10QSB: Optional form for quarterly and transition reports of small business issuers
Published on November 20, 2002
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-QSB
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934.
For the quarterly period ended September 30, 2002.
( ) Transition report pursuant to Section 13 or 15(d) of the Exchange Act for
the transition period from _____ ____________ to ____________ .
Commission File Number: 333-72097
NeoGenomics, Inc.
(F/K/A American Communications Enterprises, Inc.)
(Exact name of registrant as specified in charter)
Nevada 74-2897368
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1085 Business Lane Suite 8, Naples, FL 34110
(Address of principal executive offices)
(941) 923-1949
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES (X) NO ( )
State the number of shares outstanding of each of the issuer's classes of common
equity, as of September 30, 2002.
440,677,012
Transitional Small Business Disclosure Format:
YES ( ) NO (X)
1
NeoGenomics, Inc.
(A Development Stage Enterprise)
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheet as of September 30, 2002................... 4
Consolidated Statements of Operations for the three
and nine months ended September 30, 2002, the period
June 1, 2001 (date of incorporation) to September 30,
2001, the three months ended September 30, 2001 and the
period June 1, 2001 (date of incorporation) to September
30, 2002.............................................................. 5
Consolidated Statements of Cash Flows for the nine months
ended September 30, 2002, the period June 1, 2001 (date of
incorporation) to September 30, 2001 and the period June 1,
2001 (date of incorporation) to September 30, 2002.................... 6
Notes to Consolidated Financial Statements............................ 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 2. (including cautionary statement)...................................... 9
Item 3. Controls and Procedures 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................... 13
Item 2. Changes in Securities................................................ 13
Item 3. Defaults Upon Senior Securities...................................... 13
Item 4. Submission of Matters to a Vote of Securities Holders................ 13
Item 5. Other Information.................................................... 13
Item 6. Exhibits and Reports on Form 8-K..................................... 13
Signatures 13
2
PART I
FORWARD-LOOKING STATEMENTS
Certain statements contained in this filing are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, such as statements relating to financial results and plans for future
business development activities, and are thus prospective. These statements
appear in a number of places in this Form 10-QSB and include all statements that
are not statements of historical fact regarding intent, belief or our current
expectations, with respect to, among other things: (i) our financing plans; (ii)
trends affecting our financial condition or results of operations; (iii) our
growth strategy and operating strategy; and (iv) the declaration and payment of
dividends. The words "may," "would," "could," "will," "expect," "estimate,"
"anticipate," "believe," "intend," "plan," and similar expressions and
variations thereof are intended to identify forward-looking statements.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, many of
which are beyond our ability to control. Actual results may differ materially
from those projected in the forward-looking statements as a result of various
factors. Among the key risks, assumptions and factors that may affect operating
results, performance and financial condition are changes in technology,
fluctuations in our quarterly results, ability to continue and manage our
growth, liquidity and other capital resources issues, competition and the other
factors discussed in detail in our filings with the Securities and Exchange
Commission.
3
NeoGenomics, Inc.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEET AS OF
SEPTEMBER 30, 2002
(unaudited)
________________________________________________________________________________
ASSETS
CURRENT ASSETS:
Cash $ 23,563
Accounts receivable (net of allowance
for doubtful accounts of $710) 30,883
Inventory 16,347
Due from shareholder 3,750
Deposits 3,916
Total current assets 78,459
PROPERTY AND EQUIPMENT (net of accumulated
depreciation of $31,577) 389,990
TOTAL $ 468,449
=============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 209,805
Accrued expenses 23,559
Accrued payroll 19,133
Due to affiliates 121,594
Total current liabilities 374,091
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value, 500,000,000
shares authorized; 440,677,012 shares
issued and outstanding 440,678
Additional paid-in capital 12,100,086
Deferred stock compensation (2,315,154)
Deficit accumulated during the development stage (10,131,252)
Total stockholders' deficit (94,358)
TOTAL $ 468,449
=============
________________________________________________________________________________
See notes to consolidated financial statements.
4
NeoGenomics, Inc.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
______________________________________________________________________________________________________________
For the
For the Period Period
For the June 1, 2001 For the For the June 1, 2001
Nine-Months (date of Three-Months Three-Months (date of
Ended incorporation) Ended Ended incorporation)
September to September September September to September
30, 2002 30, 2001 30, 2002 30, 2001 30, 2002
REVENUE $ 36,353 $ 1,000 $ 27,869 $ 1,000 $ 37,353
COST OF REVENUE 136,762 - 61,033 - 136,761
GROSS (DEFICIT) PROFIT (100,409) 1,000 (33,164) 1,000 (99,408)
OPERATING EXPENSES:
Stock based compensation 1,535,748 7,155,000 491,916 - 9,466,349
General and administrative 378,332 196 190,949 196 530,095
Research and development 34,190 - 15,258 - 34,190
Interest expense 4,608 - 911 - 4,609
Total operating expenses 1,952,878 7,155,196 699,034 196 10,035,243
NET INCOME (LOSS) $ (2,053,287) $(7,154,196) $ (732,198) $ 804 $ (10,134,651)
============= ============ =========== ========== ==============
NET INCOME (LOSS) PER SHARE-
Basic and Diluted $ (0.005) $ (0.03) $ (0.002) $ 0.00
============= ============ =========== ==========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING -
Basic and Diluted 413,806,400 238,500,000 428,784,100 238,500,000
============= ============ =========== ===========
______________________________________________________________________________________________________________
See notes to consolidated financial statements.
5
NeoGenomics, Inc.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
__________________________________________________________________________________________________________________
For the Period For the Period
For the June 1, 2001 June 1, 2001
Nine-Months (date of (date of
Ended incorporation) incorporation)
September to September to September
30, 2002 30, 2001 30, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,053,287) $ (7,154,196) $(10,134,653)
Adjustments to reconcile net loss to net cash provided
(used in) operating activities:
Depreciation 31,504 - 31,577
Amortization of deferred stock compensation 1,475,748 - 1,721,346
Stock based compensation and consulting 176,769 7,155,000 7,891,771
Provision for bad debts 710 - 710
Non-cash expenses 2,075 - 28,575
Changes in assets and liabilities, net:
Decrease (increase) in deposits (2,616) - (516)
Increase in inventory (16,347) - (16,347)
Increase in receivables (31,592) - (3)
Increase in accounts payable and other liabilities 126,671 1,500 141,357
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (290,365) 2,304 (367,772)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (338,817) - (341,717)
Cash acquired in acquisition - - 209
NET CASH USED IN INVESTING ACTIVITIES (338,817) - (341,508)
CASH FLOWS FROM FINANCING ACTIVITIES-
Advances from affiliates, net 579,279 - 736,593
Increase in Due from Stockholder (3,750) - (3,750)
NET CASH USED IN FINANCING ACTIVITIES 575,529 - 732,843
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (53,653) 2,304 23,563
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 77,216 - -
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 23,563 $ 2,304 $ 23,563
============= ============= ==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 758 $ - $ 758
============= ============= =============
Income taxes paid $ - $ - $ -
============= ============= =============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued in acquisition of American Communications
Enterprises:
Accounts payable $ - $ - $ 14,216
Advances from stockholder subsequently converted
to common stock - - 156,916
Total $ - $ - $ 171,132
============= ============= =============
Stockholder advances converted to common stock $ 600,000 $ - $ 600,000
============= ============= =============
Equipment financed through payables $ 79,850 $ - $ 79,850
============= ============= =============
Deferred compensation on grants of stock options $ - $ - $ 4,036,500
============= ============= =============
__________________________________________________________________________________________________________________
See notes to consolidated financial statements.
6
NeoGenomics, Inc.
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
________________________________________________________________________________
NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS
NeoGenomics, Inc. ("NEO") was incorporated under the laws of the state of
Florida on June 1, 2001 and on November 14, 2001, agreed to be acquired by
American Communications Enterprises, Inc. ("ACE"). ACE was formed in 1998 and
succeeded to NEO's name on January 14, 2002. As a result of this acquisition,
the accompanying consolidated financial statements include the accounts of NEO
and ACE (collectively referred to as "we", "us", "our"). All significant
intercompany accounts and balances have been eliminated in consolidation.
For financial statement purposes, the acquisition has been treated as a reverse
acquisition and a recapitalization with NEO being treated as the acquirer. In
connection therewith, ACE issued 238,500,000 shares of its common stock to NEO's
founder and sole stockholder in exchange for all of NEO's issued and outstanding
common shares. The value of these shares, which was based on the number, and
fair value of shares issued ($0.03 per share based on the price at which ACE's
shares were trading at that time), has been included in stock based compensation
and in the accompanying statement of operations. Immediately before the
acquisition, ACE had 131,733,896 shares outstanding and liabilities in excess of
assets of approximately $170,000. Since the transaction was accounted for as a
purchase the deficiency of $170,000 was reflected as an adjustment to
stockholders' equity as of the acquisition date.
As a result thereof, all references to the number of shares and par value in the
accompanying financial statements and notes thereto have been adjusted to
reflect the reverse acquisition, including the authorized number of shares of
our common stock and its par value as though all such changes had been completed
as of June 1, 2001.
We are considered to be a development stage (as defined in Financial Accounting
Standards Board Statement No. 7) biotech company organized for the principal
purpose of developing genomic tools for women's diseases, such as ovarian
cancer, and the early diagnosis of neonatal illness. We have not yet commenced a
significant level of operations, and most of our accounting policies and
procedures have not yet been established.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. The reported amounts of revenues and expenses during
the reporting period may be affected by the estimates and assumptions we are
required to make. Actual results could differ from our estimates.
Basis of Presentation
Our accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and the instructions to Form 10-QSB
and Rule 10-1 of Regulation S-X of the Securities and Exchange Commission (the
"SEC"). Accordingly, these consolidated financial statements do not include all
of the footnotes required by accounting principles generally accepted in the
United States of America. In our opinion, all adjustments (consisting of normal
and recurring adjustments) considered necessary for a fair presentation have
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been included. Operating results for the nine months ended September 30, 2002
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2002. The accompanying consolidated financial statements and
the notes thereto should be read in conjunction with our audited consolidated
financial statements as of and for the year ended December 31, 2001 contained in
our Form 10-KSB.
NOTE B - GOING CONCERN
Our consolidated financial statements were prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. We have incurred significant
losses since our inception, and have experienced, and continue to experience,
negative operating margins and negative cash flows from operations. In addition,
we expect to have ongoing requirements for substantial additional capital
investment to implement our business plan. We expect to seek additional funding
through the issuance of debt or equity securities. However, there can be no
assurance that we will be successful in these efforts. These factors, among
others, indicate that we may be unable to continue as a going concern.
Our financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should we be unable to
continue as a going concern.
NOTE C - RELATED PARTY TRANSACTIONS
Advances and Loans
During the third quarter of 2002, we received net advances from Tampa Bay
Financial, Inc. ("TBF"), one of our stockholders, of $225,600. These advances
were made pursuant to an agreement to purchase our common shares. They are
non-interest bearing, unsecured, and will be converted into shares of our common
stock at $0.033 per share. During August 2002, we converted $300,000 in advances
to 9,000,000 shares of our common stock. At September 30, 2002, we owed TBF
approximately $5,000.
We occasionally borrow funds from the Naples Women's Center ("NWC"), a company
owned by our president, to meet our short-term cash needs. These amounts have
been advanced to us with a stated interest rate of 8% and are due upon demand.
During the third quarter of 2002, we repaid approximately $1,500 of these
advances. At September 30, 2002, we owed NWC approximately $77,000.
Consulting Agreement
During the period November 2001 through September 2002, TBF provided us with
consulting services and paid certain of our expenses, including the salary of
our chief financial officer and costs incurred in preparing required filings
under securities laws. During the period November 2001 through September 2002,
expenses related to this agreement were $75,000. During the third quarter of
2002, we repaid $60,000 to TBF through the issuance of our common stock.
NOTE D - COMMITMENT
During September 2002, we entered into a collaborative research effort with
Ciphergen Biosystems. If a patented product or service results from this
research, the patenting party will be obligated to pay a 4% royalty to the other
party. As part of agreement, we have agreed to purchase supplies and equipment
approximating $128,000 over the next eight months. They have committed to award
us with a $100,000 research grant, which was received in October 2002.
8
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
financial statements for the three and nine months ended September 30, 2002, and
the period June 1, 2001 (date of incorporation) to September 30, 2002, included
with this Form 10-QSB.
Information related to our predecessor entity, American Communications
Enterprises, Inc. ("ACE"), has been omitted. ACE was formed in 1998 for the
purpose of operating radio stations and businesses within the communications
industry. ACE later changed its focus to genomics, which included acquiring a
private company desiring to become public. In November 2001, ACE and
NeoGenomics, Inc., a Florida Corporation ("NeoGenomics") entered into a Plan of
Exchange pursuant to which ACE acquired NeoGenomics. For financial statement
purposes, the merger has been treated as a reverse acquisition with NeoGenomics
being treated as the acquirer.
Readers are referred to the cautionary statement, which addresses
forward-looking statements made by us.
NeoGenomics, Inc. is considered to be in the development stage as defined in
Financial Accounting Standards Board Statement No. 7. It is currently in the
process of developing genomic tools for women's diseases.
Critical Accounting Policies
Our critical accounting policies, including the assumptions and judgments
underlying them, are disclosed in the Notes to the Financial Statements for the
fiscal year ended December 31, 2001 included in our Form 10-KSB. We have
consistently applied these policies in all material respects. At this stage of
our development, these policies primarily address matters of expense
recognition. Although we anticipate that revenue recognition issues will become
critical in future years, the small amount of revenue that we have earned at
this stage minimizes the impact of any judgments regarding revenue recognition.
Management does not believe that our operations to date have involved
uncertainty of accounting treatment, subjective judgment, or estimates, to any
significant degree.
Results of Operations for the three months ended September 30, 2002
We commenced operations on June 1, 2001. As a result we have not yet generated
any significant revenues.
During the three months ended September 30, 2002, we generated revenues and
costs of revenues of approximately $28,000 and $61,000 and we incurred a net
loss of approximately $732,200, which includes non-cash stock based compensation
expense of approximately $492,000. These expenses consist of the amortization of
deferred stock options, which were issued in November 2001 and other stock based
compensation and consulting. We believe our gross margin will improve if we add
additional business. Our general and administrative expenses were approximately
$191,000 and are mainly comprised of administrative services expenses, wages and
depreciation. Interest expenses were approximately $900 and are mainly comprised
of interest payable on advances from a related party.
Having completed our first full quarter of laboratory operations, testing
revenues have begun to show increases in the third quarter. We billed $27,869
for 83 tests in the quarter ended September 30, 2002, including 28 tests for
were cystic fibrosis, that are currently being subcontracted to other
laboratories, which are included as service charges to the patients.
Revenues per test are a function of both the nature of the test and who the
payer (Medicare, Medicaid, third party insurer, etc.). Our policy is to record amounts
billed at the amounts we expect to be collected based on published or
contracted amounts and prior experience with the payer.
9
We have established a reserve for uncollectible amounts based on estimates of
what we will collect from co-payments and those procedures performed that are
not covered by insurance.
Results of Operations for the nine months ended September 30, 2002
During the nine months ended September 30, 2002, we generated revenues and costs
of revenues of approximately $36,300 and $136,800, and we incurred a net loss of
approximately $2,053,000 which includes non-cash stock based compensation
expense of approximately $1,536,000. These expenses consist of the amortization
of deferred stock options, which were issued in November 2001, and other stock
based compensation and consulting. Our negative gross margin reflects costs
incurred to obtain certification and is expected to improve as our sales
increase. Our general and administrative expenses were approximately $378,300
and are mainly comprised of administrative services expenses, wages and
depreciation. Interest expenses were approximately $4,600 and are mainly
comprised of interest payable on advances from a related party.
Results of Operations for the period from June 1, 2001 to September 30, 2002
During the period from June 1, 2001 to September 30, 2002, we generated revenues
and costs of revenues of approximately $37,300 and $137,000, and we incurred a
net loss of approximately $10,135,000. Our net loss included non-cash stock
based compensation expense of approximately $9,466,000. This expense consisted
of the amortization of deferred stock options, which were issued in November
2001 and other stock based compensation and consulting. Our general and
administrative expenses were approximately $530,000. They were mainly comprised
of administrative service expenses, wages and depreciation. Interest expense was
approximately $4,600, and was primarily comprised of interest payable on
advances from a related party.
Future Periods
Management expects that research expenses will increase substantially in 2002
and in future years, as we expand our research and development activities. We
also expect that our other operating expenses will grow over time in connection
with the expansion of our laboratory facility.
Liquidity and Capital Resources
During the nine months ended September 30, 2002, our operating activities used
approximately $290,000 in cash. This amount primarily represented cash used to
pay general and administrative expenses associated with our operations. We spent
approximately $339,000 on new equipment. We were able to finance operations
primarily through net advances of approximately $579,000 received from a
significant shareholder and other affiliates. At September 30, 2002, we had cash
and cash equivalents of approximately $23,500.
At the present time, we have very limited cash resources. We do not anticipate
that we will generate significant cash flow from operating activities until
2003. As a result, we anticipate that we will require at least $300,000 in
additional working capital financing during the next 12 months in order to meet
our working capital requirements during this period. We currently plan to
finance our operations through the acquisition of borrowings and the sale of
shares of our common stock to Tampa Bay Financial, Inc. and other investors.
In May 2002, Tampa Bay Financial, Inc. agreed to purchase 45,000,000 shares of
our common stock for a price of $0.0333 per share, or a total of $1,500,000. As
of the date of this report, TBF has provided $700,000 under this agreement. In
November 2002, a dispute arose between the Company and TBF with respect to the
parties' obligations to each other. As a result of this dispute, TBF informed
the Company that they would not make any further payments under the May 2002
agreement until the dispute is resolved. Since that time, the Company and TBF
have been engaged in negotiations regarding the resolution of this dispute. In
the event that the Company and TBF are unable to reach agreement, the Company
will seek funding from other sources.
There can be no assurance that the Company will obtain further funding from TBF
or another source. If the Company is unable to obtain funding, the Company will
be required to curtail or discontinue operations.
10
Capital Expenditures
Management is currently researching a possible capital asset purchase that
would take place before year-end. This expenditure would be approximately
$150,000 and would be based on current market conditions and the overall impact
the equipment would have on operations. We plan to fund these expenditures
through the sale of shares to third parties.
Staffing
If we receive sufficient funding, we plan to increase our workforce. Currently,
we have seven full-time employees. We hired a laboratory technician and plan to
add an additional laboratory technician to assist us in operations. Management
has added three employees during 2002. We expect the cost of these additional
employees will be between $100,000 and $150,000 over the next 12 months.
Research Plans
The Company is in the initial stages of a project to identify a bio-marker for
pre-eclampsia, a disease which kills 60,000 pregnant women each year. In
connection with this project, the Company has purchased $180,000 of equipment
and committed to purchasing labor, supplies and equipment approximating $128,000
over the next eight months. The Company has obtained a $100,000 research grant
commitment to offset these costs. The research grant was received in October
2002.
CAUTIONARY STATEMENT
This Form 10-QSB, press releases and certain information provided periodically
in writing or orally by our officers or our agents contain statements which
constitute forward-looking statements within the meaning of Section 27A of the
Securities Act, as amended and Section 21E of the Securities Exchange Act of
1934. The words expect, anticipate, believe, goal, plan, intend, estimate and
similar expressions and variations thereof if used are intended to specifically
identify forward-looking statements. Those statements appear in a number of
places in this Form 10-QSB and in other places, particularly, Management's
Discussion and Analysis or Results of Operations, and include statements
regarding the intent, belief or current expectations us, our directors or our
officers with respect to, among other things: (i) our liquidity and capital
resources; (ii) our financing opportunities and plans and (iii) our future
performance and operating results. Investors and prospective investors are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those projected in the forward-looking statements as a
result of various factors. The factors that might cause such differences
include, among others, the following: (i) any material inability of us to
successfully internally develop our products; (ii) any adverse effect or
limitations caused by Governmental regulations; (iii) any adverse effect on our
positive cash flow and abilities to obtain acceptable financing in connection
with our growth plans; (iv) any increased competition in business; (v) any
inability of us to successfully conduct our business in new markets; and (vi)
other risks including those identified in our filings with the Securities and
Exchange Commission. We undertake no obligation to publicly update or revise the
forward looking statements made in this Form 10-QSB to reflect events or
circumstances after the date of this Form 10-QSB or to reflect the occurrence of
unanticipated events.
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Item 3 - CONTROLS AND PROCEDURES
Within 90 days prior to the date of filing of this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including the Chief Executive Officer and Chief Financial Officer, of the design
and operation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective for the gathering,
analyzing and disclosing the information we are required to disclose in the
reports we file under the Securities Exchange Act of 1934, within the time
periods specified in the SEC's rules and forms. There have been no significant
changes in our internal controls or in other factors that could significantly
affect internal controls subsequent to the date of this evaluation.
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PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities
In the third quarter of 2002, we issued the following: 17,677,012 shares of
common stock in exchange for employment and consulting services valued at
$176,769, and 9,000,000 shares of common stock in exchange for the cancellation
of $300,000 in cash advances. All of the stock was issued to a small group of
sophisticated investors in a transaction that the Company believes was exempt
from registration under Rule 506 promulgated under the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Securities Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
10.8 Research and License Agreement Between Neogenomics, Inc. and Ciphergen Biosystems, Inc.
99.1 Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NeoGenomics, Inc.
By:/s/Michael T. Dent, M.D. November 19, 2002
Michael T. Dent, M.D.
(President and Chief Executive Officer)
By:/s/Matthew A. Veal November 19, 2002
Matthew A. Veal
(Chief Financial Officer)
CERTIFICATION
I, Michael T. Dent, M.D., certify that:
1. I, and the registrant's other certifying officer have reviewed this quarterly
report on Form 10QSB of Neogenomics, Inc;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact, or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
13
statements were made, not misleading with respect to the period covered by
this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial position, results of operations, and cash
flows of the issuer as of, and for, the periods presented in this quarterly
report.
4. I, and the registrant's other certifying officer, are responsible for
establishing and maintaining disclosure controls and procedures for the issuer
and we have:
(i) designed such disclosure controls and procedures to ensure that
material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(ii) evaluated the effectiveness of the issuer's disclosure controls and
procedures as of September 30, 2002; and
(iii)presented in the report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. I, and the registrant's other certifying officer, have disclosed, based on my
most recent evaluation, to the issuer's auditors and the audit committee of the
board of directors (or persons fulfilling the equivalent function):
(i) all significant deficiencies in the design or operation of
internal controls which could adversely affect the issuer's
ability to record, process, summarize and report financial data
and have identified for the issuer's auditors any material
weaknesses in internal controls; and
(ii)any fraud, whether or not material, that involves management or
other employees who have a significant role in the issuer's
internal controls; and
6. I, and the registrant's other certifying officer, have indicated in the
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
November 19, 2002
/s/ Michael T. Dent, M.D.
Michael T. Dent, M.D.
President and CEO
14
CERTIFICATION
I, Matthew A. Veal, certify that:
1. I, and the registrant's other certifying officer have reviewed this quarterly
report on Form 10QSB of Neogenomics, Inc;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact, or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
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statements were made, not misleading with respect to the period covered by
this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial position, results of operations, and cash
flows of the issuer as of, and for, the periods presented in this quarterly
report.
4. I, and the registrant's other certifying officer, are responsible for
establishing and maintaining disclosure controls and procedures for the issuer
and we have:
(i) designed such disclosure controls and procedures to ensure that
material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(ii) evaluated the effectiveness of the issuer's disclosure controls and
procedures as of September 30, 2002; and
(iii)presented in the report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. I, and the registrant's other certifying officer, have disclosed, based on my
most recent evaluation, to the issuer's auditors and the audit committee of the
board of directors (or persons fulfilling the equivalent function):
(i) all significant deficiencies in the design or operation of
internal controls which could adversely affect the issuer's
ability to record, process, summarize and report financial data
and have identified for the issuer's auditors any material
weaknesses in internal controls; and
(ii)any fraud, whether or not material, that involves management or
other employees who have a significant role in the issuer's
internal controls; and
6. I, and the registrant's other certifying officer, have indicated in the
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
November 19, 2002
/s/ Matthew A. Veal
Matthew A. Veal
CFO