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<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>UNITED
STATES </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>SECURITIES
AND EXCHANGE COMMISSION </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">WASHINGTON,
DC 20549 </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>FORM
8-K </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>CURRENT
REPORT </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>PURSUANT
TO SECTION 13 OR 15(D) OF THE </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SECURITIES
EXCHANGE ACT OF 1934 </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date of
Report (Date of earliest event reported): March 24, 2005 </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>INNCARDIO,
INC. </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
Name of Registrant as Specified in Charter) </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><BR>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD width="33.33%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center>&nbsp;<FONT size=2>Utah </FONT></DIV></TD>
    <TD width="33.33%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center>&nbsp;<FONT size=2>000-28727 </FONT></DIV></TD>
    <TD width="33.33%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center>&nbsp;<FONT size=2>87-06254752</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD width="33.33%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center><FONT size=2>(State or Other Jurisdiction <FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
      Incorporation)</FONT></FONT></DIV></TD>
    <TD width="33.33%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center>&nbsp;<FONT size=2>(Commission File Number)</FONT></DIV></TD>
    <TD width="33.33%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center>&nbsp;<FONT size=2>(IRS Employer Identification
      No.)</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD width="33.33%">&nbsp;</TD>
    <TD width="33.33%">&nbsp;</TD>
    <TD width="33.33%">&nbsp;</TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">712 Fifth
Avenue, 19th Floor, New York, NY 10019 </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
of principal Executive Offices) (Zip Code) </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant's
telephone number, including area code: (646) 723 8940 </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Formerly
Softwall Equipment Corporation, 378 North Main, #124, Layton, Utah 84041: (801)
497-9075 </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
Name or Former Address, if Changed Since Last Report) </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below): </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[_]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=center align=left width="81%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[_]
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
      CFR</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      240.14a-12)</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[_]
      Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[_]
      Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION 1
- REGISTRANT'S BUSINESS AND OPERATIONS </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a) On
March 24, 2005, the Registrant entered into an Agreement and Plan of Merger (the
&#8220;Agreement and Plan of Merger&#8221;) among the Registrant, Cengent Acquisition Corp.
(&#8220;CAC&#8221;), a wholly-owned subsidiary of the Registrant, and Cengent Therapeutics
Inc. (&#8220;Cengent&#8221;), a privately held company. Pursuant to the Merger Agreement,
CAC will merge with and into Cengent, and as a consequence of the merger (the
&#8220;Merger&#8221;) Cengent will become a wholly owned subsidiary of the Registrant. The
Merger is expected to be consummated in the Fall of 2005. The Agreement and Plan
of Merger is filed as Exhibit 10.1 to this Current Report on Form
8-K.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
for certain "Excluded Shares", as defined below, upon the conclusion of the
Merger, on a fully diluted basis, and subject to certain other adjustments
described below, the Registrant's shareholders who were shareholders of the
Registrant immediately prior to the Merger will own approximately fifty-five
percent (55%), and the then former Cengent securities holders, in the aggregate,
will own approximately forty-five percent (45%), of the common stock, par value
$0.001 per share (the "Common Stock") of the Registrant. The aggregate number of
shares to be owned by the then former Cengent securities holders upon the
conclusion of the Merger is sometimes referred to in the Agreement and Plan of
Merger as the &#8220;Aggregate Merger Consideration&#8221;.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">"Excluded
Shares" include any shares of Common Stock that may be issued upon exercise,
exchange or conversion of either (i) securities sold in a "Qualified Financing"
between March 24, 2005 and the effective time of the Merger (the &#8220;Effective
Time&#8221;) or (ii) issued or issuable to Bioaccelerate Holdings, Inc., of which the
Registrant is an indirect subsidiary, in connection with a certain convertible
credit line facility in favor of Cengent (the &#8220;Convertible Credit Line
Facility&#8221;) or a certain secured credit line facility in favor of the Registrant
(the &#8220;Secured Credit Line Facility&#8221;). The Excluded Shares will be excluded from
the calculation of aggregate share ownership percentages upon conclusion of the
Merger for the Registrant's shareholders and the then former Cengent securities
holders set forth in the preceding paragraph. As used in the Agreement and Plan
of Merger, the term "Qualified Financing" means an equity financing by the
Registrant of at least $20,000,000, exclusive of any amount of the Secured
Credit Line Facility then outstanding which may be converted into that
financing.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition, the following shares of the Registrant&#8217;s Common Stock (the &#8220;Employee
Retention Shares&#8221;), which the Registrant has undertaken to issue to certain
officers and directors of Cengent on or after the Effective Time of the Merger
pursuant to certain employee retention agreements with those officers and
directors, shall be deducted from the amount of shares otherwise issuable to the
former Cengent securities holders, in the aggregate, pursuant to the Agreement
and Plan of Merger: (1) at least 194,545 shares, and (at the option of the Board
of Directors of Cengent) up to 100,000 additional shares, to be issued to Dr. J.
Gordon Foulkes, the President of Cengent; (2) 95,273 shares, to be issued to
Brian Baker, the Chief Financial Officer of Cengent; (3) 23,636 shares, to be
issued to Edward O. Lanphier, II, the Chairman of the Board of Directors of
Cengent; and (4) 48,636 shares, to be issued to Dr. Kalyanaraman Ramnarayan, the
Chief Scientific Officer of Cengent.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
number of shares of the Registrant&#8217;s Common Stock which is the quotient obtained
by dividing all of the following cash payments by 3.00 also shall be deducted
from the amount of shares otherwise issuable to the former Cengent securities
holders, in the aggregate, pursuant to the Agreement and Plan of Merger. The
following amounts will be paid in cash at the Effective Time to those
individuals pursuant to those employee retention agreements: $100,000 to Dr.
Foulkes, $52,000 to Mr. Baker, $50,000 to Mr. Lanphier, and $25,000 to Dr.
Ramnarayan. In addition, the sum of $350,000 is to be paid at the Effective Time
to P2 Partners, LLC, for certain advisory services furnished to Cengent in
connection with the sale of the Company. P2 Partners, LLC is also to receive in
compensation for those services additional cash compensation equal to 2% of the
consideration paid for Cengent in the Merger (less the initial $350,000
payment), with Cengent being valued at the lesser of (i) the price per share of
the Registrant&#8217;s Common Stock in the Qualified Financing (or an equity financing
of the Registrant of at least $15,000,000) or (ii) $3.00 per share. The
additional cash payment to P2 Partners shall be due (i) at the Effective Time,
if either the Qualified Financing or the equity financing of at least
$15,000,000 by the Registrant occurs on or after the date of the Agreement and
Plan of Merger but on or before the Effective Time, or (ii) if not, then at the
earliest to occur after the Effective Time of (x) the Qualified Financing and
(y) an equity financing by the Registrant of at least $15,000,000. The shares of
common stock to be issued to Messrs. Foulkes, Baker, Lanphier and Ramnarayan as
described in the preceding paragraph will also be issued at the time of the
second payment to P2 Partners, LLC.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition, there shall be deducted from the amount of shares otherwise issuable
to the former Cengent securities holders, in the aggregate, pursuant to the
Agreement and Plan of Merger, that number of shares of the Registrant&#8217;s Common
Stock which is the quotient obtained by dividing by 3.00 certain additional
expenses (the &#8220;Additional Expenses&#8221;) to the extent not already described above.
The Additional Expenses include the following: the sum of fees, costs and
expenses (including, without limitation, legal, accountant and other
professional fees and expenses) incurred and unpaid (or paid directly or
indirectly through utilization of credit furnished directly or indirectly by
Bioaccelerate Holdings, Inc.) by Cengent (or paid by the Registrant on or after
the Effective Time) or paid or to be paid in cash in connection with the
negotiation, execution and consummation of the Merger, the Agreement and Plan of
Merger, and the transactions, agreements, instruments and documents contemplated
thereby, as well as any portion of any and all broker fees and commissions paid
or to be paid in cash at the Effective Time, fees and expenses for the tail
insurance policy in favor of Cengent&#8217;s officers and directors to be acquired by
Cengent pursuant to the Agreement and Plan of Merger, and any other fees and
expenses of Cengent to be paid at or in connection with the Effective Time of
the Merger.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon the
effectiveness of the Merger, each outstanding share of Cengent&#8217;s common and
preferred stock shall be cancelled automatically and converted into shares of
the Registrant's Common Stock in accordance with the terms and conditions of the
Agreement and Plan of Merger. Each outstanding option or warrant for securities
of Cengent shall automatically be converted into an instrument to receive, upon
exercise, shares of the Registrant&#8217;s Common Stock in accordance with the terms
and conditions of the Agreement and Plan of Merger. In addition, each
outstanding senior secured convertible promissory note of Cengent shall be
cancelled automatically and shall be converted into the right to receive that
number of shares of the Registrant&#8217;s Common Stock which shall be equal to (a)
the sum of (i) the outstanding principal amount and any accrued but unpaid
interest on such secured convertible promissory note and (ii) one hundred fifty
percent (150%) of the outstanding principal amount of such convertible
promissory note, divided by (b) the lesser of (1) $3.00 per share or (2) the
price per share used in the Qualified Financing, or in the event the Qualified
Financing does not occur on or before the date that is six (6) months after the
Effective Time, the weighted average closing price per share of the Registrant&#8217;s
Common Stock over the twenty (20) trading day period ending three (3) days prior
to the date that is six (6) months after the Effective Time; provided, that in
no event shall such number of shares be greater than the number of shares of the
Registrant&#8217;s Common Stock included in the Aggregate Merger Consideration; and
provided, further, that in the event that the aggregate merger consideration to
be issued to the holders of Cengent&#8217;s secured convertible promissory notes
should exceed ninety percent (90%) of the Aggregate Merger Consideration, then
the aggregate consideration to be issued to the holders of Cengent&#8217;s secured
convertible promissory notes shall be adjusted to such lower amount as shall
equal ninety percent (90%) of the Aggregate Merger Consideration. The shares of
Common Stock issued or reserved for issuance at the closing of the Merger are
sometimes referred to as the "Merger Shares."</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Cengent securities holders (other than the holders of the secured convertible
promissory notes) are entitled, under the Agreement and Plan of Merger, to
receive various portions of the &#8220;Residual Merger Consideration&#8221;, which is the
Aggregate Merger Consideration less the merger consideration paid to the holders
of Cengent&#8217;s secured convertible promissory notes. The amount of Merger Shares
to be received by each Cengent securities holder can not be calculated at this
time because the amount of merger consideration to be paid to the holders of
Cengent&#8217;s secured convertible promissory notes will be determined pursuant to
the formula, described in the preceding paragraph, whose application depends
upon events which have not yet occurred and which may not occur prior to the
closing.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In the
event that the Qualified Financing does not occur prior to the Effective Time,
the Registrant shall cause the Aggregate Merger Consideration to be delivered in
escrow to an escrow agent designated by Cengent pursuant to an escrow agreement
to be entered into by and among Cengent, the escrow agent and a representative
of Cengent&#8217;s securities holders. As soon as practicable after the earlier of the
closing of the Qualified Financing or the date that is six (6) months after the
Effective Time, the escrow agent shall determine the amount of the Aggregate
Merger Consideration due to the holders of Cengent&#8217;s secured convertible
promissory notes and shall determine the amounts of Merger Shares due to the
other holders of the Company&#8217;s securities. As soon as practicable after the
closing of the Qualified Financing or the date that is six (6) months after the
Effective Time, the escrow agent shall provide to the Registrant&#8217;s transfer
agent any certificate held by the escrow agent representing the Aggregate Merger
Consideration and the information required for the transfer agent to issue
transmittal letters to Cengent&#8217;s former securities holders and commence the
process of exchanging certificates evidencing the Aggregate Merger Consideration
for certificates evidencing Cengent&#8217;s securities. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">However,
it is certain that Cengent securities holders have the right to receive the
following portions of whatever is determined to constitute the Residual Merger
Consideration, on a pro rata basis with all other outstanding shares of the same
class of Cengent securities:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Security</U></FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Percentage
of Residual Merger Consideration*</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series A
Preferred Stock</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.40%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series B
Preferred Stock</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.30%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series C
Preferred Stock</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.49%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series D
Preferred Stock</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;&nbsp; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32.79%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series F
Preferred Stock</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.94%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series G
Preferred Stock</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15.08%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series H
Preferred Stock</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
25.00%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series E
Preferred Stock and Common Stock, as one group</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
10.00%</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">* The
shares underlying outstanding Cengent options and warrants shall be deemed to be
outstanding for purposes of calculating the foregoing percentages and merger
consideration shall be allocated for those options and warrants out of the
merger consideration for the applicable underlying security.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Merger is subject to approval by the shareholders of Cengent, to the
satisfaction of customary terms and conditions, and to the truth and correctness
of customary representations and warranties of the parties to the Agreement and
Plan of Merger. However, Cengent has covenanted to deliver, within 25 days,
voting agreements by officers, directors and other shareholders of Cengent who
own the requisite majorities of each applicable class of Cengent&#8217;s securities to
vote to approve the Merger. Cengent has covenanted to call a meeting of its
shareholders for the purpose of approving the Merger within thirty (30) days
following the date upon which the Registrant&#8217;s Registration Statement on Form
S-4 to cover the shares of the Registrant&#8217;s Common Stock to be issued or
reserved for issuance to Cengent securities holders in the Merger is declared
effective by the U.S. Securities and Exchange Commission. The Registration
Statement is being prepared and has not yet been filed by the
Registrant.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
the Registration Statement on Form S-4, pursuant to the Agreement and Plan of
Merger, all Merger Shares to be issued to each Cengent holder who will receive
more than 1,000 shares of the Registrant&#8217;s Common Stock in the Merger will be
subject to a lock-up period after the Effective Time (the &#8220;Lock-Up Period&#8221;), and
each certificate representing shares subject to the Lock-Up Period shall bear
the appropriate restrictive legend. In no event, however, shall more than
100,000 shares of the Registrant&#8217;s Common Stock be excluded from the Lock-Up
Period at the Effective Time without the Registrant&#8217;s prior written consent. If
the Registrant has consummated a Qualified Financing on or prior to the
Effective Time, the Lock-Up Period, during which the transfer of Merger Shares
shall be prohibited, shall be for a period of the greater of six (6) months
after the consummation of the Qualified Financing or six (6) months after the
Effective Time. If the Registrant has not consummated a Qualified Financing on
or prior to the Effective Time, the Lock-Up Period shall be for a period of the
lesser of (i) the time period of the Lock-Up Period required by a placement
agent or underwriter in connection with the Qualified Financing or twelve (12)
months after the Effective Time. Notwithstanding the foregoing, if any of the
Registrant&#8217;s officers or directors, Bioaccelerate Holdings, Inc., or any holder
of 5% or more of the shares of the Registrant who executes and delivers a
lock-up agreement pursuant to the Agreement and Plan of Merger is released by
the Registrant and by the placement agent or underwriter in connection with the
Qualified Financing from the corresponding lock-up during the Lock-Up Period,
the lock-up shall terminate at the same time as to the Cengent securities
holders who were subjected to the Lock-Up Period with respect to their Merger
Shares. The Agreement and Plan of Merger also provides that the Employee
Retention Shares shall be subject to the lock-up for the Lock-Up Period unless
otherwise released by the Registrant.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notwithstanding
the Registrant's agreements, there can be no assurance that the Registrant will
ever file any such registration statement and, even if so, that any such
registration statement will ever become effective, or that once effective, such
effectiveness will be maintained. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the Agreement and Plan of Merger, at the Effective Time, if it has not
already done so, the Registrant shall take such actions as are necessary to
cause the number of directors comprising the Registrant&#8217;s Board of Directors to
be increased to seven (7) directors, effective as of the Effective Time. At the
Effective Time, the Board of Directors of the Registrant shall consist of seven
(7) directors, of whom three (3) shall be individuals designated in writing by
Cengent sufficiently in advance of the Effective Time for the Registrant to
furnish appropriate disclosures concerning such persons in required filings and
notices, and four (4) of whom shall be individuals designated by the Registrant,
one of whom shall be the Registrant&#8217;s Chief Executive Officer and Chairman at
the Effective Time.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
description contained in this Item 1.01 of the terms and conditions of the
Agreement and Plan of Merger is qualified in its entirety by reference to the
full text of the Agreement and Plan of Merger, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
execution of the Agreement and Plan of Merger, the Registrant, Bioaccelerate
Holdings, Inc., a corporation of which the Registrant is an indirect subsidiary,
and Cengent executed and delivered a credit line facility agreement dated March
24, 2005 (the &#8220;Credit Line Facility Agreement&#8221;) in favor of Cengent whereby
Bioaccelerate Holdings, Inc. made a $500,000 working capital advance to Cengent.
Pursuant to the Credit Line Facility Agreement, Bioaccelerate Holdings, Inc.
agreed to make an additional $500,000 working capital advance to Cengent every
30 days thereafter until the Merger is consummated or the Agreement and Plan of
Merger is terminated other than due to a breach by Bioaccelerate Holdings, Inc.
of its obligation to deliver a working capital advance to Cengent. Bioaccelerate
Holdings, Inc. will receive certain warrants for Cengent securities upon making
each advance and will have the benefit of the security interest and preferential
liquidation and debt repayment premium rights enjoyed by Cengent&#8217;s secured
convertible note holders, pro rata with those holders as their respective
interests appear. However, if the Merger is consummated, the Cengent warrants
issued to Bioaccelerate Holdings, Inc. will terminate, as will Bioaccelerate
Holdings, Inc.&#8217;s right to participate in the preferential liquidation and debt
repayment premium rights of Cengent&#8217;s secured convertible promissory note
holders, and the principal and interest on the working capital advances by
Bioaccelerate Holdings, Inc. will be rolled over into, and credited as advances
under, the secured credit facility which Bioaccelerate Holdings, Inc. has
furnished in favor of the Registrant, except as the parties shall otherwise
arrange. In the event that the Agreement and Plan of Merger is terminated due to
breach by Bioaccelerate Holdings, Inc. of its obligation to deliver a working
capital advance to Cengent pursuant to the Credit Line Facility Agreement,
Cengent will be entitled to retain the initial $500,000 working capital advance
furnished by Bioaccelerate Holdings, Inc. as liquidated damages and will have no
further claims with regard to that breach against Bioaccelerate Holdings, Inc.
The description contained in this Item 1.01 of the terms and conditions of the
Credit Line Facility Agreement is qualified in its entirety by reference to the
full text of the Credit Line Facility Agreement, which is filed as Exhibit 10.2
to this Current Report on Form 8-K. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
connection with the execution and delivery of the Agreement and Plan of Merger,
Bioaccelerate Holdings, Inc., of which the Registrant is an indirect subsidiary,
arranged for Bioaccelerate, Inc., of which the Registrant is a subsidiary, to
establish a secured credit line facility (the &#8220;Secured Credit Line Facility&#8221;) in
the amount of $12,000,000 in favor of the Registrant for the period of one year
following the Effective Time. Upon the Effective Time, any indebtedness owed to
Bioaccelerate Holdings, Inc. under the Secured Credit Line Facility Agreement
shall be rolled into and credited as advances under the Secured Credit Line
Facility, except as the parties shall otherwise arrange. The Registrant has
granted to Bioaccelerate, Inc. a first priority security interest in
substantially all of its assets to secure its obligations to make payments of
advances under the Secured Credit Line Facility. Advances under the Secured
Credit Line Facility shall be made by Bioaccelerate, Inc. to the Registrant as
required in respect of mutually agreed upon budgets and satisfaction of other
terms and conditions customary in loan agreements with senior lenders. Advances
under the Secured Credit Line Facility shall bear interest at the Applicable
Federal Rate, as defined in Section 1274(d) of the Internal Revenue Code of
1986, as amended, and shall be payable on the Maturity Date of the Secured
Credit Line Facility. The &#8220;Maturity Date&#8221; shall mean the earliest of (i) the
date on which any Placement (as that term is defined below) occurs,
(ii)&nbsp;the date on which an event of default under the Secured Credit Line
Facility occurs, or (iii)&nbsp; the date on which a Change in Control occurs.
&#8220;Change in Control&#8221; shall mean (a) a merger , consolidation or any other
combination of the Registrant (other than a merger, consolidation or combination
of a wholly-owned subsidiary of the Registrant or any other person or entity
with respect to which Bioaccelerate, Inc. has given its approval in writing)
with any entity or person, (b) the sale of all or substantially all of the
assets of the Registrant, or (c) the purchase by a single entity or group, as
defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, of
more than 25% of the voting stock of the Registrant in a single transaction or a
series of related transactions. A &#8220;Placement&#8221; shall mean the closing of either
debt or equity financing in which the Registrant receives at least Twenty
Million Dollars ($20,000,000) in gross proceeds in any transaction or series of
related transactions after the date of the Secured Credit Line Facility. The
description contained in this Item 1.01 of the terms and conditions of the
Secured Credit Line Facility is qualified in its entirety by reference to the
full text of the letter agreement dated March 9, 2005 which is filed as Exhibit
10.3 to this Current Report on Form 8-K, and the related promissory note dated
March 9, 2005, which is filed as Exhibit 10.4 to this Current Report on Form
8-K, and the related security agreement dated March 9, 2005, which is filed as
Exhibit 10.5 to this Current Report on Form 8-K. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION
2. FINANCIAL INFORMATION </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>ITEM
2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a) In
connection with the execution and delivery of the Agreement and Plan of Merger,
Bioaccelerate Holdings, Inc., of which the Registrant is an indirect subsidiary,
arranged for Bioaccelerate, Inc., of which the Registrant is a subsidiary, to
establish a secured credit line facility (the &#8220;Secured Credit Line Facility&#8221;) in
the amount of $12,000,000 in favor of the Registrant for the period of one year
following the Effective Time. Upon the Effective Time, any indebtedness owed to
Bioaccelerate Holdings, Inc. under the Credit Line Facility Agreement shall be
rolled into and credited as advances under the Secured Credit Line Facility,
except as the parties shall otherwise arrange. The Registrant has granted to
Bioaccelerate, Inc. a first priority security interest in substantially all of
its assets to secure its obligations to make payments of advances under the
Secured Credit Line Facility. Advances under the Secured Credit Line Facility
shall be made by Bioaccelerate, Inc. to the Registrant as required in respect of
mutually agreed upon budgets and satisfaction of other terms and conditions
customary in loan agreements with senior lenders. Advances under the Secured
Credit Line Facility shall bear interest at the Applicable Federal Rate, as
defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended, and
shall be payable on the Maturity Date of the Secured Credit Facility. The
&#8220;Maturity Date&#8221; shall mean the earliest of (i) the date on which any Placement
(as that term is defined below) occurs, (ii)&nbsp;the date on which an event of
default under the Secured Credit Line Facility occurs, or (iii)&nbsp; the date
on which a Change in Control occurs. &#8220;Change in Control&#8221; shall mean (a) a merger
, consolidation or any other combination of the Registrant (other than a merger,
consolidation or combination of a wholly-owned subsidiary of the Registrant or
any other person or entity with respect to which Bioaccelerate, Inc. has given
its approval in writing) with any entity or person, (b) the sale of all or
substantially all of the assets of the Registrant, or (c) the purchase by a
single entity or group, as defined in Section 13(d) of the Securities Exchange
Act of 1934, as amended, of more than 25% of the voting stock of the Registrant
in a single transaction or a series of related transactions. A &#8220;Placement&#8221; shall
mean the closing of either debt or equity financing in which the Registrant
receives at least Twenty Million Dollars ($20,000,000) in gross proceeds in any
transaction or series of related transactions after the date of the Secured
Credit Line Facility. The description contained in this Item 2.03 of the terms
and conditions of the Secured&nbsp;Credit Line Facility is qualified in its
entirety by reference to the full text of the letter agreement dated March 9,
2005 which is filed as Exhibit 10.3 to this Current Report on Form 8-K, and the
related promissory note dated March 9, 2005, which is filed as Exhibit 10.4 to
this Current Report on Form 8-K, and the related security agreement dated March
9, 2005, which is filed as Exhibit 10.5 to this Current Report on Form 8-K.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECTION 9
- FINANCIAL STATEMENTS AND EXHIBITS </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS. </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)
Exhibits. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following exhibits are filed with this report: </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1
Agreement and Plan of Merger dated March 24, 2005 by and among Inncardio, Inc.,
Cengent Acquisition Corp., and Cengent Therapeutics Inc. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2
Credit Line Facility Agreement dated March 24, 2005 by and among Bioaccelerate
Holdings, Inc., Inncardio, Inc., and Cengent Therapeutics Inc. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3
Commitment Letter dated March 9, 2005 for Secured Credit Line Facility by
Bioaccelerate, Inc. and Inncardio, Inc.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Senior
Secured Grid Note dated March 9, 2005 by Inncardio, Inc.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.5
Security Agreement dated March 9, 2005 by Bioaccelerate, Inc. and Inncardio,
Inc. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[Signature
on following page.] </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV></DIV>
<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SIGNATURES
</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>INNCARDIO,
INC. </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=center align=left width="63%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>By:
      /s/ Bernard Ross</EM></FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>---------------------------------</EM></FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Bernard
      Ross</EM></FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Chief
      Executive Officer</EM></FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Date:
      March 30, 2005</EM></FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV></DIV>
<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>EXHIBIT
INDEX </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=center align=left width="80%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
      Description</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-------
      -----------</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1
      </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Agreement
      and Plan of Merger dated March 24, 2005 (the "Agreement and Plan of
      Merger") by and among Inncardio, Inc., Cengent Acquisition Corp., and
      Cengent Therapeutics Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT size=2></FONT>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2
      </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Credit
      Line Facility Agreement dated March 24, 2005 (the &#8220;Credit Line Facility
      Agreement&#8221;) by and among Bioaccelerate Holdings, Inc., Inncardio, Inc.,
      and Cengent Therapeutics Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT size=2></FONT>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3
      </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Commitment
      Letter dated March 9, 2005 for Secured Credit Line Facility by
      Bioaccelerate, Inc. and Inncardio, Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4
      </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Senior
      Secured Grid Note dated March 9, 2005 by Inncardio, Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.5
      </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Security
      Agreement dated March 9, 2005 by Bioaccelerate, Inc. and Inncardio,
      Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=center align=left width="80%">&nbsp;</TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><BR></DIV>
<DIV><BR>&nbsp;</DIV></BODY></HTML>
{"company-data": {"conformed-name": "INNCARDIO, INC", "cik": "0001082562", "assigned-sic": "3721", "irs-number": "870624752", "state-of-incorporation": "UT", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-28727", "film-number": "05714833"}, "business-address": {"street1": "378 NORTH MAIN STREET", "street2": "SUITE 124", "city": "LAYTON", "state": "UT", "zip": "84041", "phone": "(801) 497-9075"}, "mail-address": {"street1": "378 NORTH MAIN STREET", "street2": "SUITE 124", "city": "LAYTON", "state": "UT", "zip": "84041"}, "former-company": {"former-conformed-name": "SOFTWALL EQUIPMENT CORP", "date-changed": "19991110"}}
Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): March 24, 2005
INNCARDIO,
INC.
(Exact
Name of Registrant as Specified in Charter)
Utah
000-28727
87-06254752
(State or Other Jurisdiction
of
      Incorporation)
(Commission File Number)
(IRS Employer Identification
      No.)
712 Fifth
Avenue, 19th Floor, New York, NY 10019
(Address
of principal Executive Offices) (Zip Code)
Registrant's
telephone number, including area code: (646) 723 8940
Formerly
Softwall Equipment Corporation, 378 North Main, #124, Layton, Utah 84041: (801)
497-9075
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[_]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[_]
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
      CFR
240.14a-12)
[_]
      Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))
[_]
      Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))
SECTION 1
- REGISTRANT'S BUSINESS AND OPERATIONS
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
(a) On
March 24, 2005, the Registrant entered into an Agreement and Plan of Merger (the
"Agreement and Plan of Merger") among the Registrant, Cengent Acquisition Corp.
("CAC"), a wholly-owned subsidiary of the Registrant, and Cengent Therapeutics
Inc. ("Cengent"), a privately held company. Pursuant to the Merger Agreement,
CAC will merge with and into Cengent, and as a consequence of the merger (the
"Merger") Cengent will become a wholly owned subsidiary of the Registrant. The
Merger is expected to be consummated in the Fall of 2005. The Agreement and Plan
of Merger is filed as Exhibit 10.1 to this Current Report on Form
8-K.
Except
for certain "Excluded Shares", as defined below, upon the conclusion of the
Merger, on a fully diluted basis, and subject to certain other adjustments
described below, the Registrant's shareholders who were shareholders of the
Registrant immediately prior to the Merger will own approximately fifty-five
percent (55%), and the then former Cengent securities holders, in the aggregate,
will own approximately forty-five percent (45%), of the common stock, par value
$0.001 per share (the "Common Stock") of the Registrant. The aggregate number of
shares to be owned by the then former Cengent securities holders upon the
conclusion of the Merger is sometimes referred to in the Agreement and Plan of
Merger as the "Aggregate Merger Consideration".
"Excluded
Shares" include any shares of Common Stock that may be issued upon exercise,
exchange or conversion of either (i) securities sold in a "Qualified Financing"
between March 24, 2005 and the effective time of the Merger (the "Effective
Time") or (ii) issued or issuable to Bioaccelerate Holdings, Inc., of which the
Registrant is an indirect subsidiary, in connection with a certain convertible
credit line facility in favor of Cengent (the "Convertible Credit Line
Facility") or a certain secured credit line facility in favor of the Registrant
(the "Secured Credit Line Facility"). The Excluded Shares will be excluded from
the calculation of aggregate share ownership percentages upon conclusion of the
Merger for the Registrant's shareholders and the then former Cengent securities
holders set forth in the preceding paragraph. As used in the Agreement and Plan
of Merger, the term "Qualified Financing" means an equity financing by the
Registrant of at least $20,000,000, exclusive of any amount of the Secured
Credit Line Facility then outstanding which may be converted into that
financing.
In
addition, the following shares of the Registrant's Common Stock (the "Employee
Retention Shares"), which the Registrant has undertaken to issue to certain
officers and directors of Cengent on or after the Effective Time of the Merger
pursuant to certain employee retention agreements with those officers and
directors, shall be deducted from the amount of shares otherwise issuable to the
former Cengent securities holders, in the aggregate, pursuant to the Agreement
and Plan of Merger: (1) at least 194,545 shares, and (at the option of the Board
of Directors of Cengent) up to 100,000 additional shares, to be issued to Dr. J.
Gordon Foulkes, the President of Cengent; (2) 95,273 shares, to be issued to
Brian Baker, the Chief Financial Officer of Cengent; (3) 23,636 shares, to be
issued to Edward O. Lanphier, II, the Chairman of the Board of Directors of
Cengent; and (4) 48,636 shares, to be issued to Dr. Kalyanaraman Ramnarayan, the
Chief Scientific Officer of Cengent.
The
number of shares of the Registrant's Common Stock which is the quotient obtained
by dividing all of the following cash payments by 3.00 also shall be deducted
from the amount of shares otherwise issuable to the former Cengent securities
holders, in the aggregate, pursuant to the Agreement and Plan of Merger. The
following amounts will be paid in cash at the Effective Time to those
individuals pursuant to those employee retention agreements: $100,000 to Dr.
Foulkes, $52,000 to Mr. Baker, $50,000 to Mr. Lanphier, and $25,000 to Dr.
Ramnarayan. In addition, the sum of $350,000 is to be paid at the Effective Time
to P2 Partners, LLC, for certain advisory services furnished to Cengent in
connection with the sale of the Company. P2 Partners, LLC is also to receive in
compensation for those services additional cash compensation equal to 2% of the
consideration paid for Cengent in the Merger (less the initial $350,000
payment), with Cengent being valued at the lesser of (i) the price per share of
the Registrant's Common Stock in the Qualified Financing (or an equity financing
of the Registrant of at least $15,000,000) or (ii) $3.00 per share. The
additional cash payment to P2 Partners shall be due (i) at the Effective Time,
if either the Qualified Financing or the equity financing of at least
$15,000,000 by the Registrant occurs on or after the date of the Agreement and
Plan of Merger but on or before the Effective Time, or (ii) if not, then at the
earliest to occur after the Effective Time of (x) the Qualified Financing and
(y) an equity financing by the Registrant of at least $15,000,000. The shares of
common stock to be issued to Messrs. Foulkes, Baker, Lanphier and Ramnarayan as
described in the preceding paragraph will also be issued at the time of the
second payment to P2 Partners, LLC.
In
addition, there shall be deducted from the amount of shares otherwise issuable
to the former Cengent securities holders, in the aggregate, pursuant to the
Agreement and Plan of Merger, that number of shares of the Registrant's Common
Stock which is the quotient obtained by dividing by 3.00 certain additional
expenses (the "Additional Expenses") to the extent not already described above.
The Additional Expenses include the following: the sum of fees, costs and
expenses (including, without limitation, legal, accountant and other
professional fees and expenses) incurred and unpaid (or paid directly or
indirectly through utilization of credit furnished directly or indirectly by
Bioaccelerate Holdings, Inc.) by Cengent (or paid by the Registrant on or after
the Effective Time) or paid or to be paid in cash in connection with the
negotiation, execution and consummation of the Merger, the Agreement and Plan of
Merger, and the transactions, agreements, instruments and documents contemplated
thereby, as well as any portion of any and all broker fees and commissions paid
or to be paid in cash at the Effective Time, fees and expenses for the tail
insurance policy in favor of Cengent's officers and directors to be acquired by
Cengent pursuant to the Agreement and Plan of Merger, and any other fees and
expenses of Cengent to be paid at or in connection with the Effective Time of
the Merger.
Upon the
effectiveness of the Merger, each outstanding share of Cengent's common and
preferred stock shall be cancelled automatically and converted into shares of
the Registrant's Common Stock in accordance with the terms and conditions of the
Agreement and Plan of Merger. Each outstanding option or warrant for securities
of Cengent shall automatically be converted into an instrument to receive, upon
exercise, shares of the Registrant's Common Stock in accordance with the terms
and conditions of the Agreement and Plan of Merger. In addition, each
outstanding senior secured convertible promissory note of Cengent shall be
cancelled automatically and shall be converted into the right to receive that
number of shares of the Registrant's Common Stock which shall be equal to (a)
the sum of (i) the outstanding principal amount and any accrued but unpaid
interest on such secured convertible promissory note and (ii) one hundred fifty
percent (150%) of the outstanding principal amount of such convertible
promissory note, divided by (b) the lesser of (1) $3.00 per share or (2) the
price per share used in the Qualified Financing, or in the event the Qualified
Financing does not occur on or before the date that is six (6) months after the
Effective Time, the weighted average closing price per share of the Registrant's
Common Stock over the twenty (20) trading day period ending three (3) days prior
to the date that is six (6) months after the Effective Time; provided, that in
no event shall such number of shares be greater than the number of shares of the
Registrant's Common Stock included in the Aggregate Merger Consideration; and
provided, further, that in the event that the aggregate merger consideration to
be issued to the holders of Cengent's secured convertible promissory notes
should exceed ninety percent (90%) of the Aggregate Merger Consideration, then
the aggregate consideration to be issued to the holders of Cengent's secured
convertible promissory notes shall be adjusted to such lower amount as shall
equal ninety percent (90%) of the Aggregate Merger Consideration. The shares of
Common Stock issued or reserved for issuance at the closing of the Merger are
sometimes referred to as the "Merger Shares."
The
Cengent securities holders (other than the holders of the secured convertible
promissory notes) are entitled, under the Agreement and Plan of Merger, to
receive various portions of the "Residual Merger Consideration", which is the
Aggregate Merger Consideration less the merger consideration paid to the holders
of Cengent's secured convertible promissory notes. The amount of Merger Shares
to be received by each Cengent securities holder can not be calculated at this
time because the amount of merger consideration to be paid to the holders of
Cengent's secured convertible promissory notes will be determined pursuant to
the formula, described in the preceding paragraph, whose application depends
upon events which have not yet occurred and which may not occur prior to the
closing.
In the
event that the Qualified Financing does not occur prior to the Effective Time,
the Registrant shall cause the Aggregate Merger Consideration to be delivered in
escrow to an escrow agent designated by Cengent pursuant to an escrow agreement
to be entered into by and among Cengent, the escrow agent and a representative
of Cengent's securities holders. As soon as practicable after the earlier of the
closing of the Qualified Financing or the date that is six (6) months after the
Effective Time, the escrow agent shall determine the amount of the Aggregate
Merger Consideration due to the holders of Cengent's secured convertible
promissory notes and shall determine the amounts of Merger Shares due to the
other holders of the Company's securities. As soon as practicable after the
closing of the Qualified Financing or the date that is six (6) months after the
Effective Time, the escrow agent shall provide to the Registrant's transfer
agent any certificate held by the escrow agent representing the Aggregate Merger
Consideration and the information required for the transfer agent to issue
transmittal letters to Cengent's former securities holders and commence the
process of exchanging certificates evidencing the Aggregate Merger Consideration
for certificates evidencing Cengent's securities.
However,
it is certain that Cengent securities holders have the right to receive the
following portions of whatever is determined to constitute the Residual Merger
Consideration, on a pro rata basis with all other outstanding shares of the same
class of Cengent securities:
Security
Percentage
of Residual Merger Consideration*
Series A
Preferred Stock
2.40%
Series B
Preferred Stock
5.30%
Series C
Preferred Stock
5.49%
Series D
Preferred Stock
32.79%
Series F
Preferred Stock
3.94%
Series G
Preferred Stock
15.08%
Series H
Preferred Stock
25.00%
Series E
Preferred Stock and Common Stock, as one group
10.00%
* The
shares underlying outstanding Cengent options and warrants shall be deemed to be
outstanding for purposes of calculating the foregoing percentages and merger
consideration shall be allocated for those options and warrants out of the
merger consideration for the applicable underlying security.
The
Merger is subject to approval by the shareholders of Cengent, to the
satisfaction of customary terms and conditions, and to the truth and correctness
of customary representations and warranties of the parties to the Agreement and
Plan of Merger. However, Cengent has covenanted to deliver, within 25 days,
voting agreements by officers, directors and other shareholders of Cengent who
own the requisite majorities of each applicable class of Cengent's securities to
vote to approve the Merger. Cengent has covenanted to call a meeting of its
shareholders for the purpose of approving the Merger within thirty (30) days
following the date upon which the Registrant's Registration Statement on Form
S-4 to cover the shares of the Registrant's Common Stock to be issued or
reserved for issuance to Cengent securities holders in the Merger is declared
effective by the U.S. Securities and Exchange Commission. The Registration
Statement is being prepared and has not yet been filed by the
Registrant.
Notwithstanding
the Registration Statement on Form S-4, pursuant to the Agreement and Plan of
Merger, all Merger Shares to be issued to each Cengent holder who will receive
more than 1,000 shares of the Registrant's Common Stock in the Merger will be
subject to a lock-up period after the Effective Time (the "Lock-Up Period"), and
each certificate representing shares subject to the Lock-Up Period shall bear
the appropriate restrictive legend. In no event, however, shall more than
100,000 shares of the Registrant's Common Stock be excluded from the Lock-Up
Period at the Effective Time without the Registrant's prior written consent. If
the Registrant has consummated a Qualified Financing on or prior to the
Effective Time, the Lock-Up Period, during which the transfer of Merger Shares
shall be prohibited, shall be for a period of the greater of six (6) months
after the consummation of the Qualified Financing or six (6) months after the
Effective Time. If the Registrant has not consummated a Qualified Financing on
or prior to the Effective Time, the Lock-Up Period shall be for a period of the
lesser of (i) the time period of the Lock-Up Period required by a placement
agent or underwriter in connection with the Qualified Financing or twelve (12)
months after the Effective Time. Notwithstanding the foregoing, if any of the
Registrant's officers or directors, Bioaccelerate Holdings, Inc., or any holder
of 5% or more of the shares of the Registrant who executes and delivers a
lock-up agreement pursuant to the Agreement and Plan of Merger is released by
the Registrant and by the placement agent or underwriter in connection with the
Qualified Financing from the corresponding lock-up during the Lock-Up Period,
the lock-up shall terminate at the same time as to the Cengent securities
holders who were subjected to the Lock-Up Period with respect to their Merger
Shares. The Agreement and Plan of Merger also provides that the Employee
Retention Shares shall be subject to the lock-up for the Lock-Up Period unless
otherwise released by the Registrant.
Notwithstanding
the Registrant's agreements, there can be no assurance that the Registrant will
ever file any such registration statement and, even if so, that any such
registration statement will ever become effective, or that once effective, such
effectiveness will be maintained.
Pursuant
to the Agreement and Plan of Merger, at the Effective Time, if it has not
already done so, the Registrant shall take such actions as are necessary to
cause the number of directors comprising the Registrant's Board of Directors to
be increased to seven (7) directors, effective as of the Effective Time. At the
Effective Time, the Board of Directors of the Registrant shall consist of seven
(7) directors, of whom three (3) shall be individuals designated in writing by
Cengent sufficiently in advance of the Effective Time for the Registrant to
furnish appropriate disclosures concerning such persons in required filings and
notices, and four (4) of whom shall be individuals designated by the Registrant,
one of whom shall be the Registrant's Chief Executive Officer and Chairman at
the Effective Time.
The
description contained in this Item 1.01 of the terms and conditions of the
Agreement and Plan of Merger is qualified in its entirety by reference to the
full text of the Agreement and Plan of Merger, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K.
Upon
execution of the Agreement and Plan of Merger, the Registrant, Bioaccelerate
Holdings, Inc., a corporation of which the Registrant is an indirect subsidiary,
and Cengent executed and delivered a credit line facility agreement dated March
24, 2005 (the "Credit Line Facility Agreement") in favor of Cengent whereby
Bioaccelerate Holdings, Inc. made a $500,000 working capital advance to Cengent.
Pursuant to the Credit Line Facility Agreement, Bioaccelerate Holdings, Inc.
agreed to make an additional $500,000 working capital advance to Cengent every
30 days thereafter until the Merger is consummated or the Agreement and Plan of
Merger is terminated other than due to a breach by Bioaccelerate Holdings, Inc.
of its obligation to deliver a working capital advance to Cengent. Bioaccelerate
Holdings, Inc. will receive certain warrants for Cengent securities upon making
each advance and will have the benefit of the security interest and preferential
liquidation and debt repayment premium rights enjoyed by Cengent's secured
convertible note holders, pro rata with those holders as their respective
interests appear. However, if the Merger is consummated, the Cengent warrants
issued to Bioaccelerate Holdings, Inc. will terminate, as will Bioaccelerate
Holdings, Inc.'s right to participate in the preferential liquidation and debt
repayment premium rights of Cengent's secured convertible promissory note
holders, and the principal and interest on the working capital advances by
Bioaccelerate Holdings, Inc. will be rolled over into, and credited as advances
under, the secured credit facility which Bioaccelerate Holdings, Inc. has
furnished in favor of the Registrant, except as the parties shall otherwise
arrange. In the event that the Agreement and Plan of Merger is terminated due to
breach by Bioaccelerate Holdings, Inc. of its obligation to deliver a working
capital advance to Cengent pursuant to the Credit Line Facility Agreement,
Cengent will be entitled to retain the initial $500,000 working capital advance
furnished by Bioaccelerate Holdings, Inc. as liquidated damages and will have no
further claims with regard to that breach against Bioaccelerate Holdings, Inc.
The description contained in this Item 1.01 of the terms and conditions of the
Credit Line Facility Agreement is qualified in its entirety by reference to the
full text of the Credit Line Facility Agreement, which is filed as Exhibit 10.2
to this Current Report on Form 8-K.
In
connection with the execution and delivery of the Agreement and Plan of Merger,
Bioaccelerate Holdings, Inc., of which the Registrant is an indirect subsidiary,
arranged for Bioaccelerate, Inc., of which the Registrant is a subsidiary, to
establish a secured credit line facility (the "Secured Credit Line Facility") in
the amount of $12,000,000 in favor of the Registrant for the period of one year
following the Effective Time. Upon the Effective Time, any indebtedness owed to
Bioaccelerate Holdings, Inc. under the Secured Credit Line Facility Agreement
shall be rolled into and credited as advances under the Secured Credit Line
Facility, except as the parties shall otherwise arrange. The Registrant has
granted to Bioaccelerate, Inc. a first priority security interest in
substantially all of its assets to secure its obligations to make payments of
advances under the Secured Credit Line Facility. Advances under the Secured
Credit Line Facility shall be made by Bioaccelerate, Inc. to the Registrant as
required in respect of mutually agreed upon budgets and satisfaction of other
terms and conditions customary in loan agreements with senior lenders. Advances
under the Secured Credit Line Facility shall bear interest at the Applicable
Federal Rate, as defined in Section 1274(d) of the Internal Revenue Code of
1986, as amended, and shall be payable on the Maturity Date of the Secured
Credit Line Facility. The "Maturity Date" shall mean the earliest of (i) the
date on which any Placement (as that term is defined below) occurs,
(ii) the date on which an event of default under the Secured Credit Line
Facility occurs, or (iii)  the date on which a Change in Control occurs.
"Change in Control" shall mean (a) a merger , consolidation or any other
combination of the Registrant (other than a merger, consolidation or combination
of a wholly-owned subsidiary of the Registrant or any other person or entity
with respect to which Bioaccelerate, Inc. has given its approval in writing)
with any entity or person, (b) the sale of all or substantially all of the
assets of the Registrant, or (c) the purchase by a single entity or group, as
defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, of
more than 25% of the voting stock of the Registrant in a single transaction or a
series of related transactions. A "Placement" shall mean the closing of either
debt or equity financing in which the Registrant receives at least Twenty
Million Dollars ($20,000,000) in gross proceeds in any transaction or series of
related transactions after the date of the Secured Credit Line Facility. The
description contained in this Item 1.01 of the terms and conditions of the
Secured Credit Line Facility is qualified in its entirety by reference to the
full text of the letter agreement dated March 9, 2005 which is filed as Exhibit
10.3 to this Current Report on Form 8-K, and the related promissory note dated
March 9, 2005, which is filed as Exhibit 10.4 to this Current Report on Form
8-K, and the related security agreement dated March 9, 2005, which is filed as
Exhibit 10.5 to this Current Report on Form 8-K.
SECTION
2. FINANCIAL INFORMATION
ITEM
2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
(a) In
connection with the execution and delivery of the Agreement and Plan of Merger,
Bioaccelerate Holdings, Inc., of which the Registrant is an indirect subsidiary,
arranged for Bioaccelerate, Inc., of which the Registrant is a subsidiary, to
establish a secured credit line facility (the "Secured Credit Line Facility") in
the amount of $12,000,000 in favor of the Registrant for the period of one year
following the Effective Time. Upon the Effective Time, any indebtedness owed to
Bioaccelerate Holdings, Inc. under the Credit Line Facility Agreement shall be
rolled into and credited as advances under the Secured Credit Line Facility,
except as the parties shall otherwise arrange. The Registrant has granted to
Bioaccelerate, Inc. a first priority security interest in substantially all of
its assets to secure its obligations to make payments of advances under the
Secured Credit Line Facility. Advances under the Secured Credit Line Facility
shall be made by Bioaccelerate, Inc. to the Registrant as required in respect of
mutually agreed upon budgets and satisfaction of other terms and conditions
customary in loan agreements with senior lenders. Advances under the Secured
Credit Line Facility shall bear interest at the Applicable Federal Rate, as
defined in Section 1274(d) of the Internal Revenue Code of 1986, as amended, and
shall be payable on the Maturity Date of the Secured Credit Facility. The
"Maturity Date" shall mean the earliest of (i) the date on which any Placement
(as that term is defined below) occurs, (ii) the date on which an event of
default under the Secured Credit Line Facility occurs, or (iii)  the date
on which a Change in Control occurs. "Change in Control" shall mean (a) a merger
, consolidation or any other combination of the Registrant (other than a merger,
consolidation or combination of a wholly-owned subsidiary of the Registrant or
any other person or entity with respect to which Bioaccelerate, Inc. has given
its approval in writing) with any entity or person, (b) the sale of all or
substantially all of the assets of the Registrant, or (c) the purchase by a
single entity or group, as defined in Section 13(d) of the Securities Exchange
Act of 1934, as amended, of more than 25% of the voting stock of the Registrant
in a single transaction or a series of related transactions. A "Placement" shall
mean the closing of either debt or equity financing in which the Registrant
receives at least Twenty Million Dollars ($20,000,000) in gross proceeds in any
transaction or series of related transactions after the date of the Secured
Credit Line Facility. The description contained in this Item 2.03 of the terms
and conditions of the Secured Credit Line Facility is qualified in its
entirety by reference to the full text of the letter agreement dated March 9,
2005 which is filed as Exhibit 10.3 to this Current Report on Form 8-K, and the
related promissory note dated March 9, 2005, which is filed as Exhibit 10.4 to
this Current Report on Form 8-K, and the related security agreement dated March
9, 2005, which is filed as Exhibit 10.5 to this Current Report on Form 8-K.
SECTION 9
- FINANCIAL STATEMENTS AND EXHIBITS
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c)
Exhibits.
The
following exhibits are filed with this report:
10.1
Agreement and Plan of Merger dated March 24, 2005 by and among Inncardio, Inc.,
Cengent Acquisition Corp., and Cengent Therapeutics Inc.
10.2
Credit Line Facility Agreement dated March 24, 2005 by and among Bioaccelerate
Holdings, Inc., Inncardio, Inc., and Cengent Therapeutics Inc.
10.3
Commitment Letter dated March 9, 2005 for Secured Credit Line Facility by
Bioaccelerate, Inc. and Inncardio, Inc.
10.4
Senior
Secured Grid Note dated March 9, 2005 by Inncardio, Inc.
10.5
Security Agreement dated March 9, 2005 by Bioaccelerate, Inc. and Inncardio,
Inc.
[Signature
on following page.]
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
INNCARDIO,
INC.
By:
      /s/ Bernard Ross
---------------------------------
Bernard
      Ross
Chief
      Executive Officer
Date:
      March 30, 2005
EXHIBIT
INDEX
Exhibit
      Description
-------
      -----------
10.1
Agreement
      and Plan of Merger dated March 24, 2005 (the "Agreement and Plan of
      Merger") by and among Inncardio, Inc., Cengent Acquisition Corp., and
      Cengent Therapeutics Inc.
10.2
Credit
      Line Facility Agreement dated March 24, 2005 (the "Credit Line Facility
      Agreement") by and among Bioaccelerate Holdings, Inc., Inncardio, Inc.,
      and Cengent Therapeutics Inc.
10.3
Commitment
      Letter dated March 9, 2005 for Secured Credit Line Facility by
      Bioaccelerate, Inc. and Inncardio, Inc.
10.4
Senior
      Secured Grid Note dated March 9, 2005 by Inncardio, Inc.
10.5
Security
      Agreement dated March 9, 2005 by Bioaccelerate, Inc. and Inncardio,
      Inc.