They lost more $, don't have enough $ for next quarter
Cash on hand $1.8M
$ spent during quarter $1.4M
They lost $1.3M in the quarter.
They barely have enough to make it to end of March and expenses have gone even higher this quarter.
Loaning more money to Intercell, not calling in note
isn't global capital just a stock promotion company?
During the year ended June 30, 2001, the Company loaned $500,000 to an unrelated third party - Global Capital Partners, Inc. ("Global") in exchange for a 12% note receivable due in November 2001. At June 30, 2001, the note balance was $375,000, of which an additional $100,000 was received in August 2001. The note was not paid in November 2001; and therefore, in January 2002, the Company agreed to the assignment of the note, and related accrued interest, by Global, to an entity represented by a shareholder of the Company. The terms of note were changed at the date of assignment, whereby the note now bears interest at 5% per annum and is unsecured, and is due in October 2002. A $32,000 principle payment, along with accrued interest of $18,000, was made in January 2002.
5. Financing Agreement Suit:
In connection with a financing obtained in October 2000, the Company filed various actions in both the United States District Court for the District of Colorado and in the District Court in and for the City and County of Denver, Colorado against, among others, Harvest Court, Southridge Capital Investments, LLC, Daniel Pickett, Patricia Singer and Thomson Kernaghan, Ltd. for violations of federal and state securities laws, conspiracy, aiding and abetting and common law fraud among other claims. The Company is seeking various forms of relief including actual exemplary and treble damages. As a result of various procedural rulings in January 2002, the United States District Court transferred all cases pending before it to the United States District Court for the southern District of New York, New York City, New York.
On May 7, 2001, Harvest Court, LLC filed suit against the Company in the Supreme Court of the State of New York, County of New York. The suit alleges that the Company has breached the October 20, 2000 Purchase Agreement, by not issuing 7,418,895 free trading shares of the Company's common stock in connection with the reset provisions of the Purchase Agreement due on the second reset date and approximately 4,545,303 shares due in connection with the third reset date. Harvest Court is seeking the delivery of such shares or damages in the alternative. On August 1, 2001, the Supreme Court of the State of New York, County of New York issued a preliminary injunction ordering the Company to reserve and not transfer the shares allegedly due to Harvest Court.
In September 2001, a suit was filed by Thomson Kernaghan & Co., Ltd. against the Company and certain officers/directors of the Company seeking general damages for defamation and punitive, aggravated and exemplary damages that aggregate in excess of $3,000,000.
The Company intends to vigorously defend against these claims and does not believe the outcome of these claims will have a material adverse effect on the financial condition, results of operations or liquidity of the Company. However, it is too early at this time to determine the ultimate outcome of these matters.
The Company recognized revenues of $60,163 for the six months ended December 31, 2001 ($36,097 for the three months ended December 2001) compared to $79,429 for the six months ended December 31, 2000 ($64,487 for the three months ended December 31, 2000). The revenues were from work on various contracts to provide consulting services and software development assistance to third parties by the Company's German subsidiary, Nanocard Technologies, GmbH ("Nanocard").
Research and development expense was $202,348 for the six months ended December 31, 2001 compared to $87,664 for the six months ended December 31, 2000. Research and development expense also increased from $20,363 for the three months ended December 31, 2000 to $94,896 for the three months ended December 31, 2001. The increases are primarily attributable to additional salaries and expansion of research activities for the Company's technology.
General and administrative expenses increased to $2,236,010 for the six months ended December 31, 2001, from $1,319,215 for the six months ended December 31, 2000, and increased to $1,291,106 for the three months ended December 31, 2001 from $678,884 for the three months ended December 31, 2000. The increases are attributable to increases in salaries, depreciation and general expenses resulting from the increased activities and expansion of Nanocard and the Colorado Springs technology group. Further, legal expenses were significantly higher due to amortized legal fees of $500,000 for the six months ended December 31, 2001 ($250,000 for the three months ended December 31, 2001) in connection with litigation research for the Harvest Court Litigation.
The Company and Louis DiFrancesco, the inventor of the PI Technology are involved in litigation relating to the Company's ownership of its intellectual property and the rights as to who should receive royalty payments from licenses, which were outstanding as of September 3, 1996. On November 30, 1999, the Company obtained a Court Order of Declaratory Judgment that it has incontestable and exclusive ownership of all patents, patent applications, licenses, trade names, trademarks, trade secrets and other intellectual properties relating to the PI Technology. Mr. DiFrancesco filed an Appeal on March 28, 2000 with the Colorado Court of Appeals regarding the Declaratory Judgment. On December 6, 2001 the Colorado Court of Appeals rendered an opinion of Judgment Reversed and Case Remanded with Directions. The Colorado Court of Appeals found that there was not a settlement agreement and has ordered the case continue to be heard by the District Court, City and County of Denver. The Company believes that the resolution of this litigation will not have a material adverse impact on either results of operations, financial position, or cash flows.
The Company made the following unregistered sales of its securities from October 1, 2001 to December 31, 2001.
Date Title of Amount of
of Sale Securities Securities Consideration Purchaser
-------- ------------ ---------- --------------- -----------
11/14/01 Common Stock 36,000 Public relation James Stock
services
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Just say NO to stock fraud!
AI
