage of available shares, together with a
very substantial decline in the market price of our common stock, has made
the use of such unissued common stock as we have available impractical as a
basis for external financing.
On January 7, 2002, we accepted a proposal from NewBridge Capital
Partners, L.L.C. ("NewBridge") for an informal re-organization of the
Company, and we appointed Mr. Gregory A. Harrington, Managing Director of
NewBridge, as our President and Chief Executive Officer. This appointment
was subject to completion of certain due diligence, and was made official
on January 23, 2001. The NewBridge proposal, which is attached as an
Exhibit to this Form 10-QSB, has the intention of avoiding formal
bankruptcy proceedings, of clearing all outstanding Company liabilities
through the sale and realization of the Company's assets, and of effecting
the eventual merger of the Company with a suitable corporate entity.
On January 16, 2002, we entered into an Agreement with Beckwith
Management, Ltd. ("Beckwith") and Corporate Fiducial Services, Inc. ("CFS")
for the sale of our Business Products Division. Under this agreement, we
agreed to transfer to Beckwith ownership of our inventory of the
COUNTERFEIT COP product; all of our intellectual, patent, and manufacturing
rights to the COUNTERFEIT COP; and all marketing literature and collateral
related to the COUNTERFEIT COP. In payment for these items, Beckwith
agreed to waive our obligations on certain outstanding Promissory Notes
with an aggregate total of $155,000, to assume responsibility for a
$265,000 liability due to CFS for prior unpaid loans, unpaid mortgage
obligations, and certain payments by CFS on our behalf. Under the
Agreement, the Company will receive a payment of $17,976, representing the
aggregate amount remaining from the sale of the Business Products Division
after the satisfaction of the other obligations.
We are actively engaged in seeking a purchaser for the BIZPAY SUITE
software.
Legal Proceedings - see under Part II. Other Information, Item 1:
"Legal Proceedings" of this Form 10-QSB.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
NET LOSSES. For the three and six months ended November 30, 2001, we
incurred net losses of $555,473 and $1,345,344, compared with net losses of
$1,487,911 and $2,351,965 for the three and six months ended November 30,
2000, a decrease of $932,438 and $1,006,621, respectively. An explanation
of these losses is set forth below.
REVENUE. For the three and six months ended November 30, 2001, we had
revenues of $6,039 and $9,454, compared to $35,810 and 779,439 for the same
periods in the previous year. The very substantial decrease in revenue for
both periods reflects the Company's virtual inability to generate
acceptance of the BIZPAY SUITE, which was released in the first quarter of
2001, and our inability to create a market for the COUNTERFEIT COP product.
There were no significant sales for the quarter from our master
distributors.
9
During the year ended May 31, 2001, we received approximately $705,000
from a customer for the sale of 11,000 units of the Counterfeit Cop. The
customer has stored the units in the same warehouse where the Company
stores its inventory. In order to obviate any need for financial
adjustments from returns, we will not recognize the revenue effect of this
transaction until shipment and acceptance are completed. The amount
continues to be reported as Deferred Revenue at November 30, 2001.
COST OF SALES. For the quarter ended November 30, 2001, the entire
cost of sales expense ($1,257) was the cost of COUNTERFEIT COP units sold.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $513,391 and $1,023,215 for the three and six
months ended November 30, 2001, compared with $778,650 and $1,691,948 for
the same periods in the previous year. The $265,259 decrease in selling,
general and administrative expenses in the three months and $668,733
decrease for the six months ended November 30, 2001 is primarily
attributable to the dramatic reduction in staffing during the respective
periods. Additionally, management continued to apply stringent controls
over costs, based on our extremely limited access to financing.
INTEREST EXPENSE. For the three months and six months ended
November 30, 2001, interest expense was $60,211 and $120,877, compared with
$276,119 and $434,105 for the same quarter in the previous year, a decrease
of $215,908 and $313,228, respectively. The decrease in interest expense is
primarily attributable to the elimination of the interest component related
to the previously-outstanding Convertible Debentures, which were eliminated
prior to the May 31, 2001. The primary expense for each of the two
quarters to November 30, 2001 is interest expense of approximately $56,000
on the re-structured loan and mortgage obligations on our property.
DEPRECIATION AND AMORTIZATION EXPENSE. For the three months and six
months ended November 30, 2001, depreciation and amortization expense was
$42,208 and $84,329, compared with $40,968 and $82,829 for the previous
year. The marginal increase indicates that there has been no major growth
in depreciable items, primarily due to a shortage of operating capital. As
we have retired some depreciable assets, we have primarily replaced them
with leased assets.
MATERIAL CHANGES IN FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company has continued to suffer material operating losses, and has
reached a position where it is no longer able to meet its current
obligations. We have been unable to generate revenues from either of our
major products - the COUNTERFEIT COP and the BIZPAY SUITE. In addition,
the Company has had only limited success in generating financing for daily
operations, and has been unsuccessful in attracting the substantial
additional financing needed to sustain the Company through any further
development of our products. This has meant that we have had no means of
enhancing our products to make them more marketable, or of creating any new
marketing initiatives. Although Company management has reduced staffing to
only those employees needed for the Company's survival, we are still unable
to meet our current obligations, and we are clearly unable to implement our
business plan or to survive as a ongoing business in our present financial
condition.
The Company has determined that it must commence a process of asset
divestiture if it will be able to survive in any form in the future.
During the quarter ended November 30, 2001, we actively sought the sale of
our Business Products Division, with the intention that the proceeds of
such sale would be used to assist in meeting current obligations. However,
our attempts at selling this Division were unsuccessful. Added to this,
the failure of our BIZPAY SUITE to meet its expected revenue targets, and
the determination which has now been made of the additional effort which
will be needed to achieve BIZPAY's market acceptance, indicates that we
will not be able to continue in business without the substantial infusion
of capital.
10
The Company's requirement for additional capital, and its inability to
provide adequate equity to attract this capital, means that the resources
necessary to complete the development of the BIZPAY SUITE are not expected
to be available, or will be too late to allow the Company to recover from
its present financial condition. Accordingly, Company management has
accepted a proposal for informal re-structuring, with the intention of the
liquidation of the Company's assets and our eventual merger with another
corporate entity.
As discussed above, we will attempt to negotiate the amounts due to
our creditors to amounts considerably lower than the current carrying
value. However, than can be no assurances that we will be successful in
doing so. Also, we have material past due payroll taxes, penalties and
interest that typically are extremely difficult to negotiate.
As of November 30, 2001, the Company had cash on hand of approximately
$655, compared with approximately $6,120 at August 31, 2001, representing
an aggregate decrease in cash of $5,465 for the period. This was primarily
composed of:
OPERATING ACTIVITIES: during the three months ended November 30, 2001,
we used approximately $473,000 in cash for operating activities, primarily
in selling, general and administrative expenses.
INVESTING ACTIVITIES: during the three months ended November 30, 2001,
we used approximately $7,000 in the purchase of furniture and equipment.
FINANCING ACTIVITIES: during the three months ended November 30, 2001,
we received an aggregate of approximately $479,000 from financing
activities, including $185,000 from the sale of our common stock,
approximately $138,000 from Loans Payable to related parties, and $148,000
from subscriptions receivable prior to May 31, 2001.
The Company had a working capital deficit of approximately $7,555,000
at November 30, 2001, compared with a working capital deficit of
approximately $6,675,000 at May 31, 2001, an increase in our working
capital deficit of approximately $880,000. The increase in the working
capital deficit reflects the increase in our accumulated deficit of
approximately $1,345,000 during the six months ended November 30, 2001.
Specifically, the working capital deficit increase is identified in the
following: an increase of $122,000 in Accounts Payable, and an increase of
$652,000 in Accrued Payroll and Other Liabilities.
As part of the above, we have accrued unpaid payrolls for our staff.
At November 30, 2001, we owed approximately $1,744,000 to our staff,
representing unpaid salaries and vacations, employee business expenses, and
some amounts owing to certain former employees.
Also as part of the above, we have accrued an aggregate total of
approximately $840,000 due to the Federal and Arizona taxing authorities.
We have commenced negotiations with both of these authorities with regard
to the amounts outstanding.
IMPACT OF INFLATION
Increases in the inflation rate are not expected to affect the
Company's operating expenses. Although the Company does not believe that
it will be able to borrow additional funds, if it were to do so at variable
interest rates, any increase in interest rates would increase the Company's
borrowed funds.
SEASONALITY
Our operations are not affected by seasonal fluctuations, although our
cash flows may at times be affected by fluctuations in the timing of cash
receipts.
11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We have been involved in litigation with a former officer and director
relating to his claims for indemnification and reimbursement of legal
expenses in connection with the Defamation Litigation, and for breach of an
employment agreement with respect to stock options. The former executive
was seeking damages, including substantial exemplary and punitive damages,
and an order requiring us to honor stock options. We believe that the
claims for exemplary and punitive damages relating to both the indemnity
and stock option claims were wholly without merit, however the cost of
litigating the claim would have far exceeded the cost to settle. Therefore,
in March 2001, we reached a settlement with the former executive. The terms
of the settlement are confidential. On October 16, 2001, we issued 478,571
restricted shares of our common stock to the former officer. At the
current time, we have not executed fully our obligations under the
settlement agreement. Failure to do so in a timely manner may lead to a
breach of the agreement and the potential for damages.
We have been involved in litigation with a former customer who has
alleged that we breached an agreement to provide software conversion
services and to test its software for the ability to function in the year
2000 and beyond. While we believe that the outcome of any litigation would
have been favorable, our analysis indicated the potential cost of trying
the case would have been greater than the settlement offer on the table. We
settled the case during December 2000 for $125,000 to be paid over the next
fifteen months. We have been unable to meet our payment commitments since
the settlement date, although we have conveyed to the former customer our
willingness to meet the settlement terms as soon as sufficient financing is
available. To date, the former customer has taken no further action.
On May 31, 2001, a complaint was filed against us in the Superior
Court of the State of Arizona in Maricopa County (Case No. CV 2001-001579)
by Steve Fischer ("Fischer"). In the complaint, Fischer alleged that he
had been induced to settle an existing judgment with a third party, Scott
Miller ("Miller") for a consideration of 3,600,000 shares of our common
stock, to be registered by us no later than February 15, 2001. Miller, as
the principal of Beacon Capital Partners LLP, had been issued 4,450,000
shares of our common stock as part of an arrangement with the Company
intended to generate up to $1,000,000 of financing for the Company, based
on the sale of up to 11,111,111 shares. We have since responded with a
counter-suit claiming the recovery of the issued shares for non-
performance. We have been awarded a Default Judgment against Miller,
including a specification for the return of 850,000 shares. We expect the
case against Fischer will go to litigation before the end of 2001. We have
received advice of counsel that we have an extremely high likelihood that
the full number of 4,450,000 shares will be recovered fully by us.
On August 15, 2001, a complaint was filed against us the Superior Court
of the State of Arizona in Maricopa County (Case No. CV 2001-014095) by
Richard Highland ("Highland"). The complaint alleges that Highland, a
former employee, has wages unpaid by us for a period when he contends he
was a continuing employee. The complaint seeks payment of the alleged
wages, interest and costs, in addition to triple damages, interest and
costs for failure to pay wages, as provided for in the Arizona Revised
Statutes. An Application for entry of default was filed by Highland on
September 7, 2001, and a Default Judgment has been granted against us. The
aggregate amount involved is estimated by the Company to be approximately
$35,000.
12
On November 5, 2001, a complaint was filed against us in the Superior
Court of the State of Arizona in Maricopa County (Case No. CV 2001-019245)
by David R. Kennedy ("Kennedy"). The complaint alleges Breach of Contract,
bad faith, and misrepresentation in that Kennedy, a former employee, has
severance pay and accrued vacation pay unpaid despite the specific
provisions of a Separation and Release Agreement dated June 20, 2001, and
despite a demand for payment dated September 19, 2001. The complaint also
alleges that certain monies deducted from Kennedy's salary payments for
inclusion in a 401K account have not been paid to the insurance company by
the Company, and have not been repaid to Kennedy as per his demand of
September 19, 2001. The complaint seeks payment of the alleged wages,
interest and costs, in addition to triple damages, interest and costs for
failure to pay wages, as provided for in the Arizona Revised Statutes, and
the amounts alleged to have been deducted for Kennedy's 401K Account but
not paid to the insurance company, plus triple damages and interest. The
aggregate amount involved is estimated by the Company to be approximately
$25,000. A motion for summary judgment has been granted, and we expect the
motion to be considered within the next month.
On January 8, 2002, an application for entry of default was filed
against us in the Superior Court of the State of Arizona in Maricopa County
(Case No. CV 2001-021430) by Jason Genet ("Genet"). This application seeks
a judgment for affirmative relief, based on an allegation that we had
failed to respond to an earlier complaint. At February 19, 2002, we have
not yet received the complaint, and are unaware of the allegations
contained therein.
On January 14, 2002, a complaint was filed against us in the Superior
Court of the State of Arizona in Maricopa County (Case No. CV 2002-000745)
by Peter Sellito ("Sellito"). The complaint alleges Breach of Contract in
that Sellito, a former employee, has wages unpaid by us for a period when
he was an employee. The complaint seeks payment of the alleged wages to an
aggregate total of $11,244.42, interest and costs, in addition to triple
damages, interest and costs for failure to pay wages, as provided for in
the Arizona Revised Statutes. At February 19, 2002, we had not acted to
respond to this complaint. The aggregate amount involved is estimated by
the Company to be approximately $55,000.
On February 18, 2002, a civil complaint was filed against us in the
South Mesa Justice Court of the State of Arizona in Maricopa County (Case
No. CV 02-000675RA) by Coleman, Lee & Associates on behalf of their client,
AlphaGraphics, Inc. The complaint alleges that we issued certain checks in
payment of an outstanding debt, and that such checks were returned to the
payee because of insufficient funds. The complaint seeks payment of the
alleged debt to the amount of $9,125.00, in addition to interest and costs.
At February 19, 2002, we had not acted to respond to this complaint.
ITEM 2. CHANGES IN SECURITIES
During the year ended May 31, 2001, we issued 4,450,000 shares of our
common stock to an organization that was to conduct an offering of our
common stock. The offering never occurred and we have filed a lawsuit to
recover the shares. It is the opinion of the Company and its legal counsel
that we will recover these shares. The 4,450,000 shares are not included
in the total issued and outstanding shares at November 30, 2001. These
shares are also excluded from the computation of the weighted average
shares outstanding for the three months and six months ended November 30,
2001.
13
In September 2001, we requested certain investors to surrender certain
issued or entitled shares, unexercised stock options, and unexercised
warrants to the Company to enable us to use the underlying shares, if
required, for issue under a future private placement. The aggregate shares
involved in these agreements were 7,983,975, comprised of 7,133,475 shares,
110,500 options, and 740,000 warrants. As consideration for the surrender
of issued and entitled shares, we agreed to issue an aggregate of 7,356,334
replacement shares or, for two of the investors, to pay compensation at the
rate of $0.10 per surrendered share. As consideration for the surrender of
options and warrants, we agreed to grant the same number of replacement
options and warrants at a reduced exercise price. In all cases, the
subject replacement shares, options and warrants will only be available or
exercisable when the Company has increased its authorized capital to
125,000,000 shares.
In addition to the surrendered warrants referenced above, we also have
3,758,000 warrants outstanding for the purchase of our common stock under
our January 2000 private offering, at an exercise price of $1.50 per share.
These warrants will expire after 30 months from the date of issue; issue
dates range from January 2000 to March 2000.
On October 16 and November 16, 2001, we issued an aggregate total of
750,000 shares of our common stock in payment of our obligation arising
from the settlement of a lawsuit between us and Mr. Tom Dreaper, a former
President.
Also on November 16, 2001, we issued an aggregate total of 3,227,081
shares of our common stock to a total of sixteen investors in our May 2001
private placement.
On November 8 and 15, 2001, an aggregate total of 455,141 shares were
returned to us by two investors. On November 29, 2001, an aggregate total
of 5,054,135 shares were returned to us. This total included 4,000,000
shares issued on June 1, 2001 to a consultant and former Chairman for
purposes of negotiating financing as part of a private placement. Another
504,135 shares were returned by the same consultant, and 550,000 shares
were returned by another investor. All of these returns were intended to
reduce our total number of issued and outstanding shares to facilitate the
filing of a Form S-8 registration statement, which was completed on
November 30, 2001. As consideration for the return of 417,141 shares from
one investor on November 15, 2001, we agreed to issue 500,000 replacement
shares when the Company's authorized stock has been increased to
125,000,000 shares. As consideration for the return of the 504,135 shares
from the consultant and former Chairman, we agreed to issue a total of
554,550 replacement shares when the Company's authorized stock has been
increased to 125,000,000 shares.
On November 30, 2001, we filed a Form S-8 registration statement for a
total of 3,800,000 shares. On the same day, we issued a non-qualified
stock option agreement to Mr. Howard R. Baer, a consultant and former
Chairman, for 3,250,000,000 immediately-exercisable shares for certain
services rendered to the Company. In addition, we issued a non-qualified
stock option agreement for 550,000 immediately-exercisable shares to an
investor and consultant for certain services rendered to the Company,
including his return of 550,000 shares to the Company on November 29, 2001.
On November 30, 2001, Mr. Baer exercised his option in a cashless
transaction. On December 10, 2001, we issued a total of 3,033,333 shares
to Mr. Baer, and 216,667 shares were returned to the Company in
consideration for the exercised option. In December 2001, the investor and
consultant exercised his option for 550,000 in a cashless transaction,
which has not yet been completed. Under this transaction, he is to receive
513,333 shares of common stock, and is to return 36,667 shares to the
Company in consideration for the exercised option.
An Exhibit has been provided to this Form 10-QSB which summarizes all
of the shares, options, and warrants surrendered by our respective
investors, officers, employees, and directors, with the number of
replacement shares, options, and warrants which we are obligated to return
to them.
14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
We have been unable to meet payments due to Corporate Fiducial
Services, Inc. ("CFS") for prior loans and amounts outstanding relative to
our corporate office building, with an aggregate total of $265,000. This
failure has precipitated threat of action against us by Creative Financial
Funding, L.L.C., which is a related company of CFS, and which holds a
registered lien dated September 20, 2001 on all furniture, equipment,
inventory and fixtures owned by us. As part of our agreement with Beckwith
Management, L.L.C. (see "Other Information", below), we have eliminated the
total liability to CFS.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the three months ended November 30, 2001.
ITEM 5. OTHER INFORMATION.
On September 12, 2001, we accepted the resignation of Mr. A. Lewis
Burridge as President, Chief Executive Officer, and Chairman of the Board.
At the same time, we appointed Mr. Howard R. Baer as Chairman; Mr. Burridge
remained as a Director and was appointed as Vice-Chairman. Other
resignations from the Board since January 2001 include: Mr. Luther H.
Hodges (January, 2001), Mr. Andrew Lee (September, 2001), Mr. Russell B.
Stevenson (February, 2001), and Mr. Robert L. Stewart (June, 2001). In
March 2001, Mr. Ben H. Gregg and Mr. Joseph A. Grimes were appointed to the
Board, and in September 2001, Mr. Anthony R. Perre and Mr. Robert D. Reisch
were appointed to the Board. Following their resignations on October 19,
2001, Messrs. Reisch and Perre were removed from the Board and the
Executive Committee.
At November 30, 2001, Messrs. Burridge and Gregg comprised the Board's
Executive Committee, and Messrs. Caldwell and Knode comprised both the
Audit Committee and the Compensation Committee. As of February 15, 2002,
all of the above directors have resigned.
In September 2001, we appointed Mr. Anthony Perre as President and Mr.
Robert D. Reisch as CEO. On October 19, 2001, the Board accepted the
resignations of Mr. Perre and Mr. Reisch from the positions of President
and Chief Executive Officer, respectively, and from their positions as
Directors and members of the Executive Committee. On October 24, 2001, Mr.
Bruce Shirey was appointed as President and Chief Executive Officer. Mr.
Shirey immediately commenced a review of the Company's business directions,
specific technology capabilities, and product readiness and directions.
Based on this review, it was determined that the Company required very
substantial financing and effort to complete the development of the BIZPAY
product, and also to initiate new products based on leading-edge
technologies and business opportunities. Failing the ability to raise this
financing or to sell some of the Company's assets, the Company was facing
the prospect of bankruptcy.
It was also recognized that the Company had become substantially
constrained in its financing activities by the limited amount of unissued
shares available from its authorized capital limit of 69,000,000 shares.
Accordingly, it was determined that the company should issue a
recommendation to a proposed annual meeting of stockholders to increase its
authorized capital to a limit of 125,000,000 shares of common stock,
although it was recognized that the very substantial decline in the market
price of Company common stock would make only a limited amount of financing
available from equity sales.
15
Effective November 30, 2001, Mr. Howard Baer resigned as Chairman of
the Board. This resignation was accepted by the Board of Directors on
December 12, 2001. On December 6, 2001, Mr. Bruce Shirey, President and
CEO, was appointed as a Director. On December 12, 2001, the Board was
advised that a proposal for the sale of the Business Products Division had
not been consummated, placing the Company in a financial position where the
filing of a petition of bankruptcy was now considered essential, even
though the Company had insufficient cash reserves at that time to prepare
of to complete such a filing. A Form 8-K and an open letter to
shareholders were issued on December 19, 2001, and a Form 8-KA and amended
shareholder letter were issued by the Company on December 21, 2001. Also
on December 12, 2001, the Board approved the resignation of Mr. Bruce
Shirey as President, CEO, and Director. The resignation of Mr. Eric
Strasser, Chief Financial Officer, was accepted as effective on December
11, 2001. Messrs. Shirey and Strasser and two other remaining employees
were offered short-term consulting contracts to assist the Board in the
steps necessary to prepare a bankruptcy filing, but with no guarantee that
they would receive payment for their services. On December 19, 2001, the
short-term consulting assignments of Messrs. Shirey and Strasser and the
other two employees were terminated with no payment for services; these
former officers continued to work without salary until December 31, 2001.
On January 7, 2002, a special Board meeting accepted the resignations
of Mr. Ben H. Gregg, Jr. (effective January 2, 2002) and Mr. Joseph A.
Grimes, Jr. (effective January 6, 2002). The Board also received a
proposal from NewBridge Capital Partners, L.L.C. for an informal re-
organization of the Company, with the intention that such re-organization
would obviate the requirement for formal bankruptcy proceedings, would
clear all outstanding Company liabilities through the sale and realization
of the Company's assets, and would allow the eventual merger of the Company
with a suitable corporate entity. The Proposal was accepted, and Mr.
Gregory A. Harrington, Managing Director of NewBridge, was appointed as our
President and Chief Executive Officer. This appointment was subject to
certain due diligence, and was made official on January 23, 2001. The
Proposal and the Company's letter of acceptance are attached as Exhibits to
this Form 10-QSB. Mr. John L. Caldwell resigned as a Director, effective
January 9, 2002.
On January 23, 2001, a special Board meeting appointed Messrs. Gregory
A. Harrington and Chad M. Harrington as directors of the Company. The
meeting also accepted the resignations of Messrs. Lewis A. Burridge and Ben
A. Gregg, Jr. Mr. Gregory A. Harrington was appointed as Acting Chairman
of the Board.
16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The list of Exhibits which are filed with this report or incorporated
by reference herein is set forth in the Exhibit Index that appears
following the
signature page, which Exhibit Index is incorporated herein by this
reference.
(b) Reports on Form 8-K.
The Company filed a Form 8-K on December 19, 2001, which reported that
the Company intended to commence preparations on December 20, 2001 to file
a voluntary petition for reorganization under Chapter 11 of the Bankruptcy
Code in the United States Bankruptcy Court in Phoenix, AZ. The Company
reported that it would continue to operate on a business-as-usual basis
while restructuring. It was also reported that a letter to Company
shareholders was posted on the Company's publicly-accessible Internet
website to inform shareholders of the circumstances surrounding the steps
leading to the petition. A copy of the letter to shareholders was attached
to the Form 8-K as an Exhibit.
The Form 8-K also reported that the Company had accepted the
resignation of its Chairman, Mr. Howard R. Baer, effective as of
November 30, 2001. A copy of the letter of resignation was attached to the
Form 8-K as an Exhibit.
The Form 8-K also reported that the Company had accepted the
resignations of its President and Chief Executive Officer, Mr. Bruce R.
Shirey, on December 12, 2001, and the resignation of its Chief Financial
Officer, Mr. Eric J. Strasser, on December 11, 2001.
On December 21, 2001, the Company filed an amendment to the Form 8-K
of December 19, 2001. This Form 8-KA reported that an amended letter to
Company shareholders was posted on December 20, 2001, on the Company's
publicly-accessible Internet website to inform shareholders of
circumstances surrounding the steps leading to the abovementioned
preparations for a bankruptcy petition. A copy of the amended letter was
attached to the Form 8-KA as an Exhibit.
17
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.
CONSYGEN, INC.
Date: February 19, 2001 By: /s/ Gregory A. Harrington
-------------------------------
Gregory A. Harrington,
President and
Chief Executive Officer,
Acting Chairman
(Principal Executive Officer)
18
EXHIBIT INDEX
2 Plan of Acquisition between the Registrant and the stockholders of
ConSyGen, Inc., an Arizona corporation, dated August 28, 1996, filed
as Exhibit 2 to the Registrant's Current Report on Form 8-K dated
September 5, 1996 and incorporated herein by reference.
3.1 Articles of Incorporation of the Registrant, as amended. (1)
3.2 Amended and Restated By-Laws of the Registrant. (4)
4.1 Specimen common stock certificate, filed as Exhibit 4.B to the
Registrant's Registration Statement on Form S-18, File No. 33-22900 -
FW, and incorporated herein by reference.
4.2 Form of Common Stock Purchase Warrant used in connection with
issuance of warrants to purchase an aggregate of 1,000,000 shares of
the Registrant's Common Stock, $.003 par value. (2)
4.3 Subscription Agreement used in connection with the Rule 506 sale of
Convertible Debentures in the aggregate principal amount of
$3,500,000 (including form of Convertible Debenture, form of Warrant,
and form of Registration Rights Agreement, attached as Exhibits A, B
and D, respectively, to the Subscription Agreement). (5)
4.4 Form of Common Stock Purchase Warrant to purchase an aggregate of
10,000 shares issued in partial payment of finders' fees in
connection with sale of Convertible Debentures in aggregate principal
amount of $3,500,000. (5)
4.5 Form of Subscription Agreement used in connection with Rule 506 sale
of 120,000 shares for gross proceeds of $1,080,000. (1)
4.6 Form of Subscription Agreement used in connection with Rule 506 sale
of 152,000 shares for gross proceeds of $882,500. (1)
4.7 Form of Common Stock Purchase Warrant to purchase 200,000 shares
issued to consultant, Howard R, Baer, on August 1, 1997. (1)
4.8 Form of Common Stock Purchase Warrant to purchase 100,000 shares
issued to Howard R, Baer's designee, Kevin C. Baer, on August 1,
1997. (1)
4.9 Subscription Agreement used in connection with Rule 506 sale of
900,000 shares for gross proceeds of $5,276,250. (3)
4.10 Form of Subscription Agreement used in connection with issuance of
30,747 shares in payment of indebtedness in the aggregate amount of
$250,575. (3)
4.11 Common Stock Purchase Warrant to purchase 100,000 shares issued to a
consultant's designee, Irvington International Limited, as of
November 10, 1997. (3)
4.12 Agreement dated as of July 17, 1998 between the Registrant and Tom S.
Dreaper relating to employment and grant of options to purchase
1,000,000 shares of common stock of the Registrant. (5)
4.13 Agreement entitled "Transfer of Complete Rights in Software Program
between ConSyGen, Inc. and FAM Investments, LLC", filed as Exhibit
4.13 to the Registrant's Current Report on Form 8-K dated July 2,
1999 and incorporated herein by reference.
4.14 Amendment dated August 13, 1998, to 6% Convertible Debenture
Subscription Agreement and related Registration Rights Agreement
dated May 29, 1998, filed as Exhibit 4.13 to the Registrant's
Registration Statement on Form S-3, File No. 333-61869, and
incorporated herein by reference.
19
4.15 Form of Subscription Agreement used in connection with private
placement of 4,498,000 units, each consisting of one share of the
Registrant's common stock and a warrant to purchase one share of
common stock, for total cash consideration of $1,124,500. (6)
4.16 Form of Common Stock Purchase Warrant used in connection with
issuance of warrants to purchase an aggregate of 4,498,000 shares of
Registrant's common stock, $0.003 par value. (6)
4.17 Option Agreement dated April 17, 2000, for 1,000,000 shares of the
Registrant's common stock, issued to consultant, Howard R. Baer. (6)
4.18 Agreement dated as of December 18, 2000 between the Registrant and
Beacon Capital Partners, LLP relating to the Rule 506 sale of up to
11,111,111 shares for gross proceeds of up to $1,000,000. (9)
4.19 Form of Subscription Agreement used in connection with Rule 506 sale
of 6,073,218 shares for gross proceeds of $540,142. (9)
4.20 Form of Agreement used in connection with the surrender of
unexercised stock options to the Registrant by Registrant's
employees. (9)
4.21 Form of Agreement used in connection with the surrender of issued
shares and unexercised stock options and warrants to the Registrant
by certain of the Registrant's investors. (9)
4.22 Schedule of shares, options and warrants surrendered by certain of
the Registrant's investors, officers, employees, and directors. *
10.7 Registrant's 1996 Non-Qualified Stock Option Plan. (2)
10.8 Registrant's Amended and Restated 1997 Non-Qualified Stock Option
Plan. (3)
10.10Form of Indemnification Contract between the Registrant and each
executive officer and director of the Registrant. (3)
10.12Settlement Term Sheet between the Registrant and the Debenture
Parties dated March 8, 2000, filed as Exhibit 10.12 to the
Registrant's Current Report on Form 8-K dated March 22, 2000, and
incorporated herein by reference.
10.13Settlement Agreement and Conditional Release between the Registrant
and the Debenture Parties dated April 20, 2000. (6)
10.14Agreement dated January 11, 2000, between the Registrant and Saviar
and Spaeth. (7)
10.15Registrant's 2000 Combination Stock Option Plan. (8)
10.165 Year Lease with Option to Purchase agreement between the Registrant
and Corporate Fiducial Services, Inc., dated April 1, 2001. (10)
10.17Proposal for an informal re-organization of ConSyGen. Inc., prepared
by NewBridge Capital Partners, L.L.C., presented to the Registrant's
Board on January 7, 2002. *
10.18Registrant's Letter, dated January 7, 2002, accepting Proposal from
NewBridge Capital Partners, L.L.C. for an informal re-organization of
ConSyGen. Inc. *
11 Net Loss per Share calculations. See Part I, Note 2 of this
Form 10-QSB. *
20
16 Letter dated September 24, 1998 from Wolinetz, Gottlieb & Lafazan,
PC to the Securities and Exchange Commission, filed as Exhibit 16 to
the Registrant's Current Report on Form 8-K dated September 22, 1998
and incorporated herein by reference.
24 Power of Attorney. *
27 Financial Data Schedule - not required.
- ----------
(1) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1997, and incorporated herein by reference.
(2) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1996, and incorporated herein by reference.
(3) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Registration Statement on Form S-1, File No. 333
40649, and incorporated by reference.
(4) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1998, and incorporated herein by reference.
(5) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Annual Report on Form 10K for the year ended
May 31, 1998, and incorporated herein by reference.
(6) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Annual Report on Form 10K for the year ended
May 31, 2000, and incorporated herein by reference.
(7) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended November 30, 2000, and incorporated herein by reference.
(8) Filed as an Exhibit, with the Exhibit number 99.1, to the
Registrant's Registration Statement on Form S-8, dated May 4,
2000, and incorporated herein by reference.
(9) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Annual Report on Form 10K for the year ended
May 31, 2001, and incorporated herein by reference.
(10) Filed as an Exhibit, with the same Exhibit number, to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 2001, and incorporated herein by reference.
* Filed herewith
21