Filed On 12/1/04 2:45pm ET · SEC File 0-11730 · Accession Number 949303-4-74
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
12/01/04 Cognigen Networks Inc 10KSB/A 6/30/04 1:4 949303
Amendment to Annual Report -- Small Business · Form 10-KSB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10KSB/A Amendment to Annual Report -- Small Business HTML 56K
This is an EDGAR HTML document rendered as filed. [ Alternative Formats ]
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 0-11730
COGNIGEN NETWORKS, INC.
(Name of small business issuer in its charter)
COLORADO 84-1089377
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
6405 218th Street, SW, Suite 305
Mountlake Terrace, Washington 98043
----------------------------- -----
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number:
(425) 329-2300
-------------------------------------
Securities registered under Section 12(b) of the Exchange Act:
None.
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
----------------------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 __
---
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. _____
State issuer's revenue for its most recent fiscal year: $10,735,099
The aggregate market value of the voting and non-voting common equity held
by non-affiliates at September 2, 2004, computed by reference to the last sale
price of $0.17 per share on the OTC Bulletin Board, was $332,747.
The number of shares outstanding of each of the issuer's classes of common
equity on September 2, 2004, was 8,753,972.
Documents Incorporated by Reference
None
Transitional Small Business Disclosure Format Yes __ No |X|
---
TABLE OF CONTENTS
PART I
Item 1. Description of Business*
Item 2. Description of Property*
Item 3. Legal Proceedings*
Item 4. Submission of Matters to a Vote of Security Holders*
PART II
Item 5. Market for Common Equity and Related Stockholder Matters*
Item 6. Management's Discussion and Analysis or Plan of Operation*
Item 7. Financial Statements*
Item 8. Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure*
Item 8A. Controls and Procedures*
Item 8B. Other Information*
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act
Item 10. Executive Compensation*
Item 11. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Item 12. Certain Relationships and Related Transactions
Item 13. Exhibits and Reports on Form 8-K*
Item 14. Principal Accountant Fees and Services*
* The information required by Items 1 through 8 and Item 13 was set forth in our
Annual Report on Form 10-KSB that was filed on September 22, 2004 and the
information required by Items 10 and 14 was set forth in our Annual Report
on Form 10-KSB/A that was filed on October 25, 2004.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.
CURRENT DIRECTORS
The name, position with us, age of each of our current directors and the
period during which each of our current directors has served as one of our
directors are as follows:
Name and Position Age Director Since
----------------- --- --------------
Thomas S. Smith 62 2004
President, Chief Executive Officer
and Director
Gary L. Cook 46 2003
Senior Vice President, Chief
Financial Officer, Secretary,
Treasurer and Director
David L. Jackson 66 1995
Director
Christopher R. Seelbach (1)(2) 65 2001
Director
James H. Shapiro (1) 66 2002
Director
Thomas S. Smith has been one of our directors since January 2004 and our
President and Chief Executive Officer since December 2003. From April 2003 until
December 31, 2003, Mr. Smith was a shareholder of Jones & Keller, P.C.; from
August 2000 until April 2003, he was a partner of and then of counsel to Dorsey
& Whitney, LLP; from September 1996 until August 2000, he was a director of
Smith McCullough, P.C.; from 1972 until August 1996, he was a director of Hopper
and Kanouff, P.C. During all of his law firm experience, he practiced corporate
and securities law. He graduated from Duke University and the University of
North Carolina Law School.
Gary L. Cook has been one of our directors since June 2003, our Secretary since
April 2004, and our Senior Vice President, Chief Financial Officer and Treasurer
since March 2003. Mr. Cook was one of our directors from October 2002 until
March 2003. From June 2002 to March 2003, Mr. Cook was an independent financial
consultant. From February 1998 to June 2002, Mr. Cook was the Secretary and
Treasurer of eVision International, Inc., which has no significant operations
and formerly was a holding company, and was Chief Financial Officer of eVision
International, Inc. from September 1998 to June 2002. From 1998 to June 2002,
Mr. Cook was Chief Financial Officer, Treasurer and a Director of American
Frontier Financial Corporation, a wholly owned subsidiary of eVision
International, Inc. American Frontier Financial Corporation filed for Bankruptcy
in October 2001. The bankruptcy filing was dismissed in April 2002. From 1994 to
1996, Mr. Cook was principal of a small business venture in which he had
majority ownership, and from 1982 to 1994, he was an auditor with KPMG, LLP. Mr.
Cook also is a director of Global Med Technologies, Inc. Mr. Cook graduated from
Brigham Young University.
David L. Jackson has been one of our directors since February 1995, and was our
Senior Vice President of Corporate and Public Affairs or our Vice President from
August 1999 to April 2004, our Secretary from August 1999 to April 2004, our
Treasurer from August 1999 to July 2000, our President and Chairman of the Board
from 1996 to August 1999, our Vice President from 1995 to 1996 and our President
and the Chairman of the Board from 1990 to 1992. From August 1999 to March 2002,
Mr. Jackson was a director and the Secretary of Inter-American
Telecommunications Holding Corporation, the net assets of which we acquired in
August 1999. Mr. Jackson has been a licensed real estate broker in California
since 1991. Mr. Jackson graduated from Northwest Nazarene University and from
the University of Denver, College of Law. Mr. Jackson is an arbitrator in
dispute resolution of commercial and labor law. He was on the roster of
arbitrators of the Federal Mediation and Conciliation Service of the United
States Government from March 1994 to October 2002.
Christopher R. Seelbach has been one of our directors since August 2001. From
1985 to the present, Mr. Seelbach has been President of Seelbach Associates LLC,
a management consulting firm. At various times from 1998 through May 2001, Mr.
Seelbach served as a consultant, director, Chief Operating Officer and acting
Chief Financial Officer of CallNOW.com, Inc., a telecommunications company. From
1994 to 1998, he was an independent consultant, and served as President and
Chief Executive Officer of Belcom, Inc., a COMSAT international
telecommunications investment, and President of Skysat Communications
Corporation, a wireless telecommunications systems development company. From
1992 to 1994 Mr. Seelbach was a director and Chief Operating Officer of Viatel,
Inc., an international telecommunications company. Prior to 1992, he was a
venture capitalist with Exxon Enterprises and a consultant with McKinsey &
Company. Mr. Seelbach graduated from the United States Naval Academy and
received an M.B.A. from Columbia University.
James H. Shapiro has been one of our directors since October 2002. Since 1995
Mr. Shapiro has been the Chief Executive Officer of Windermere Services Company,
a company that provides real estate services. Mr. Shapiro graduated from the
University of Washington.
(1) Member of our Audit Committee and member of our Compensation Committee.
(2) Christopher R. Seelbach has been determined by our Board of Directors
to be the financial expert on our Audit Committee. Christopher R. Seelbach and
James H. Shapiro are independent within the meaning of Rules 4200(a)(15) and
4350(d) of the NASDAQ stock market.
EXECUTIVE OFFICERS
Our executive officers are Thomas S. Smith and Gary L. Cook, information
pertaining to them is set forth under Current Directors above. Our executive
officers are elected annually at the first meeting of the Board of Directors
held after each annual meeting of shareholders. Each executive officer will hold
office until his or her successor duly is elected and qualified, until his or
her death or resignation or until he or she shall be removed in the manner
provided by our bylaws.
There are no arrangements or understandings between any executive officer
and any other person pursuant to which any person was selected as an executive
officer.
CONSULTANT
Kevin E. Anderson is not one of our executive officers but makes and is
expected to make a significant contribution to our business. Mr. Anderson, who
is 53, has been a consultant to us and our Board of Directors since August 1999
and the founder and President of Cognigen Corporation and Kevin E. Anderson
Consulting, Inc. Mr. Anderson graduated from the University of California at Los
Angeles.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors and persons who beneficially own more than 10% of our outstanding
common stock to file reports of beneficial ownership with the Securities and
Exchange Commission and to furnish us with copies of the reports.
Based solely on a review of the Forms 3, 4 and 5 and amendments thereto
furnished to us during our fiscal year ended June 30, 2004, the persons who were
either one of our directors or officers or who beneficially owned more than 10%
of our common stock who failed to file on a timely basis reports required by
Section 16(a) of the Securities Exchange Act of 1934 were Kevin E. Anderson, the
Anderson Family Trust and Peter Tilyou, as trustee of the Anderson Family Trust,
all of whom may have failed to file their respective Forms 4 or Forms 5 during
our fiscal year ended June 30, 2004, and Stanford Venture Capital Holdings, Inc.
and Stanford Financial Group Company, Inc., which may have failed to file their
respective Forms 3, Forms 4, or Forms 5 during our fiscal year ended June 30,
2004.
Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
PRINCIPAL SHAREHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of October 22, 2004, the number of shares
of our outstanding common stock beneficially owned by each of our current
directors, sets forth the number of shares of our outstanding common stock
beneficially owned by all of our current executive officers and directors as a
group, and sets forth the number of shares of our outstanding common stock owned
by each person who owned of record, or was known to own beneficially, more than
five percent of the outstanding shares of our common stock:
Amount and Nature
of Beneficial
Name and Address Ownership(1) Percent of Class
---------------- ------------ ----------------
Thomas S. Smith 400,000(2) 3.4%
9800 Mt. Pyramid Court
Suite 400
Englewood, CO 80112
Gary L. Cook 430,000(3) 4.8%
9800 Mt. Pyramid Court
Suite 400
Englewood, CO 80112
David L. Jackson 283,649 3.2%
P.O. Box 1443
Lafayette, CA 94549
Christopher R. Seelbach 40,000(4) Less than 1%
44 Woodcrest Avenue
Short Hills, NJ 07078
James H. Shapiro 25,188(5) Less than 1%
20223 92nd Avenue West
Edmonds, WA 98020
All current executive officers 1,178,830(6) 12.6%
and directors as a group (5
persons)
Cognigen Corporation 25,250(7) Less than 1%
2608 Second Avenue, Suite 108
Seattle, WA 98121
Anderson Family Trust 1,158,505(7)(8) 13.2%
2608 Second Avenue, Suite 108
Seattle, WA 98120
Kevin E. Anderson 1,158,505(7)(8) 13.2%
2608 Second Avenue, Suite 108
Seattle, WA 98120
Peter Tilyou 1,158,505(9)(10) 13.2%
2608 Second Avenue, Suite 555
Seattle, WA 98121
Stanford Venture Capital 1,075,000(11) 11.5%
Holdings, Inc.
5050 Westheimer
Houston, TX 77056
(1) Except as indicated below, each person has sole and voting and/or
investment power over the shares listed.
(2) Includes 100,000 shares underlying a presently exercisable option. Does not
include 100,000 shares that underlie an option that is not yet exercisable
as to the 100,000 shares.
(3) Includes 130,000 shares underlying two presently exercisable options.
(4) Includes 25,000 shares underlying presently exercisable options.
(5) Includes 25,000 shares underlying presently exercisable options.
(6) Includes the 280,000 shares underlying the presently exercisable options
specified in footnotes (2) through (5) above.
(7) Kevin E. Anderson and members of his family are the beneficiaries of the
Anderson Family Trust , which owns approximately 98.9% of the outstanding
common stock of Cognigen Corporation. Mr. Anderson may be deemed to
beneficially own the 25,250 shares of the common stock that Cognigen
Corporation may be deemed to beneficially own.
(8) Kevin E. Anderson and members of his family are the beneficiaries of the
Anderson Family Trust. Kevin E. Anderson may be deemed to beneficially own
the shares owned by the Anderson Family Trust.
(9) Includes the shares owned by the Anderson Family Trust and Cognigen
Corporation, all of which may be deemed to be beneficially owned by Peter
Tilyou. Mr. Tilyou is the sole trustee, but not a beneficiary of the
Anderson Family Trust.
(10) The information pertaining to the shares of common stock beneficially owned
by the Anderson Family Trust and Cognigen Corporation is based on our
shareholder records.
(11) Includes 500,000 shares issuable upon conversion of our 8% Convertible
Preferred Stock. Also, includes 400,000 shares and 175,000 shares
underlying presently exercisable warrants owned by Stanford Financial Group
Company, Inc. which has the same address as Stanford Venture Capital
Holdings, Inc. The information pertaining to these shares is based on a
joint Schedule 13G filed by Stanford Venture Capital Holdings, Inc. and
Stanford Financial Group Company, Inc. and our records.
Stock Option Plan
We adopted an incentive and non-statutory option plan at our Annual Meeting
of Shareholders held on March 15, 2001. The plan authorizes the granting of
options to our officers, directors, employees and consultants to purchase shares
of our common stock.
The following is a table with information regarding our equity compensation
plans as of June 30, 2004:
Equity Compensation Plans
--------------------------------------------------------------------------------
Plan category Number of Weighted-average Number of
securities to exercise price of securities
be issued upon outstanding remaining
exercise of options, warrants available for
outstanding and rights (b) future issuance
options, under equity
warrants and compensation
rights (a) plans (excluding
securities
reflected in
column (a) (c))
--------------------------------------------------------------------------------
Equity compensation
plans approved by 475,000 $0.33 150,000
security holders
--------------------------------------------------------------------------------
Equity compensation
plans not approved by
security holders 2,225,000 $2.06 -
--------------------------------------------------------------------------------
Total 2,700,000 $1.76 150,000
--------------------------------------------------------------------------------
A description of the options and warrants issued without shareholder
approval is contained in Note 8 - Stockholder's Equity (deficit) - Stock Options
and Warrants - contained in our Notes to Consolidated Financial Statements that
were filed as a part of Item 7 of our 10-KSB that was previously filed.
Item 12. Certain Relationships and Related Transactions.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
AND CERTAIN BUSINESS RELATIONSHIPS
Stock Redemption Agreement between us, the Anderson Family Trust, Cantara
Communications Corporation, and Kevin E. Anderson Consulting, Inc.
On December 7, 2001, we closed a transaction in which we purchased, or
redeemed, 2,712,500 shares of our common stock from the Anderson Family Trust.
The Anderson Family Trust delivered shares from those owned by Cognigen
Corporation, a company 98.9 % owned by the Anderson Family Trust, to satisfy its
obligation pursuant to the transaction. Kevin E. Anderson and members of his
family are the beneficiaries of the Anderson Family Trust. Kevin E. Anderson may
be deemed to beneficially own the shares of our common stock owned by the
Anderson Family Trust.
As consideration for the share purchase, among other consideration, we
transferred to Cantara Communications Corporation, an affiliate of Kevin E.
Anderson, the rights to become the up-line for our current accounts and thereby
be entitled to commissions, fees and bonuses on our current customer accounts,
with a commission not to exceed 12% which commission was limited by various caps
through December 31, 2002. The amount of commissions, fees and bonuses that
Cantara Communications Corporation is entitled to is totally dependent upon the
commissions that we generate from new and repeat sales of services and products.
In addition, as a part of the transaction, our agreement with Kevin E. Anderson
Consulting, Inc., pursuant to which we paid Kevin E. Anderson Consulting, Inc.
consulting fees of $14,583 per month, was cancelled and Kevin E. Anderson was
retained through March 31, 2003 at the rate of $1,000.00 per month to provide up
to 20 hours telecommuting consulting services to us per month. Also, under a
separate consulting agreement we have paid and will pay Kevin E. Anderson
Consulting, Inc, an additional amount for expanded consulting and
technical/administrative services. For the years ended June 30, 2004 and June
30, 2003 we paid Cantara Communications Corporation $526,644 and $535,402 in
commissions, respectively, and paid Kevin E. Anderson Consulting Inc. $48,000
and $70,000, respectively. For the years ended June 30, 2004 and June 30, 2003,
we also paid members of Kevin E. Anderson's family $50,164 and $43,703 in agent
commissions, respectively.
Transactions with Stanford Venture Capital Holdings, Inc and Stanford Financial
Group Company, Inc.
On October 17, 2002 we issued 500,000 shares of 8% Convertible Series A
Preferred Stock (Preferred Stock) to Stanford Venture Capital Holdings, Inc. for
$500,000. Each share of the Preferred Stock is convertible, at the option of the
holder, into one share of our common stock for a period of five years. At that
time, the Preferred Stock is automatically converted to common stock. The
Preferred Stock does not have voting rights and has a liquidation preference of
$1.00 per share. In conjunction with the issuance of the Preferred Stock, we
paid $30,000 in cash and issued 64,516 shares of our common stock, valued at
$20,000, to a third-party consultant as a finder's fee.
Dividends on the Preferred Stock are cumulative at the rate of 8% per annum
of the liquidation value, $1.00 per share, are payable in cash, when and if
declared by the Board of Directors, and are preferential to any other junior
securities, as defined. We have accrued dividends of $10,000 per quarter on the
Preferred Stock.
As part of the agreement dated October 17, 2002, discussed above, Stanford
Financial Group Company, Inc. agreed to transfer to us an approximate 32%
interest in Miami based American Communications, a private company, in exchange
for 400,000 shares of our common stock, two-year warrants to purchase 150,000
shares of our common stock at an exercise price of $.50 per share and five-year
warrants to purchase 350,000 shares of our common stock at an exercise price of
$.75 per share. This transaction was completed on February 5, 2003, and the
warrants were issued. Of the warrants to purchase 150,000 shares, warrants to
purchase 75,000 shares were issued to principals of Stanford Financial Group
Company, Inc. Of the warrants to purchase 400,000 shares, warrants to purchase
175,000 shares were issue to principals of Stanford Financial Group Company,
Inc. The two-year warrants to purchase 150,000 shares expired unexercised in
October 2004.
On February 3, 2003, we entered into a letter of intent with David Stone
and Harry Gorlovezky, members of American Communications, pursuant to which
Messrs. Stone and Gorlovezky indicated their intent to purchase the approximate
32% interest in American Communications that we acquired from Stanford Financial
Group, Inc. for a cash consideration of $22,500. In addition, Messrs. Stone and
Gorlovezky had the right, until June 10, 2003, to purchase the $300,000
Promissory Note and Agreement due in October 2004 for a purchase price of
$77,500 in cash. The $22,500 was received and the 32% interest in American
Communications was delivered to Messrs. Stone and Gorlovezky. The option to
purchase the $300,000 Promissory Note and Agreement was not exercised and we
agreed to accept $100,000 plus $2,000 in attorney's fees for full satisfaction
of the Promissory Note if paid by July 2004. All but $20,000 was paid by the due
date which put the settlement agreement in default and the $80,000 received was
applied to interest on the original note and the remaining balance of
approximately $320,000 remains due and in default. We have filed a lawsuit
against American Communications and the two guarantors of the note to attempt to
collect the remaining balance due.
Transaction with Intandem Communications Corp.
On April 1, 2003, we, and InTandem Communications Corp. ("Intandem"), David
B. Hurwitz ("Hurwitz"), Richard G. De Haven ("De Haven") and Anthony T. Sgroi
("Sgroi") entered into an agreement ("Funding Agreement") pursuant to which we
agreed to provide up to $448,093 in a series of loans over a period of nine
months to InTandem.
As of June 30, 2004, we had made advances of $454,149 to Intandem
Communications Corp. (Intandem). On April 1, 2003, we and certain principals of
Intandem entered into an agreement (Funding Agreement) pursuant to which we
agreed to provide up to $448,093 in a series of loans to Intandem. Effective
February 1, 2004, by mutual agreement of the principals of Intandem and us, the
Funding Agreement was terminated and a separate agreement, the Termination of
Funding Agreement and Settlement Agreement (Termination Agreement), was entered
into.
The Termination Agreement provided that we would convert the notes
receivable of the $387,399 into 100% of the outstanding stock of Intandem in
exchange for payments of $10,000 per month for eight months, assumption of up to
approximately $45,000 in liabilities, cancellation of all employment contracts
of the Intandem principals, and cancellation of options to purchase our common
stock. As of the date of the Termination Agreement, $414,149 had been funded
under the Funding Agreement. Due to questions of recoverability of this amount
and the remaining commitments under the Termination Agreement, a provision of
$494,149 has been taken in the statement of operations. This provision
represents the $414,149 funding through the date of the Termination Agreement
plus an estimate of remaining commitments under the Termination Agreement, which
approximated $80,000 at the time. Approximately $60,000 remains in accrued
liabilities as of June 30, 2004, related to estimated future expenses relating
to the Termination Agreement.
Consulting Arrangements with Combined Telecommunications Consultancy, Ltd. and
Commission Payments to Telkiosk, Inc.
We also have an agreement with Combined Telecommunications Consultancy,
Ltd. (CTC), of which slightly less than 35% is owned by Peter Tilyou, pursuant
to which CTC is to receive a percentage of a transaction if CTC introduces a
transaction to us and is paid a consulting fee of $150 per hour for providing
consulting services to us. During the fiscal years ending June 30, 2004 and June
30, 2003, we paid CTC $64,722 and $19,981 respectively, in consulting fees and
$19,337 and $ -0- ,respectively, in transaction fees. The foregoing amounts
include up to $5,000 that we reimbursed CTC for expenses CTC incurred in
performing services on our behalf.
In conjunction with the transaction with InTandem, CTC was to be paid,
under its consulting agreement with us, a commission that was being negotiated
with us. In October 2004, we agreed with CTC that $20,000 of a combination of
stock and cash was owed by us to CTC in connection with the Intandem
transaction. However, because we bought Intandem, CTC agreed to waive this
commission.
Peter Tilyou also owns Telkiosk, Inc., which was paid $1,244 and $840 in
agent commissions for our fiscal years ended June 30, 2004 and June 30, 2003,
respectively.
Sale of Cognigen Switching Technologies, Inc.
On May 12, 2004, after approval by the Board of Directors, we entered into
a Stock for Stock Exchange Agreement with Jimmy L. Boswell, David G. Lucas,
Reginald W. Einkauf and John D. Miller (collectively the Principals) pursuant to
which the Principals agreed to exchange with us a total of 800,000 shares of our
common stock, owned by the Principals, for all of the outstanding common stock
of our wholly-owned subsidiary, Cognigen Switching Technologies, Inc. (CST), and
warrants to purchase 200,000 shares of our common stock at $.3015 per share
effective February 1, 2004. The closing occurred on May 21, 2004. At the closing
CST entered into a Master Services Agreement (MSA) to provide us with
telecommunications rating, billing, provisioning, customer care, commissioning
and database management for a fee. The MSA is effective February 1, 2004, and
goes for one-year periods unless terminated by either party at the end of each
period with a 30-day notice.
As part of the closing, CST entered into a new note with a then existing
lender representing approximately $223,000 in debt. All options to purchase our
common stock issued to CST employees were terminated except for the option to
purchase 200,000 shares of our common stock owned by Jimmy L. Boswell which
option expired in August 2004 and was exercisable at $3.68 per share.
At the time of the transaction, Jimmy L. Boswell was the president and a
director of CST. David G. Lucas was the former chief financial officer and a
director of CST. Reginald W. Einkauf and John D. Miller were former officers and
directors of CST. Mr. Boswell and Mr. Lucas are former officers and directors of
ours. We originally acquired CST in April 2000 when the Principals and another
person sold all of the outstanding stock of CST to us for our common stock.
In conjunction with the Stock for Stock Exchange Agreement, goodwill with a
net book value of $2,893,029 has been written off. With consideration of
approximately $26,000, calculated using the Black Scholes method of calculation
for the 200,000 warrants, goodwill of $2,893,029 and $168,448 in negative equity
that was assumed by the Principals, and the 800,000 shares of our common stock
that were repurchased from the Principals valued at $.31 per share or $248,000,
we recorded a non cash loss of $2,502,583 on this transaction that is included
in our statement of operations for the year ended June 30, 2004.
Payments to Law Firms with which Thomas S. Smith was Associated
During our fiscal years ended June 30, 2004 and 2003, we paid the law firms
with which Thomas S. Smith, our President and Chief Executive Officer, was
associated $116,968 and $257,987, respectively, for legal services performed by
those firms for us.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Dated: November 29, 2004
COGNIGEN NETWORKS, INC.
/s/ Thomas S. Smith
------------------------------------
Thomas S. Smith, President and Chief Operating Officer
/s/ Gary L. Cook
------------------------------
Gary L. Cook, Senior Vice President of Finance,
Secretary, Treasurer, Chief Financial Officer and
Principal Accounting Officer
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
/s/ Gary L. Cook Director November 29, 2004
------------------------
Gary L. Cook
Director
------------------------------
David L. Jackson
/s/ Christopher R. Seelbach Director November 29, 2004
------------------------------
Christopher R. Seelbach
/s/ James H. Shapiro Director November 29, 2004
------------------------------
James H. Shapiro
/s/ Thomas S. Smith Director November 29, 2004
------------------------------
Thomas S. Smith
Dates Referenced Herein and Documents Incorporated By Reference
Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)
Copyright © 2010 Fran Finnegan & Company. All Rights Reserved.
About – Privacy – Redactions – Help —
Sat, 20 Mar 22:34:04.0 GMT 
