-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MDAecQqzAr/W1JNy/CxGQH37MQHZlSs39sMavbvg25R9yB+BfoXLA/GWKvUQ2xl2 AsOIhhlgZT2nnqoozYPVtg== 0000311927-99-000017.txt : 19991115 0000311927-99-000017.hdr.sgml : 19991115 ACCESSION NUMBER: 0000311927-99-000017 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIO RESPONSE INC CENTRAL INDEX KEY: 0000311927 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 593453151 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-09201 FILM NUMBER: 99750010 BUSINESS ADDRESS: STREET 1: 1612 N OSCEOLA CITY: CLEARWATER STATE: FL ZIP: 33755 BUSINESS PHONE: 7274433434 MAIL ADDRESS: STREET 1: 1612 N OSCEOLA CITY: CLEARWATER STATE: FL ZIP: 33755 10QSB 1 BIO-RESPONSE 10QSB 09/30/1999 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-9201 BIO-RESPONSE, INC. (Exact name of Issuer as specified in its charter) Delaware 59-3453151 (State or (I.R.S. Employer other jurisdiction of Identification No.) incorporation or organization) 1612 N. Osceola Avenue Clearwater, Florida 33755 (Address of principal offices) (727) 443-3434 (Issuer's telephone number, including area code) Indicate by check mark whether the Issuer (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 Issuer 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 stock, as of the latest practicable dates. Title of Each Class Outstanding at September 30, 1999 Common Stock, $0.004 Par Value 800,000 - see financial note 4 for more explanation TABLE OF CONTENTS PART I FINANCIAL INFORMATION PAGE ITEM 1 Financial Statements Balance Sheets as of September 30, 1999 and September 30, 1998 3 Statements of Income for the Three Month Periods Ended September 30, 1999 and September 30, 1998. 4 Statements of Cash Flow for the Three Month Periods Ended September 30, 1999 and September 30, 1998. 5 Notes to Financial Statements 6 ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II OTHER INFORMATION 12 SIGNATURES 12 BIO-RESPONSE, INC. (a Dormant State Company) Balance Sheet September 30, 1999 and September 30, 1998 (unaudited) 06/30/99 06/30/98 Assets Organization Cost ....................... $ 0 $ 0 Total Assets ........................... 0 0 Liabilities and Shareholder's Equity .... 0 0 Stockholders' Equity .................... 0 0 Common Stock par value at $.004 per share 25,000,000 shares authorized, 800,000 shares issued and outstanding(4) 0 0 Net Income/Loss for Period .............. (7,906) (4,935) Additional Paid in Capital .............. 7,906 4,935 Retained Earnings (Deficit) ............ (106,834) (43,921) --------- --------- Total Shareholders' Equity .............. 0 0 --------- --------- Total Liabilities and Shareholders Equity $ 0 $ 0 ========= ========= See accompanying notes to financial statements BIO-RESPONSE, INC. (a Dormant State Company) Statements of Operations for the periods ending September 30, 1999 and September 30, 1998 (unaudited) For Three Months Ended 1999 1998 09 -30-99 09 -30-98 ------- -------- Revenues ..................... $ 0 $ 0 Expenses Administrative Expenses ...... $ 7,906 $ 4,935 Filing Fees .................. $ 0 $ 0 Net Income/Loss for the period $ (7,906) $ (4,935) ============= ============= See accompanying notes to financial statements BIO-RESPONSE, INC. (a Dormant State Company) Statements of Cash Flows for three months ended September 30, 1999 and 1998 (unaudited) For Three Months Ended 09-30-99 09-30-98 -------- -------- Cash Flows from Operating Activities Net Income ........................ $ (7,906) $ (4,935) Net Cash Provided (used) / By Operating Activities ............ 0 0 Expenses Paid by Capston ........... 7,906 4,935 Net Increase (Decrease) in Cash .... 0 0 Cash at Beginning of Period ........ 0 0 ------------- ------------- Cash at End of Period .............. $ 0 $ 0 ============= ============= See accompanying notes to financial statements BIO-RESPONSE, INC. (A Dormant State Company) September 30, 1999 Note 1. HISTORY OF THE COMPANY BIO-RESPONSE, Inc., (A Dormant State Company), was incorporated on 1972, under the laws of the State of Delaware. The Company conducted an initial public offering of its Common Stock in January, 1979 and in connection with an application to list its Common Stock on the NASDAQ system, the Company also registered its Common Stock pursuant to Section 12(g) of the Securities Exchange Act of 1934. On September 14, 1989, the Company filed a voluntary petition under Chapter 11 of the Bankruptcy Act (Case No. 4-89-04159 N-3) in the U.S. Bankruptcy Court for the Northern District of California. On September 15, 1995, the Company's case under Chapter 11 was closed under court order. As a result of the bankruptcy case, all assets of the Company were overseen by the Trustee in Bankruptcy. The assets were sold and the Company ceased all operations. The Trustee in Bankruptcy effected an orderly liquidation of corporate assets and used the proceeds to repay the Company's creditors. On September 15, 1995 the Company's case under Chapter 11 was closed by an order of the Court and the Trustee in Bankruptcy was discharged. As a result of the Bankruptcy, the Company has no assets, liabilities, management or ongoing operations and has not engaged in any business activities for a a decade. Note 2. RESTORATION OF CORPORATE STATUS On June 10, 1996, acting in its capacity as the holder of 2000 shares (0.0002%) of the Company's common stock, and without first receiving the consent, approval or authorization of any other person associated with the Company, Capston Network Company effected a renewal, revival and restoration of the Company's certificate of incorporation pursuant to Section 312 of the General Corporation Law of Delaware. Thereafter, Capston filed a 10-K for the years ending December 31, 1990-1996, and a Proxy Statement seeking approval and ratification of its actions, along with authorization to seek a suitable business combination transaction. This proxy statement was ultimately distributed to the Company's stockholders and the proposals therein were approved by the holders of a majority of the Company's issued and outstanding shares. Under the terms of the original Proxy Statement, Capston was authorized to seek a suitable business combination transaction on behalf of the Company and to submit the terms of any proposed business combination transaction to the Company's stockholders for their approval. Capston did not receive and was not entitled to receive any equity interest in the Company as a result of its actions prior to the date of the Proxy Statement. Moreover, Capston was not entitled to reimbursement for any expenses incurred by it on behalf of the Company except to the extent that the terms of a business combination transaction provided for the reimbursement of such expenses. However, because Sally Fonner is both the President of BIO-RESPONSE and Capston, prior Staff Accounting Bulletins require under generally accepted accounting principles the treatment of debiting the expenses with corresponding credit to paid-in capital. Future expenses of Capston or others will be treated this way. These expenses are actual cash expenditures and do not reflect any costs associated with the operation of Capston nor any personnel time or cost. Note 3. FUTURE EXPENSES Capston will continue to extend administrative expenses to keep BIO-RESPONSE current with its reporting requirements, keeping the Corporation in good standing, any required proxy solicitation or acquisition efforts. These amounts should not exceed another $100,000 in out-of-pockets costs. In addition, as approved, and as a result of a suitable acquisition, additional fees paid for by issuance of equity position would be for: (i) up to 4,500,000 shares for an acquisition(s), (ii) up to 5% of the acquisition for a finder's fee and (iii) legal/consulting fees. Note 4. OUTSTANDING COMMON SHARES On March 31, 1999, the Company filed an amendment to its certificate of incorporation that was intended to implement the 30.5885 to 1 reverse split approved by the stockholders in 1997. In connection with the filing of this Certificate of Amendment, the Company's sole director elected to implement certain rounding provisions to maximize the number of round-lot holders. While the implementation of these rounding provisions was based on the advice of legal counsel, the Company was subsequently advised by Delaware counsel that such rounding provisions were not in compliance with Delaware law. In addition, it was discovered that a clerical mistake had been made in the filing on the original reverse formula (it was filed as a 32 to 1 reverse split). Accordingly, on October 25, 1999 the Company filed a corrected Amendment to its Certificate of Incorporation which implemented the precise reverse split approved by the stockholders, Concurrently, legal counsel for the Company surrendered an aggregate of 27,904 shares of Common Stock to the Company's transfer agent for cancellation in order to (1) offset the over issuance of shares to certain of the Company's stockholders who benefited from the rounding provisions prior to the filing of the a corrected Amendment, and (2) bring the total number of shares issued and outstanding down to 800,000. Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations. Financial Condition BIO-RESPONSE has no operations, assets or liabilities. Expenses incurred to keep it in good standing with governmental and regulatory bodies, maintain the transferability of its stock and interact with stockholders, are paid by Capston. Corporate Background Information BIO-RESPONSE conducted an initial public offering of its Common Stock in September, 1979 pursuant to a Form S-2 Registration Statement under the Securities Act of 1933 (the "Securities Act"). In connection with an application to list its Common Stock on the NASDAQ system, the Company also registered its Common Stock pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act"). The Company remained current with respect to its reporting obligations under the Exchange Act until 1990. After pursuing its business for several years, BIO-RESPONSE filed a voluntary petition under Chapter 11 of the Bankruptcy Act on September 14, 1989. This proceeding was filed in with the U.S. Bankruptcy Court for the Northern District of California and designated as Case # 4-89-04159 N-3. On September 15, 1995 the Company's case under Chapter 11 was closed by an order of the Court. As a result of the Bankruptcy, the Company has no assets, liabilities, management or ongoing operations and has not engaged in any business activities for well over a half of a decade. During the pendancy of the Bankruptcy, the Company did not file franchise tax returns with and pay the required franchise taxes to the State of Delaware. As a result, the Company's corporate charter was revoked by order of the Secretary of State of the State of Delaware on August 30, 1991. Similarly, the Company did not file with the SEC either (a) the regular reports that are required of all companies that have securities registered under the Exchange Act, or (b) a certification on Form 15 terminating its registration under the Exchange Act. As a result, the Company remained a Registrant under the Exchange Act but was seriously delinquent in its SEC reporting obligations. According to Lumiere Securities, the last published quotation for the Company's Common Stock was posted by M. H. Meyerson & Co., Inc., one of the Company's market makers, on September 30, 1998. At this time, the published quote was $0.03 bid and $0.10 asked. Acting in its capacity as a Stockholder of the Company, and without first receiving any consent, approval or authorization of any officer, director or other Stockholder of the Company, Capston effected a renewal, revival and restoration of the Company's certificate of incorporation pursuant to Section 312 of the General Corporation Law of the State of Delaware. In general, Section 312 provides that any corporation may "procure an extension, restoration, renewal or revival of its certificate of incorporation, together with all the rights, franchises, privileges and immunities and subject to all of its duties, debts and liabilities which had been secured or imposed by its original certificate of incorporation" upon compliance with certain procedural requirements. After reviewing the applicable files, Capston determined that the only debt of the Company that was "secured or imposed by its original certificate" was the obligation of BIO-RESPONSE to pay its Delaware taxes. Therefore, Capston paid all past due franchise taxes on behalf of the Company and then filed a Certificate of Renewal, Revival, Extension and Restoration of the Company's Certificate of Incorporation on behalf of the Company under the authority granted by Section 312(h). The total out-of-pocket costs paid by Capston incurred in connection with the restoration of the Company's charter was $450. This Certificate was filed in the office of the Secretary of State of the State of Delaware on December 26, 1996 and at the date of this Proxy Statement the Company is lawfully incorporated, validly existing and in good standing under the laws of the State of Delaware. Proposed Operations While the Company has no assets, liabilities, management or ongoing operations and has not engaged in any business activities, Capston believes that it may be possible to recover some value for the Stockholders through the adoption and implementation of a Plan whereby the Company will be restructured as a "clean public shell" for the purpose of effecting a business combination transaction with a suitable privately-held company that has both business history and operating assets. Capston believes the Company will offer owners of a suitable privately-held company the opportunity to acquire a controlling ownership interest in a public company at substantially less cost than would otherwise be required to conduct an initial public offering. Nevertheless, Capston is not aware of any empirical statistical data that would independently confirm or quantify Capston's beliefs concerning the perceived value of a merger or acquisition transaction for the owners of a suitable privately-held company. The owners of any existing business selected for a business combination with the Company will incur significant costs and expenses, including the costs of preparing the required business combination agreements and related documents, the costs of preparing a Current Report on Form 8-K describing the business combination transaction and the costs of preparing the documentation associated with any future reporting under the Exchange Act and registrations under the Securities Act. The Plan is approved by the Stockholders. The Company is fully reactivated and ready to be used as a corporate vehicle to seek, investigate and, if the results of such investigation warrant, effect a business combination with a suitable privately-held company or other business opportunity presented to it by persons or firms that seek the perceived advantages of a publicly held corporation. The business operations proposed in the Plan are sometimes referred to as a "blind pool" because Stockholders will not ordinarily have an opportunity to analyze the various business opportunities presented to the Company, or to approve or disapprove the terms of any business combination transaction that may be negotiated by Capston on behalf of the Company. Consequently, the Company's potential success will be heavily dependent on the efforts and abilities of Capston and its officers, directors and consultants, who will have virtually unlimited discretion in searching for, negotiating and entering into a business combination transaction. Capston and its officers, directors and consultants have had limited experience in the proposed business of the Company. Although Capston believes that the Company will be able to enter into a business combination transaction during 1999, there can be no assurance as to how much time will elapse before a business combination is effected, if ever. The Company will not restrict its search to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. Capston and its officers, directors and consultants anticipate that the selection of a business opportunity for the Company will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, Capston believes that there are numerous privately-held companies seeking the perceived benefits of a publicly traded corporation. Such perceived benefits may include facilitating debt financing or improving the terms on which additional equity or may be sought, providing liquidity for the principals of the business, creating a means for providing incentive stock options or similar benefits to key employees, providing liquidity for all stockholders and other factors. Potential business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Capston anticipates that the Company will be able to participate in only one business venture. This lack of diversification should be considered a substantial risk inherent in the Plan because it will not permit the Company to offset potential losses from one venture against gains from another. Moreover, due to the Company's lack of any meaningful financial, managerial or other resources, Capston believes the Company will not be viewed as a suitable business combination partner for either developing companies or established business that are in need of substantial additional capital. Acquisition of Opportunities In implementing a particular business combination transaction, the Company may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. It may also purchase stock or assets of an existing business. After the consummation of a business combination transaction, it is likely that the present Stockholders of the Company will only own a small minority interest in the combined companies. In addition, as part of the terms of the acquisition transaction, all of the Company's officers and directors will ordinarily resign and be replaced by new officers and directors without a vote of the Stockholders. Capston does not intend to obtain the approval of the Stockholders prior to consummating any acquisition other than a statutory merger that requires a Stockholder vote. It is anticipated that any securities issued in a business combination transaction will be issued in reliance on exemptions from registration under applicable Federal and state securities laws. In some circumstances, however, as a negotiated element of a business combination, the Company may agree to register such securities either at the time the transaction is consummated or at some specified time thereafter. The issuance of substantial additional securities and their potential sale into any trading market that may develop may have a depressive effect on such market. While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called "tax free" reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the "Code"). In order to obtain tax-free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, the stockholders of the Company would retain less than 20% of the issued and outstanding shares of the combined companies, which could result in significant dilution in the equity of such stockholders. The Company intends to structure any business combination in such manner as to minimize Federal and state tax consequences to the Company and any target company. As part of the Company's investigation of potential business opportunities, Capston and its officers, directors and consultants will ordinarily meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check reference of management and key personnel, and take other reasonable investigative measures, to the extent of the Company's limited resources and Capston's limited expertise. The manner in which the Company participates in an opportunity will depend on the nature of the opportunity, the respective needs and desires of the Company and other parties and the relative negotiating strength of the Company and such other management. With respect to any business combination negotiations, Capston will ordinarily focus on the percentage of the Company which target company stockholders would acquire in exchange for their ownership interest in the Target Company. Depending upon, among other things, the target company's assets and liabilities, the Company's stockholders will in all likelihood only own a small minority interest in the combined companies upon completion of the business combination transaction. Any business combination effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company's current Stockholders. Upon completion of a business combination transaction, there can be no assurance that the combined companies will have sufficient funds to undertake any significant development, marketing and manufacturing activities. Accordingly, the combined companies may be required to either seek additional debt or equity financing or obtain funding from third parties, in exchange for which the combined companies might be required to issue a substantial equity position. There is no assurance that the combined companies will be able to obtain additional financing on terms acceptable to the combined companies. It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity the costs incurred in the related investigation would not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss of the Company of the related costs incurred. Exemption from Rule 419 As an existing Registrant under the Exchange Act, the Company's proposed activities are not subject to SEC Rule 419 which was adopted to strengthen the regulation of "blind pool" companies which Congress has found to have been common vehicles for fraud and manipulation in the penny stock market. The Company is not subject to Rule 419 because it is not offering stock to the public in an offering registered under the Securities Act. Accordingly, Stockholders are not entitled to the substantive protection provided by Rule 419. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS NONE ITEM 2. CHANGES IN SECURITIES NONE ITEM 3. DEFAULTS ON SENIOR SECURITIES NONE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE ITEM 5. OTHER INFORMATION NONE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. Exhibits 3.1 (I) Corrected Certificate of Amendment filed October 25, 1999 B. Reports on Form 8-K NONE SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BIO-RESPONSE, INC. /s/ --------------------------------- Sally A. Fonner Chief Executive Officer Dated: November 11, 1999 /s/ --------------------------------- Sally A. Fonner Chief Financial Officer Dated: November 11, 1999 EX-3.1(I) 2 CORRECTED CERTIFICATE OF AMENDMENT Exhibit 3.1 CORRECTED CERTIFICATE OF AMENDMENT OF BIO-RESPONSE, INC. BIO-RESPONSE, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: 1. The name of the corporation is BIO-RESPONSE, Inc. 2. A Certificate of Amendment (the "Certificate of Amendment") was filed with the Secretary of State of the State of Delaware on March 31, 1999 under the previous name of the corporation, BIO-RESPONSE, INC., which contains an inaccurate record of the corporate action taken therein, and said Certificate of Amendment requires correction as permitted by subsection (f) of Section 103 of the General Corporation Law of the State of Delaware. 3. The Certificate of Amendment incorrectly states that the amendments set forth therein were approved by the stockholders of the corporation, when in fact the amendment to for the "round lot holder", (any one holding 100 shares or more), which kept them from being reduced below that status, had not been so approved by the stockholders and the reverse stock split referenced therein had been approved by the stockholders at a 30.5885 to 1 ratio rather than at a 32 to 1 ratio with only rounding for fractional shares. 4. The Certificate of Amendment is therefore amended to read in its corrected form as follows: AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF BIO-RESPONSE, INC. BIO-RESPONSE, Inc. (the "Corporation"), pursuant to the requirements of the General Corporation Law of the State of Delaware, as amended ("GCLD"), hereby certifies: 1. The amendment to the Certificate of Incorporation set forth herein was duly adopted in accordance with Section 242 of the GCLD by resolution of the Corporation's Board of Directors, submitted to the Corporation's stockholders for their approval, and approved by a majority vote of the Corporation's stockholders at a meeting called, noticed and held on the 10th day of March, 1997 and finalized on July 29, 1997 after several adjournments of less than 30 days each. 2. The number of shares of the Corporation outstanding at the time of such adoption and the number of shares entitled to vote thereon was NINE MILLION, ONE HUNDRED SEVENTY-SIX THOUSAND FIVE HUNDRED FIFTY-FOUR (9,176,554) shares of common stock (the "Common Stock"). The holders of FIVE MILION, THIRTY-NINE THOUSAND, NINE HUNDRED THIRTY-FOUR (5,039,934) shares of Common Stock were present at the meeting in person or by proxy and each of the amendments set forth herein was approved by the holders of a majority of the Corporation's issued and outstanding shares of Common Stock. 3. The effective date and time of the Certificate of Amendment shall be 5 p.m. EST on April 2, 1999. 4. Article Fourth of the Certificate of Incorporation is hereby amended to read in its entirety as follows: ARTICLE FOURTH AUTHORIZED CAPITAL The Corporation shall be authorized to issue a total of Thirty Million (30,000,000) shares of capital stock which shall be subdivided into classes as follows: (a) Twenty-five Million (25,000,000) shares of the Corporation's capital stock shall be denominated as Common Stock, have a par value of $.004 per share, and have the rights, powers and preferences set forth in this paragraph. The Holders of Common Stock shall share ratably, with all other classes of common equity, in any dividends that may, from time to time, be declared by the Board of Directors. No dividends may be paid with respect to Corporation's Common Stock, however, until dividend distributions to the holders of Preferred Stock, if any, have been paid in accordance with the certificate or certificates of designation relating to such Preferred Stock. The holders of Common Stock shall share ratably, with all other classes of common equity, in any assets of the Corporation that are available for distribution to the holders of common equity securities of the Corporation upon the dissolution or liquidation of the Corporation. The holders of Common Stock shall be entitled to cast one vote per share on all matters that are submitted for a vote of the stockholders. Effective at 5:00 p.m. EST on April 2, 1999, and without any further action by the holders the Common Stock of the Corporation, the NINE MILLION, ONE HUNDRED SEVENTY-SIX THOUSAND FIVE HUNDRED FIFTY-FOUR (9,176,554) issued and outstanding shares of the Corporation's Common Stock shall be consolidated or "reverse split" in the ratio of one (1) new share for every thirty and 5885/10,000 (30.5885) shares currently held by a stockholder. No fractional shares shall be issued in connection with the reverse split and all calculations that would result in the issuance of a fractional share shall be rounded up to the nearest whole number. (b) Five Million (5,000,000) shares of the Corporation's authorized capital stock shall be denominated as Preferred Stock, par value of $.004 per share. Shares of Preferred Stock may be issued from time to time in one or more series as the Board of Directors, by resolution or resolutions, may from time to time determine, each of said series to be distinctively designated. The voting powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, if any, of each such series of Preferred Stock may differ from those of any and all other series of Preferred Stock at any time outstanding, and the Board of Directors is hereby expressly granted authority to fix or alter, by resolution or resolutions, the designation, number, voting powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions thereof, of each such series of Preferred Stock. BIO-RESPONSE, Inc. has caused this Corrected Certificate of Amendment to be signed by its authorized officer this 25th day of October, 1999. BIO-RESPONSE, INC. By: /s/ ----------------------- Name: Sally A. Fonner Title: President -----END PRIVACY-ENHANCED MESSAGE-----