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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarter ended June 30, 2002 Commission File No. 0-7100
BASE TEN SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1804206
(State of incorporation) (I.R.S. Employer
Identification No.)
535 E. County Line Road, Suite 16
Lakewood, N.J. 08701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 370-6895
Indicate by 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 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.
Title of Class Outstanding at July 12, 2002
Class A Common Stock, $5.00 par value 5,338,812
Class B Common Stock, $5.00 par value 12,667
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BASE TEN SYSTEMS, INC.
AND SUBSIDIARIES
Index
Part I. Financial Information Page
Item 1. Financial Statements
Consolidated Balance Sheet - June 30, 2002 (unaudited)......................................... 1
Consolidated Statements of Operations - Three and Six Months ended June 30, 2002
and 2001 (unaudited)......................................................................... 2
Consolidated Statement of Common Stock and Other Shareholders' Equity -
Six Months ended June 30, 2002 (unaudited)................................................... 3
Consolidated Statements of Cash Flows - Six months ended June 30, 2002
and 2001 (unaudited)......................................................................... 4
Notes to Consolidated Financial Statements..................................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................................................ 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk............................ 10
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K...................................................... 10
BASE TEN SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(unaudited)
($ in thousands, except par value)
Assets
June 30,
2002
------------
Current Assets
Cash and cash equivalents....................................... $ 418
Other current assets............................................. 158
Current assets of discontinued operations........................ 75
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Total Current Assets........................................ 651
Equipment, net...................................................... 3
Investment in ConvergenceHealth.com................................. 290
Other assets........................................................ 10
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Total Assets $ 954
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Liabilities, Common Stock and Other Shareholders' Equity
Current Liabilities:
Accounts payable................................................. $ 55
Accrued expenses................................................. 147
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Total Current Liabilities................................... 202
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Commitments and Contingencies
Redeemable Convertible Preferred Stock:
Series B Preferred Stock, $1.00 par value, 994,201 shares
authorized, 0 shares issued and outstanding................... --
Common Stock and Other Shareholders' Equity (Deficit):
Class A Common Stock, $5.00 par value, 27,000,000 shares
authorized; 5,358,812 shares issued and 5,338,812 outstanding. 26,794
Class B Common Stock, $5.00 par value, 400,000 shares authorized;
issued and outstanding 12,667 shares.......................... 63
Additional paid-in capital....................................... 68,481
Accumulated deficit.............................................. (94,370)
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968
Accumulated other comprehensive gain............................. 65
Treasury Stock, 20,000 Class A Common Shares, at cost............ (281)
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Total Common Stock and Other Shareholders' Equity........... 752
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Total Liabilities, Common Stock and Other Shareholders' Equity $ 954
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See Notes to the Consolidated Financial Statements
1
BASE TEN SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
($ in thousands, except per share data)
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
--------------------------------------------------------------------------
General and administrative expenses..................... $ (112) $ (307) $ (353) $ (487)
Other income, net....................................... 1 14 11 89
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Net loss................................................ (111) (293) (342) (398)
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Basic and diluted net loss per share $ (0.02) $ (0.05) $ (0.06) $ (0.07)
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Weighted average common shares outstanding - basic
and diluted.................................... 5,351,000 5,351,000 5,351,000 5,351,000
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See Notes to the Consolidated Financial Statements
2
BASE TEN SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statement of Common Stock and Other Shareholders' Equity
(unaudited)
($ in thousands)
Total Common
Accumulated Stock and
Class A Class B Additional Other Other
Common Stock Common Stock Paid-In Accumulated Comprehensive Treasury Stock Shareholders'
Shares Amount Shares Amount Capital Deficit Loss Shares Amount Equity
- ---------------------- ---------- --------- ---------- --------- ---------- ----------- ------------- -------- --------- ----------
Balance at
December 31, 2001 5,358,812 $ 26,794 12,667 $ 63 $ 68,481 $(94,028) $ 56 (20,000) $ (281) $ 1,085
====================== ========= ======== ======== ======== ======== ======== ========= ======== ======= ========
Comprehensive
Income (Loss):
Net loss -- -- -- -- -- (342) -- -- -- (342)
Unrealized loss on
securities
available
for sale -- -- -- -- -- -- 9 -- -- 9
--------- -------- -------- -------- -------- -------- --------- -------- ------- --------
Total Comprehensive
Income (Loss) -- -- -- -- -- (342) 9 -- -- (333)
- ---------------------- --------- -------- -------- -------- -------- -------- --------- -------- ------- --------
Balance at
June 30, 2002 5,358,812 $ 26,794 12,667 $ 63 $ 68,481 $(94,370) $ 65 (20,000) $ (281) $ 752
====================== ========= ======== ======== ======== ======== ======== ========= ======== ======= ========
See Notes to the Consolidated Financial Statements
3
BASE TEN SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
($ in thousands)
Six Months Six Months
Ended Ended
June 30, 2002 June 30, 2001
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Cash Flows from Operating Activities:
Net loss............................................. $ (342) $ (398)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating
Activities:
Depreciation and amortization........................ -- 6
Loss on disposition of assets........................ -- 34
Changes in operating assets and liabilities:
Other current assets................................. 4 117
Accounts payable and accrued expenses................ (127) (487)
- -----------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities......................... (465) (728)
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Cash Flows from Investing Activities:
Investment in ConvergenceHealth.com.................. (290) --
- -----------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities......................... (290) --
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Net Decrease In Cash.......................................... (755) (728)
Cash, beginning of period..................................... 1,173 2,304
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Cash, end of period........................................... $ 418 $ 1,576
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Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest............. $ -- $ --
See Notes to the Consolidated Financial Statements
4
BASE TEN SYSTEMS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2002
(Unaudited)
A. Basis of Presentation and Liquidity
The financial statements of Base Ten Systems, Inc. and Subsidiaries (the
"Company" or "Base Ten") have been prepared on the basis that its current
operations are limited to administrative matters pending implementation of
a strategy for redirection of its business. The Company has incurred
significant operating losses and negative cash flows in recent years. In
October 2000, Base Ten sold part of its software business and announced its
decision to dispose of its remaining software operations, with a view to
pursuing alternative revenue generating or strategic opportunities. See
Note D below. The assets and liabilities associated with the Company's
software operations have been adjusted to reflect their net realizable
value upon disposition. All discontinued operations have been reflected in
the financial statements for the year 2000.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The consolidated interim
financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended December 31,
2001. The results of operations for the six months ended June 30, 2002 are
not necessarily indicative of the operating results for the full year. In
management's opinion, all adjustments necessary for a fair presentation of
the Company's financial position and operating results are reflected in the
accompanying statements.
B. Description of Business
Base Ten was founded in 1966 and became publicly held in 1968.
Historically, the Company focused on designing and producing safety
critical software products for defense and aerospace programs. In response
to declines in defense spending during the early 1990s, Base Ten sought to
apply its know how in safety critical technology to develop commercial
lines of business. The Company ultimately established separate divisions
for its government technology ("GTD") and medical technology ("MTD")
operations to address distinct challenges in those sectors. The GTD was
sold to Strategic Technology Systems, Inc. in 1997.
In October 2000, the Company sold its manufacturing execution software
business to ABB Automation, Inc. for $2.0 million and announced its
intention to dispose of its remaining businesses and pursue revenue
generating or strategic opportunities in sectors requiring less capital
resources, technological development and time to market uncertainties. In
March 2001, the Company entered into an agreement for the sale of its
clinical trials management software business ("Clinical Software") to
Almedica Advanced Technology LLC ("AAT"), a subsidiary of Almedica
International, Inc. ("Almedica"). See Note D below.
In January 2002, the Company entered into an Agreement and Plan of Merger
with ConvergenceHealth.com ("Convergence"). See Note E below.
C. Summary of Significant Accounting Policies
Risks and Uncertainties - The Company's planned redirection of its business
will be subject to all of the risks inherent in a technology business,
including the potential for significant technological changes in the
industry or in customer requirements, ability to attract and retain
qualified employees, limited senior management resources, protection of
intellectual property rights and potentially long sales and implementation
cycles.
The Company is involved from time to time in various claims in the normal
course of business. During June 2002, a former customer of the Company
requested the refund of approximately $87,000 of software license fees and
other unspecified costs relating to a 1999 contract. Performance of the
contract had been subcontracted to ABB Automation, Inc. in October 2000
in connection with its purchase of the Company's manufacturing execution
software. Management believes this claim is without merit and intends to
defend the claim vigorously. The Company has elected not to reserve for
this claim. In the event the customer pursues this claim through litigation
and obtains an adverse judgement against Base Ten, the Company's financial
condition could be adversely affected.
5
Reliance on Estimates - The preparation of financial statements in
accordance with generally accepted accounting standards requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Significant estimates include
the value of its investments in AAT and Convergence, reserves for claims by
customers and vendors for contractual or other unfulfilled commitments,
deferred tax asset valuation reserves and the value of assets and
liabilities to be disposed of, all of which could differ from actual
values.
D. Disposition of Clinical Software Business
The Company's agreement with Almedica and AAT provides for its contribution
of the Clinical Software assets to AAT for $75,000 and a 20% ownership
interest in AAT. See Note B above. The Clinical Software assets are
reflected in the accompanying financial statements at their estimated net
realizable value of $75,000, with no value attributed to the interest in
AAT to be received by Base Ten in the transaction. The sale of the Clinical
Software assets is subject to approval by the Company's shareholders.
E. Investment in ConvergenceHealth.com
The Company is a party to an Agreement and Plan of Merger dated January 18,
2002, as amended (the "Merger Agreement"), with Convergence for the merger
of Convergence into a wholly owned subsidiary of Base Ten (the "Merger").
See Note B above. Convergence is a development stage company seeking to
commercialize its Personal Health Application, an interactive web-based
resource designed to assist people make healthy lifestyle decisions
informed by exposure to alternative and preventative as well as traditional
healthcare options. To provide Convergence with needed working capital
prior to the Merger, the Company has purchased an aggregate of 1,160,000
shares of Convergence preferred stock for $290,000 since January 2002. Base
Ten's investment in Convergence at June 30, 2002 is recorded at its face
value of $290,000. In the event the merger with Convergence is not
completed or Convergence otherwise fails to execute its business plan, Base
Ten could be unable to recoup its investment in Convergence.
Subsequent to June 30, 2002, the Company and Convergence amended the Merger
Agreement to provide for unsecured working capital loans to Convergence
pending completion of the merger. The Company made an initial $125,000 loan
on August 1, 2002 and agreed to make additional loans of $50,000 each month
from October 2002 until the earlier of January 2003 or completion of the
merger. The amendment also restricts the rights of Convergence to terminate
the Merger Agreement under certain circumstances without first repaying the
Company's loans and repurchasing all or part of its preferred stock
investment in Convergence.
Consummation of the Merger is subject to various conditions, including
approval by both parties' shareholders, delivery by Convergence of its
Personal Health Application to at least one unaffiliated sponsor at fair
value and completion of a 1-for-1,000 reverse split of the Company's common
stock and a related fractional share repurchase (the "Share Combination").
The Share Combination is intended to save administrative costs after the
Merger by reducing the Company's shareholder base below 300, enabling it to
terminate its reporting obligations as a publicly held small business
company.
If the Merger is approved by the parties' shareholders and the other
closing conditions are satisfied, the Company's subsidiary will merge into
Convergence, which will survive the Merger as a wholly owned subsidiary of
the Company. At the time of the Merger, the outstanding capital stock of
Convergence will be converted into the right to receive Class A common
stock of the Company representing 75% of its common shares to be
outstanding after its repurchase of fractional shares in the Share
Combination.
6
F. Net Income (Loss) Per Share
The Company calculates earnings per share in accordance with the provisions
of Statement of Financial Accounting Standard No. 128, Earnings Per Share
("FAS 128"). FAS 128 requires the Company to present Basic Earnings Per
Share, which excludes dilution, and Diluted Earnings Per Share, which
includes potential dilution. The following table sets forth a
reconciliation of the numerators and denominators used to calculate income
(loss) per share in the Consolidated Statements of Operations.
($ in thousands, except per share data)
====================================================================================================================
Three Months Ended Six Months Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
====================================================================================================================
Loss per common share-basic and diluted:
Net loss from operations (numerator) $ (111) $ (293) $ (342) $ (398)
- --------------------------------------------------------------------------------------------------------------------
Weighted average shares - basic and diluted
(denominator) 5,351,000 5,351,000 5,351,000 5,351,000
- --------------------------------------------------------------------------------------------------------------------
Net loss per common share-basic and
diluted $ (0.02) $ (0.05) $ (0.06) $ (0.07)
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Stock options, warrants and rights would have an anti-dilutive effect on
earnings per share for the three and six month periods ended June 30, 2002
and 2001 and, therefore, were not included in the calculation of diluted
earnings per share.
G. Income Taxes
The Company has net operating loss carryforwards for federal income tax
purposes of approximately $78 million, expiring in the years 2005 through
2020. A 100% valuation allowance has been provided against this deferred
tax asset. There is no provision for deferred or current income taxes for
the six months ended June 30, 2002 and 2001.
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Base Ten was engaged for its first quarter century in development and
manufacturing of safety critical software components for defense and aerospace
markets. In response to declines in defense spending during the early 1990s, the
Company sought ways to apply its safety critical know how to commercial
applications for healthcare and other regulated industries. The Company
ultimately established divisions for its government technology ("GTD") and
medical technology ("MTD") operations in response to distinct challenges in
those sectors. MTD operations were initially focused on development of
pharmaceutical manufacturing execution systems ("MES") designed to address
increasing cost containment and compliance pressures in that sector. Base Ten
later identified the clinical trials market as an additional opportunity to
apply its core technology, ultimately developing clinical trials management
software ("Clinical Software") designed to support supplies management and
compliance with traceability requirements.
Contraction of Business
GTD Sale. In 1997, the Company opted to concentrate on its MTD products
both though internal development and acquisitions. As part of that strategy,
Base Ten completed the sale of its GTD assets and a related management
restructuring at the end of 1997.
MES Sale. After the sale of the GTD assets, substantial resources were
marshaled to refine, expand and deploy the Company's MTD offerings. These
efforts were hindered by unanticipated difficulties integrating its MES software
with the wide variety of legacy computer systems deployed in pharmaceutical
manufacturing facilities. The Company's inability to overcome these obstacles by
standardizing its MES products and providing migration paths resulted in project
termination by a major customer during the first quarter of 2000. Although Base
Ten reallocated resources to other projects requiring less substantial
customization, it continued to encounter problems in MES integration with
customer legacy systems. As a result, Base Ten sold its MES assets for $2
million in October 2000. As part of the transaction, the purchaser agreed to
employ members of the MES staff and assume the Company's unsatisfied commitments
under MES related license agreements. In June 2002, a former MES customer
advised Based Ten of a non-performance claim under its license agreement.
Despite its perceived lack of merit, the claim could adversely affect the
Company if successfully pursued by the customer.
Pending Clinical Software Sale. Base Ten also encountered various
technological and marketing difficulties in the introduction of its Clinical
Software offerings, including two software suites acquired from Almedica
International, Inc. ("Almedica") in June 1999. Neither the internally developed
nor acquired offerings generated adequate sales to cover associated development
and marketing expenses, contributing to the Company's operating losses
aggregating $48.5 million from 1998 through 2000. The Company determined that
the Clinical Software business, if retained, would continue to operate at a loss
and ceased efforts to build the Clinical Software business in December 2000. In
March 2001, Base Ten entered into an agreement with Almedica and Almedica
Advanced Technology, LLC ("Almedica LLC") for the sale and deployment of the
Clinical Software business. The agreement provides for the Company's
contribution of its Clinical Software assets to Almedica LLC for $75,000 plus a
20% interest in Almedica LLC. The sale of the Clinical Software assets is
subject to various conditions, including approval by the Company's shareholders.
Redirection of Business
Beginning in November 2000, the Company concentrated on identifying
revenue generating or strategic opportunities requiring less capital resources,
technological development and time to market uncertainties than its MTD business
(the "Business Redirection"). We focused these efforts for most of 2001 on
exploring a business combination with ConvergenceHealth.com, a privately held
Nevada corporation that has developed interactive web-based resources designed
to assist people make healthy lifestyle decisions informed by exposure to
alternative and preventative as well as traditional healthcare options
("Convergence"). Although Convergence has generated only marginal revenues and
has incurred substantial losses to date, its initial offering promises to
address major priorities of corporate sponsors by encouraging employees
participating in their health plans to adopt wellness lifestyles that can
increase productivity and reduce healthcare costs. Based on that prospect, the
Company entered into a merger agreement with Convergence in January 2002 and
plans to seek shareholder approval for the merger (the "Convergence Merger") and
related initiatives after completing regulatory review procedures for clearance
of solicitation materials.
8
To reduce administrative costs following the Convergence Merger, the
agreement covering the transaction provides for Base Ten to terminate its
reporting obligations as a publicly held small business company by completing a
1-for-1,000 reverse split of its common stock and repurchasing fractional shares
for cash at their market price immediately prior to the Convergence Merger (the
"Share Combination"). If the Convergence Merger is approved by the parties'
shareholders and other closing conditions are satisfied, a subsidiary of Base
Ten will merge into Convergence, which will survive the transaction as a wholly
owned subsidiary of the Company. At the time of the Convergence Merger, the
outstanding capital stock of Convergence will be converted into the right to
receive newly issued shares of the Company's Class A common stock that will
represent 75% of the common shares to be outstanding after the repurchase of
fractional shares in the Share Combination.
To provide Convergence with working capital pending completion of the
Convergence Merger, Base Ten has purchased a total of 1,160,000 shares of
Convergence preferred stock for $290,000 since January 2002. Base Ten's
investment in Convergence at June 30, 2002 is recorded at its face value of
$290,000. In the event the merger with Convergence is not completed or
Convergence otherwise fails to execute its business plan, Base Ten could be
unable to recoup its investment in Convergence.Part of the investment is subject
to put and call obligations if the Convergence Merger is not completed for
specified reasons. Subsequent to June 30, 2002, the Company and Convergence
amended the Merger Agreement to provide for unsecured working capital loans to
Convergence pending completion of the merger. The Company made an initial
$125,000 loan on August 1, 2002 and agreed to make additional loans of $50,000
each month from October 2002 until the earlier of January 2003 or completion of
the merger. The amendment also restricts the rights of Convergence to terminate
the Merger Agreement under certain circumstances without first repaying the
Company's loans and repurchasing all or part of its preferred stock investment
in Convergence. If the Convergence Merger is completed, the Company's operations
will be conducted solely through Convergence. The business plan for Convergence
contemplates substantial capital expenditures to fund its ongoing operations
without any assurance of deriving revenues from operations. The Company
anticipates that the costs for Convergence to refine, market and deploy its
services will contribute to recurring losses at the rate of approximately
$50,000 per month following the Convergence Merger. Achieving profitable
operations could be adversely affected by delays or inefficiencies in the
development cycle, inadequate marketing resources, lack of sponsor or consumer
acceptance of its products, competition and changing technology.
Results of Continuing Operations
Three Months Ended June 30, 2002 and 2001. The Company incurred losses
from continuing operations aggregating $111,000 in the second quarter of 2002
and $293,000 in the corresponding quarter of 2001. The losses were primarily
from general and administrative expenses allocable to continuing operations,
which decreased to $112,000 in the second quarter of 2002 from $307,000 in the
same quarter last year. The decrease resulted primarily from a $132,000 decrease
in outside professional fees and a reduction of $52,000 in personnel and related
costs in the second quarter of 2002 compared to the same quarter last year. The
impact of these cost reductions was partially offset by a decline in other
income to $1,000 in the second quarter of 2002 from $14,000 in the prior period,
primarily from lower interest income on investments.
Six Months Ended June 30, 2002 and 2001. The Company incurred losses
from continuing operations aggregating $342,000 in the first six months of 2002
and $398,000 in the corresponding period in 2001. The losses were primarily from
general and administrative expenses allocable to continuing operations, which
decreased to $353,000 in the first six months of 2002 from $487,000 in the same
period last year. The decrease in overhead resulted primarily from reductions of
$67,000 in personnel and related costs, $17,000 in office costs and $14,000 in
travel costs for the first six months of 2002 from interim 2001 levels, which
included non-recurring charges of $35,000 from a writedown of fixed assets.
Results of continuing operations also reflect a decline in other income to
$1,000 in the first six months of 2002 from $14,000 in the prior period,
primarily from lower interest income on investments.
Results of Discontinued Operations
The Company ceased all revenue generating operations at the end of
2000. Accordingly, it recognized no gain or loss from discontinued operations
for the three and six month periods ended June 30, 2002 and 2001.
9
Liquidity and Capital Resources
General. Base Ten has incurred significant operating losses and
negative cash flows in recent years. In view of its determination to dispose of
the Clinical Software business and pursue revenue generating or strategic
opportunities, the Company's consolidated financial statements included in this
Report account for the assets and liabilities associated with its software
operations based on their net realizable value upon disposition. The expected
value for the Company's Clinical Software business reflects the terms of its
agreement with Almedica LLC. There can be no assurance that, in the event of
liquidation, the Company would realize the recorded value for all of its assets.
Liquidity. The Company's working capital decreased from $1,072,000 at
December 31, 2001 to $449,000 at June 30, 2002. Cash and cash equivalents
decreased from $1,173,000 at December 31, 2001 to $418,000 at June 30, 2002. The
decrease reflects the Company's net loss for the six months ended June 30, 2002
and its investment of $290,000 in Convergence. See "Business Redirection" above.
Capital Resources. In May 2000, the Nasdaq inquired about the Company's
ability to meet the Nasdaq SmallCap Market continuing listing requirements of
$2.0 million in net tangible assets, $35.0 million in market capitalization and
$0.5 million of net income. To facilitate the Nasdaq's review, Base Ten
submitted its plan for achieving and sustaining compliance. Although the Company
satisfied the tangible net asset requirement, its Class A common stock was
delisted from the Nasdaq SmallCap Market in December 2000 for failure to meet
its $1.00 minimum bid requirement. In addition to reduced liquidity in the
outstanding common stock and related risks to the Company's shareholders, this
has impaired its ability to implement a Business Redirection through equity
transactions requiring an established trading market for the shares issuable in
the transaction.
Forward Looking Statements
This Report includes forward looking statements within the meaning of
Section 21E of the Securities Exchange Act relating to the Company's prospects,
plans and objectives. Those statements are generally prefaced by words like
"believe," "plan," "expect" or "anticipate." All forward looking statements
involve various degrees of risk and uncertainty. Factors that may cause actual
and anticipated results to differ materially include the risks that (1) the
Company's planned redirection of its business may fail to reverse its history of
losses; (2) general economic or business conditions may be less favorable than
expected; (3) conditions in the financial markets may prevent the Company from
raising the capital needed to execute its business plan for contract
manufacturing operations; and (4) other factors mentioned elsewhere in this
Report may adversely affect the Company's financial performance and the market
value of its common stock.
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
10
Part II. Other Information
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit
Number: Exhibit
------- -------
10.1 Amendment Number 3 to the Amended and Restated Agreement and
Plan of Merger among Base Ten Systems, Inc., Newco B10,
Inc. and ConvergenceHealth.com
99.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted under Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted under Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
1. The Company filed a Current Report on Form 8-K on June 20, 2002,
announcing Amendment No. 2 to the Amended and Restated Agreement
and Plan of Merger with ConvergenceHealth.com, NewCo B10 Inc. and
Base Ten Systems, Inc.
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: August 13, 2002
Base Ten Systems, Inc.
By: Edward J. Klinsport
------------------------------------------
Edward J. Klinsport
President and Chief Executive Officer
(Principal Executive Officer)
By: Kenneth W. Riley
------------------------------------------
Kenneth W. Riley
Chief Financial Officer
(Principal Financial Officer)
11