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                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

(Mark One)

[X] Quarterly  report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

                For the Quarterly Period Ended February 28, 2002

                                       or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

       For the transition period from ______________ to ________________.


                        Commission File Number: 000-22565


                             INGENUUS CORPORATION
             (Exact name of registrant as specified in its charter)

                                    Delaware
                        (State or other jurisdiction of
                        incorporation or organization)


                       7455 Longard Road, Livermore, CA
                    (Address of principal executive offices)
                                   77-0298386
                                (I.R.S. Employer
                             Identification Number)


                                      94550
                                   (Zip Code)

      Registrant's telephone number, including area code: (925) 605-2600

     Indicate by check mark whether the  Registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.   Yes [X]  No [ ]

     The number of shares of the  Registrant's  Common Stock  outstanding  as of
February 28, 2002, was 38,623,062.


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--------------------------------------------------------------------------------

<PAGE>

                              INGENUUS CORPORATION

                                    FORM 10-Q
                    FOR THE QUARTER ENDED FEBRUARY 28, 2002


                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                              Page
                                                                                             -----
<S>                                                                                          <C>
                          PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

   a) Condensed Consolidated Statements of Operations for the three-months ended
      February 28, 2002 and 2001 .........................................................     1

   b) Condensed Consolidated Balance Sheets at February 28, 2002 and November 30, 2001         2

   c) Condensed Consolidated Statements of Cash Flows for the three-months ended
      February 28, 2002 and 2001 .........................................................     3

   d) Notes to Condensed Consolidated Financial Statements ...............................     4

Item 2. Management's Discussion and Analysis of Financial Condition and Results
 of Operations ...........................................................................     9

Item 3. Quantitative and Qualitative Disclosure About Market Risk ........................    18

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings ................................................................    18

Item 6. Exhibits and Reports on Form 8-K .................................................    19

SIGNATURES ...............................................................................    19
</TABLE>


<PAGE>

                         PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                              INGENUUS CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (in thousands, except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                      Quarter ended February 28,
                                                                     -----------------------------
                                                                          2002            2001
                                                                     -------------   -------------
<S>                                                                  <C>             <C>
Revenue ..........................................................     $     206       $     446
Cost of revenue ..................................................           411             737
                                                                       ---------       ---------
Gross profit (loss) ..............................................          (205)           (291)
                                                                       ---------       ---------
Operating expenses:
Research and development .........................................           477             783
Sales and marketing ..............................................           794             924
General and administrative .......................................           637           1,234
Amortization of goodwill and other intangible assets .............           768             834
                                                                       ---------       ---------
   Total operating expenses ......................................         2,676           3,775
                                                                       ---------       ---------
(Loss) from operations ...........................................        (2,881)         (4,066)
Gain (loss) on sale of investment ................................           --            2,380
Interest and other, net ..........................................           131              89
                                                                       ---------       ---------
(Loss) from continuing operations ................................        (2,750)         (1,597)
Income(Loss) from discontinued operations ........................           --               17
                                                                       ---------       ---------
Income (loss) before income taxes ................................        (2,750)         (1,580)
Income tax provision .............................................           --              --
                                                                       ---------       ---------
Net income (loss) ................................................        (2,750)         (1,580)
                                                                       ---------       ---------
Net (loss) attributable to common stockholders ...................     $  (2,750)      $  (1,580)
                                                                       =========       =========
EARNINGS (LOSS) PER SHARE--BASIC AND DILUTED
Continuing operations ............................................     $   (0.07)      $   (0.04)
Discontinued operations ..........................................           --              --
Net (loss) per share attributable to common stockholders .........     $   (0.07)      $   (0.04)
Shares used in basic and diluted per share calculation ...........        38,623          36,803
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements

                                        1

<PAGE>

                              INGENUUS CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   (in thousands, except per share amounts)




<TABLE>
<CAPTION>
                                                           February 28,     November 30,
                                                               2002             2001
                                                          --------------   -------------
                                                            (Unaudited)
<S>                                                       <C>              <C>
                                           ASSETS
Current assets:
 Cash and cash equivalents ............................     $   3,672        $   5,496
 Accounts receivable, (net of allowance) ..............           211              549
 Income taxes receivable ..............................           --               609
 Loan to related party ................................            52               62
 Prepaid expenses and other current assets ............           182              245
                                                            ---------        ---------
   Total current assets ...............................         4,117            6,961
Property and equipment, net ...........................         1,063              858
Goodwill and other intangible assets ..................         8,654            9,590
Restricted cash .......................................           125              125
Investments and other assets ..........................           115              114
                                                            ---------        ---------
   Total assets .......................................     $  14,074        $  17,648
                                                            =========        =========

                            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable .....................................     $     768        $     865
 Accrued liabilities ..................................         1,973            2,386
 Deferred revenue .....................................           225              539
                                                            ---------        ---------
   Total current liabilities ..........................         2,966            3,790
                                                            ---------        ---------
   Total liabilities ..................................         2,966            3,790
                                                            ---------        ---------
Commitments and contingencies (Notes 11 and 12)
Stockholders' equity:
 Common stock .........................................       103,472          103,472
 Treasury stock .......................................        (3,254)          (3,254)
 Accumulated deficit ..................................       (89,110)         (86,360)
                                                            ---------        ---------
   Total stockholders' equity .........................        11,108           13,858
                                                            ---------        ---------
   Total liabilities and stockholders' equity .........     $  14,074        $  17,648
                                                            =========        =========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                        2
<PAGE>

                              INGENUUS CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                         Quarter Ended
                                                                                -------------------------------
                                                                                         February 28,
                                                                                -------------------------------
                                                                                      2002             2001
                                                                                      ----             ----
<S>                                                                                <C>              <C>
Cash flows from operating activities:
Net loss ....................................................................      $ (2,750)        $  (1,580)
Adjustments to reconcile net loss to net cash provided by (used for)
 operating activities:
   Realized gain on sale of Virage Logic shares .............................           --             (2,380)
   Write-off of fixed assets ................................................            24               --
   Depreciation and amortization ............................................         1,003             1,237
   Gain (Loss) on sale of fixed assets ......................................           --                  2
   Gain (Loss) on disposal of fixed assets ..................................             5               --
   Changes in assets and liabilities, net of assets and liabilities acquired
    /disposed of:
    Accounts receivable .....................................................           188               (43)
    Income tax receivable ...................................................           609               --
    Loan to related party ...................................................            10               --
    Prepaid expenses and other current assets ...............................            63               (17)
    Other assets ............................................................            (1)              --
    Accounts payable ........................................................           (97)             (415)
    Accrued liabilities .....................................................          (413)           (1,736)
    Deferred revenue ........................................................          (164)              (39)
                                                                                   ----------       ---------
      Net cash used for operating activities ................................        (1,523)           (4,971)
                                                                                   ----------       ---------
Cash flows from investing activities:
 Purchases of property and equipment ........................................          (301)              --
 Proceeds from Sales of available-for-sale securities .......................           --              2,700
                                                                                   ----------       ---------
      Net cash provided by (used for) investing activities ..................          (301)            2,700
                                                                                   ----------       ---------
Cash flows from financing activities:
 Proceeds from issuance of common stock, net ................................           --                  2
                                                                                   ----------       ---------
      Net cash provided by (used for) financing activities ..................           --                  2
                                                                                   ----------       ---------
 Net proceeds from the sale of discontinued operations ......................           --              1,000
 Effective exchange rate changes on cash and cash equivalents ...............           --                (25)
Net (decrease) increase in cash and cash equivalents ........................        (1,824)           (1,294)
Cash and cash equivalents, beginning of period ..............................         5,496             8,789
                                                                                   ----------       ---------
Cash and cash equivalents, end of period ....................................      $  3,672         $   7,495
                                                                                   ==========       =========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                        3

<PAGE>

                              INGENUUS CORPORATION

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. Basis of Presentation

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming that Ingenuus Corporation will continue as a going concern. The Company
has suffered recurring losses from operations and has an accumulated  deficit of
$89.1 million.  In the first quarter of fiscal 2000, the Company purchased Inbox
Software,  Inc, and this acquisition has yet to generate  significant  revenues.
The Company's  continued  existence depends on its ability to achieve profitable
operations.  If this does not happen,  the Company will need to raise additional
capital to fund its  operations.  There is  substantial  doubt  that  either the
Company will achieve  profitability,  or that it will be  successful  in raising
additional  funding if  profitability  is not achieved.  Since  current  revenue
projections  were not met,  the  Company,  further  reduced  its  headcount  and
operating  expenses.  Based on the latest  reduction in headcount  and operating
expenses,  Management believes that with the projected revenues and reduction in
expenses,  the Company expects to be able to fund its operations in fiscal 2002.
The consolidated  financial statements do not include any adjustments that might
result from the outcome of the uncertainty.

     Certain  reclassifications  have been made to 2001  amounts to conform with
the 2002 presentation. These reclassifications had no effect on net loss.

2. Discontinued Operations

     In February 2000, the Company entered into an asset purchase agreement with
DII Semiconductor, Inc. ("DII"), whereby the SIP Business would be sold, subject
to Board approval. The agreement was ratified in March 2000.

     On April 6,  2000,  the  Company  sold the SIP  Business  to DII for  $11.3
million ($5.5 million in cash and approximately $1 million due quarterly through
October  2001).  As a  result,  the  operations  of the SIP  Business  have been
classified as discontinued operations in the accompanying Condensed Consolidated
Financial Statements and related Notes.

     At November  30, 2001,  the $11.3  million for the sale of the SIP business
had been collected in full.

     The Company was  unsuccessful  in selling  Verilux,  the EDA segment of the
company.  On May 15,  2001,  the  Company  notified  Verilux  Design  Technology
(Verilux) employees of its intent to terminate their employment with the Company
in one hundred twenty days and accrued  termination  benefits of $226,000 in the
second  quarter.  On June 18, 2001, the Company adopted a plan to dispose of the
assets of  Verilux  Design  Technology.  In the event that the assets of Verilux
Design  Technology could not be sold, the Verilux business would be discontinued
effective August 31, 2001. As a result,  the operations of the EDA business have
been  classified  as  discontinued  operations  in  the  accompanying  Condensed
Consolidated Financial Statements and related Notes.

     Revenues for the EDA Business  were $0 for the quarter  ended  February 28,
2002 and $261,000 for the quarter ended February 28, 2001.

3. Earnings Per Share (EPS) Disclosures

     Basic  EPS  excludes  dilution  and is  computed  by  dividing  net  income
attributable  to common  stockholders  by the weighted  average of common shares
outstanding  (excluding  shares  subject to  repurchase  rights) for the period.
Diluted EPS reflects the  potential  dilution  that could occur if securities or
other  contracts to issue common stock were  exercised or converted  into common
stock.

4. Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"),  "Accounting for Derivative
Instruments  and Hedging  Activities."  SFAS 133  establishes  new  standards of
accounting and reporting for derivative instruments and hedging activities. SFAS
133 and as amended by SFAS 138  "Accounting for Certain  Derivative  Instruments
and


                                        4

<PAGE>

                              INGENUUS CORPORATION

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(Continued)

Hedging Activities, and amendment to SFAS 133," requires that all derivatives be
recognized  at fair value in the statement of financial  position,  and that the
corresponding  gains or losses be reported either in the statement of operations
or as a component  of  comprehensive  income,  depending  on the type of hedging
relationship that exists. In July 1999, the Financial Accounting Standard Boards
issued SFAS No. 137 ("SFAS 137"),  "Accounting  for Derivative  Instruments  and
Hedging  Activities--Deferral  of the Effective  Date of SFAS No. 133." SFAS 137
deferred the  effective  date of SFAS 133 until the first fiscal  quarter of the
fiscal year beginning after June 15, 2000. The adoption of SFAS 133 and SFAS 137
did not have a material effect on the Company's financial position or results of
operations.

     In March  2000,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions Involving
Stock Compensation--an  Interpretation of APB 25." FIN 44 becomes effective July
1, 2000, but certain  conclusions  cover specific events that occur after either
December  15, 1998 or January 12,  2000.  The  adoption of FIN 44 did not have a
material effect on the Company's financial position or results of operations.

     In July 2001, the FASB issued two Statements,  Statement No. 141,  Business
Combinations  (SFAS  No.  141),  and  Statement  No.  142,  Goodwill  and  Other
Intangible Assets (SFAS No. 142). SFAS No. 141 revises accounting  treatment for
business  combinations  requiring the use of purchase accounting and prohibiting
the use of  pooling-of-interests  method for all business combinations initiated
after June 30, 2001 and broadens the criteria for  recording  intangible  assets
separate from goodwill for all business  combinations  completed  after June 30,
2001.  SFAS No. 142 revises the  accounting  for goodwill  and other  intangible
assets by not allowing amortization of goodwill and establishing  accounting for
impairment  of  goodwill  and  other  intangible  assets.  SFAS No.  142 will be
effective  for fiscal  years  beginning  after  December  15,  2001,  with early
adoption  allowed for  companies  with a fiscal year  beginning  after March 15,
2001.  The  Company  did not early  adopt SFAS 142.  Companies  with fiscal year
ending after  December 15, 2001 are required to adopt SFAS 142.  Companies  with
fiscal  year ending  after March 15, 2001 can early adopt SFAS 142.  The Company
will adopt SFAS 142 in fiscal year 2003, beginning December 1, 2002. The Company
has not yet evaluated the effects of these changes on its consolidated financial
statements.

     In August 2001, the Financial  Accounting Standards Board issued Statements
of Financial  Accounting  Standards  No.144,  "Accounting  for the Impairment or
Disposal of Long-Lived  Assets",  effective for financial  statements issued for
fiscal years  beginning after December 15, 2001 and interim periods within those
fiscal  years.  FAS 144  addresses  financial  accounting  and reporting for the
impairment of disposal of long-lived assets and replaces FAS 121 while retaining
the substantive  aspects, and amends certain accounting and reporting provisions
of APB Opinion No.30 and ARB No.51.The new rule removes  goodwill from its scope
and,  therefore,  eliminates the requirement of FAS 121 to allocate  goodwill to
long-lived assets to be tested for impairment.  It also establishes guidance and
criteria beyond that previously  specified in Statement 121,  including guidance
on reporting discontinued operations.  The Company did not early adopt SFAS 144.
Companies  with fiscal year ending after December 15, 2001 are required to adopt
SFAS 144.  The  Company  will  adopt  SFAS 144 in fiscal  year  2003,  beginning
December  1,  2002.  The  Company  will  apply  the new rule on  accounting  for
long-lived  assets  beginning  in the  first  quarter  of  2003  and has not yet
determined the extent of such effects on the Company's financial statements.


5. Comprehensive Income (Loss)

     The Company follows the provisions of SFAS No. 130, Reporting Comprehensive
Income.   This  statement   requires   companies  to  classify  items  of  other
comprehensive income by their components in the financial statements and display
the accumulated balance of other  comprehensive  income separately from retained
earnings in the equity section of a statement of financial position.


                                        5

<PAGE>

                              INGENUUS CORPORATION

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(Continued)


     The  Company's  total  comprehensive  income  (loss)  was  as  follows  (in
thousands):

                                                           QUARTER ENDED
                                                           FEBRUARY 28,
                                                     -------------------------
                                                         2002          2001
                                                         ----          ----

    Net Loss .....................................      (2,750)       (1,580)
    Other comprehensive income:
    Realized gain--previously recognized .........         --         (1,942)
    Unrealized holding gain on available--for sale
     marketable securities .......................         --          1,238
                                                        ------        ------
    Comprehensive Income/(Loss) ..................      (2,750)       (2,284)
                                                        ======        ======

6. Investments

Investment in Virage Logic

     In fiscal 1998,  the Company  made a private  equity  investment  in Virage
Logic Corp.  ("Virage"),  for an aggregate cost of $840,000.  As of November 30,
1999,  this investment was carried at cost in the balance sheet as the Company's
ownership  interest in Virage was less than 20%. Since August 2000,  when Virage
completed an initial public offering of its Common Stock, the equity  securities
are publicly traded. As of November 30, 2001, the Company sold all of the Virage
Logic, Corp. shares held (525,000) for $7.0 million at a cost of $840,000, which
resulted in a gain of $6.2  million.  $2.4  million of this gain was included in
income from operations for the quarter ended February 28, 2001.

Impairment of Investment in Slim Technology

     During the first  quarter  of fiscal  1999,  the  Company  purchased  a 40%
interest in Slim Technology Co, Ltd., a Korean company, ("Slim Tech"), at a cost
of $2.3 million.  Slim Tech performs  semiconductor  design  services for Korean
customers. With the disposal of the SIP business in April 2000 and the Company's
new focus as a software business-to-business collaborative commerce company, the
investment in Slim Tech was no longer strategic to the Company's operations, and
as  a  result,  the  Board  of  Directors  authorized  management  to  sell  the
investment.  Based on a number of factors, including the failure to find a buyer
for the investment and recurring operating losses generated from the investment,
and in accordance with the provisions of APB 18 "The Equity Method of Accounting
for  Investments  in Common  Stock",  management  assessed that there had been a
permanent decline in the value of this investment.  An impairment charge of $1.7
million was recorded in fiscal 2000 to write down the value of the investment.

7. Sale of Chip & Chip, Inc.

     On June 13, 2000, the Company entered into an Asset Purchase Agreement with
the management of Chip & Chip Inc., ("Chip & Chip"),  part of the EDA segment of
the company. Chip & Chip Management purchased the assets and certain liabilities
of Chip & Chip for $2.58 million  (payable in three  installments  over the next
two years).  The  proceeds are secured on  1,000,000  Ingenuus  shares and fully
vested options to purchase  700,000 shares held by Chip & Chip  management,  and
1,000,000  shares of Chip & Chip.  The gain of  $292,000  from the sale has been
deferred and will be recognized as the payments are received.

     The first  installment of the sales  consideration was paid on the due date
in the  fourth  quarter  of  fiscal  2000,  $242,000  in cash  and  $633,000  by
surrendering  500,000  shares  of  Ingenuus  stock to the  Company.  Chip & Chip
defaulted on the second  payment of $850,000 due in October 2001.  Subsequent to
the  default of  payment by Chip & Chip,  it was also noted that Chip & Chip was
not able to raise enough capital to continue as a  going-concern  and/or be able
to repay the notes to the  Company.  The second and third  payments  were deemed
uncollectible and were written-off on November 30, 2001.


                                        6

<PAGE>

                              INGENUUS CORPORATION

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(Continued)

8. Segment and Geographic Information

     As of  November  30,  2001,  the  Company  operated  as only  one  segment,
Ingenuus. The Ingenuus segment includes the  business-to-business  collaborative
commerce  solutions  related  to Inbox,  as well as the  hardware  and  software
maintenance  services  related to Novo. The EDA segment was  discontinued  as of
August 31, 2001.

     Enterprise-wide  information  is provided in accordance  with SFAS No. 131.
Revenue is by country,  based on the location of the customer.  All property and
equipment,  except for an immaterial  amount,  is based in the United States and
therefore is not disclosed below. Geographic revenue for each of the three-month
period  ended  February  28,  2002  and  February  28,  2001 is as  follows  (in
thousands):

                                             QUARTER ENDED
                                     ------------------------------
                                      FEBRUARY 28,     FEBRUARY 28,
                                          2002             2001
                                          ----             ----

       United States ...............      $ 74             $172
       Asia ........................       132              259
       Other International .........        --               15
                                          ----             ----
          Total ....................      $206             $446
                                          ====             ====

     Major  Customers and  International  Sales --For the quarter ended February
28, 2002, four customers  accounted for 22%, 18%, 12% and 11% for a total 63% of
revenue.  For the quarter ended February 28, 2001, four customers  accounted for
24%, 19%, 16%, and 8% for a total of 67% of revenue.

9. Stock Repurchase Program

     In March 2001, the Company approved a stock repurchase  program in which up
to  $1,500,000  of its Common  Stock may be purchased by the Company in the open
market  from time to time,  depending  upon market  conditions,  share price and
other factors.  As of November 30, 2001, Ingenuus had repurchased 482,200 shares
of Common Stock under this  program at a total cost of  $169,200.  There were no
repurchases of Common Stock in the quarter ended February 28, 2002.

10. Repricing of Stock Option

     In January 2001,  the Board of Directors  approved a proposition  to reduce
the exercise price of all employees' and consultants' stock options  outstanding
to $0.375 per share,  the fair market value of the Company's  common stock as of
January 8, 2001.  On  September  24,  2001,  the Board of  Directors  approved a
proposition   again  to  reduce  the  exercise   price  of  all  employees'  and
consultants' stock options outstanding to $0.11 per share, the fair market value
of the  Company's  common  stock as of September  25, 2001.  As a result of such
modification,  all options  eligible  to the offer are subject to variable  plan
accounting  until the option is  exercised,  cancelled  or  expired.  Any future
increase in stock market price will result in additional compensation expense.

     For the quarter ending February 28, 2002 and February 28, 2001, the Company
did not record any  compensation  expenses related to repricing of stock options
since the stock market price was at or below the repriced option price.



                                        7

<PAGE>

                              INGENUUS CORPORATION

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(Continued)


11. Other Significant Events

     In December 2001,  the Company  relocated its corporate  headquarters  from
Sunnyvale, California to 7455 Longard Road, Livermore, California, pursuant to a
new lease that expires in November 2011. We incurred  approximately  $900,000 in
capital  expenditures  related to the  interior  improvements  of our  Livermore
facility,  and  approximately  $100,000 in moving and other expenses.  The lease
payments for the new facility are as follows:

   Year ended November 30,
   -----------------------
          2002 ...............................................    $  270
          2003 ...............................................       282
          2004 ...............................................       294
          2005 ...............................................       305
          2006 ...............................................       317
          For the years thereafter ...........................     1,782
                                                                  ------
          Total minimum lease for Livermore office ...........    $3,250


12. Contingencies

Other Litigation

     On September 23, 1999, a lawsuit entitled Lesley Nemeth v. Aspec Technology
Inc.,  was  filed in  Superior  Court,  County of Santa  Clara  No.  DC  383204.
Plaintiff  is a former  consultant  to the  Company  who seeks in her  complaint
damages in the sum of $12,600 plus interest and attorneys' fees. On November 23,
1999, the court ordered the matter to binding  arbitration  administered  by the
American Arbitration  Association  ("AAA").  Plaintiff led her arbitration claim
with the AAA on or about March 2, 2000. An  arbitrator  was  appointed,  and the
arbitration was scheduled for September 8, 2000. The court case was dismissed by
the court for  failure  by the  plaintiff  to  appear at an  arbitration  review
conference.  Plaintiff has filed a motion to vacate the dismissal,  which motion
was granted by the court  following a hearing on January  23,  2001.  The matter
remains  in  private  arbitration  before  the  AAA.  The  arbitration  date was
rescheduled  for January 28,  2002,  at which time the  arbitration  hearing was
held.  On February  12,  2002,  the  arbitrator  rendered  an award  denying Ms.
Nemeth's  claim,  and  ordering  each  party  to pay one half of the  costs  and
expenses of arbitration.


                                        8


<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Introduction

     This  section--Management's  Discussion and Analysis of Financial Condition
and  Results  of  Operations--contains  forward-looking  statements  within  the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities  Exchange Act of 1934, as amended.  These  forward-looking
statements  are based on current  expectations  and  include  various  risks and
uncertainties  that could cause actual results to differ  materially  from those
projected.  Such risks and  uncertainties  are set forth below and under  "Other
Factors Affecting Future Operating  Results." These  forward-looking  statements
speak only as of the date hereof and are expressly  qualified in their  entirety
by those factors and all related  cautionary  language.  The company is under no
obligation  (and hereby  expressly  disclaims  any  obligation)  to update these
forward-looking  statements,  whether  as a result  of new  information,  future
events, or otherwise.

Company Overview

     Ingenuus  Corporation  ("the  Company"),   a  Delaware   corporation,   was
incorporated  in 1991 as Aspec  Technology,  Inc. Until fiscal 2000, the Company
derived  primarily  all of its  revenues  from  the  Semiconductor  Intellectual
Property ("SIP")  business.  During fiscal 2000, the Company disposed of its SIP
business  for $11.3  million and  recorded a gain on  disposal  of  discontinued
operations of $4.4 million.

     In September 1999, the Company  purchased Verilux Design  Technology,  Inc.
("Verilux")  and Chip & Chip,  Inc.  ("Chip &  Chip"),  two  start-up  companies
developing  Electronic  Design  Automation  ("EDA") tools for the  semiconductor
industry.  On June 13, 2000,  the Company  entered into an agreement to sell the
Chip & Chip  business  to the  management  of Chip & Chip,  for a price of $2.58
million,  payable in three installments over two years. The first installment of
the sales consideration was paid on the due date in the fourth quarter of fiscal
2000,  $242,000 in cash and $633,000 by surrendering  500,000 shares of Ingenuus
stock to the Company.  The two remaining payments,  due in October 2001 and July
2002, were written off in November 2001 because they were deemed  uncollectible.
Verilux was discontinued on August 31, 2001.

     In October  1999,  the Company  also  purchased  Novo  Systems  Corporation
("Novo"), a company providing maintenance services to the semiconductor industry
and also engaged in the development of EDA tools.

     In  December  1999,  the  Company purchased Inbox Software, Inc., a company
providing  business-to-business  collaborative  commerce  software solutions for
manufacturers.

     As of  February  28,  2002,  the  Company  operated  as only  one  segment,
Ingenuus. The Ingenuus segment includes the  business-to-business  collaborative
commerce solutions related to Inbox,  hardware and services related to Novo, and
maintenance services related to Novo and Inbox. The EDA segment was discontinued
as of August 31, 2001.

Consulting Services

     While the Ingenuus  product and  maintenance  revenue is expected to be our
main revenue  source in 2002, we also expect to derive  revenue from delivery of
professional services.

     Costs for these professional consulting services are fixed.

Maintenance Services

     We  offer  standard  support  services,   which  include  product  updates,
telephone and Internet  support.  Custom  support  services are also  available,
including standard support services plus technical  management,  application and
educational services.

Critical Accounting Policies

     In the  ordinary  course  of  business,  the  company  has made a number of
estimates and assumptions relating to the reporting of results of operations and
financial condition in the preparation of its financial


                                        9

<PAGE>

statements in conformity with accounting  principles  generally  accepted in the
United States of America.  Actual results could differ  significantly from those
estimates under different assumptions and conditions.  The Company believes that
the  following  discussion  addresses the  Company's  most  critical  accounting
policies,  which are  those  that are most  important  to the  portrayal  of the
Company's financial condition and results.  The Company constantly  re-evaluates
these  significant  factors and makes  adjustments where facts and circumstances
dictate.  Although historically,  actual results have not significantly deviated
from those determined using the necessary  estimates inherent in the preparation
of financial statements, future actual results may vary significantly. Estimates
and assumptions  include,  but are not limited to, customer  receivables,  fixed
asset lives,  contingencies and litigation.  The Company has also chosen certain
accounting policies when options were available, including:


   * The  intrinsic  value  method,  or  APB  Opinion No. 25, to account for our
     common stock incentive awards; and

   * We record an allowance  for credit  losses based on estimates of customers'
     ability  to  pay.  If the  financial  condition  of our  customers  were to
     deteriorate, additional allowances may be required.

   * We will adopt SFAS 142,  Goodwill and Other  Intangible  Assets,  in fiscal
     year 2003,  beginning  December  1,  2002.  We have not yet  evaluated  the
     effects of these changes.

     These accounting policies are applied consistently for all years presented.
Our  operating  results  would be  affected  if other  alternatives  were  used.
Information  about the  impact  on our  operating  results  is  included  in the
footnotes to our consolidated financial statements.

Results of Continuing Operations

     As of November  2001, the Company  operated as only one segment,  Ingenuus.
The Ingenuus segment includes the  business-to-business  collaborative  commerce
solutions  related  to  Inbox,  hardware  and  services  related  to  Novo,  and
maintenance services related to Novo and Inbox. The EDA segment was discontinued
as of August 31,  2001.  Ingenuus  segment's  activities  for the quarter  ended
February 28,  2002,  excluding  amortization  of  goodwill,  involved  primarily
activities  surrounding  product  revenues  from  the  Inbox  business,   system
maintenance   revenue  from  the  Novo   business,   research  and   development
expenditures, sales and marketing and general administrative expenses.

     The EDA segment,  which included the development and sale of software tools
for  Electronic  Design   Automation,   related  to  Verilux  Design  Technology
(Verilux), was discontinued as of August 31, 2001.

Results of Operations

     The following  tables set forth  selected  statements  of  operations  data
expressed  both in dollars (in thousands) and as a percentage of revenue for the
three-month  period ending February 28, 2002 compared to the three-month  period
ending February 28, 2001:


                                       10

<PAGE>

                              INGENUUS CORPORATION

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                 (in thousands)
                                   (Unaudited)




<TABLE>
<CAPTION>
                                                                 First Quarter Ended February 28,
                                                                 --------------------------------
                                                                       2002            2001
                                                                       ----            ----
                                                                     Ingenuus        Ingenuus
                                                                     --------        --------
<S>                                                               <C>             <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
 Revenue ......................................................     $     206       $     446
 Cost of revenue ..............................................           411             737
                                                                    ---------       ---------
 Gross profit (loss) ..........................................          (205)           (291)
Operating expenses:
 Research and development .....................................           477             783
 Sales and marketing ..........................................           794             924
 General and administrative ...................................           637           1,234
 Amortization of goodwill and other intangible assets .........           768             834
                                                                    ---------       ---------
   Total operating expenses ...................................         2,676           3,775
                                                                    ---------       ---------
(Loss) from operations: .......................................        (2,881)         (4,066)
Gain (loss) on sale of investment .............................           --            2,380
Interest and other, net .......................................           131              89
                                                                    ---------       ---------
(Loss) from continuing operations .............................        (2,750)         (1,597)
Income (loss) from discontinued operations ....................           --               17
                                                                    ---------       ---------
Income (loss) before income taxes .............................        (2,750)         (1,580)
Income tax provision ..........................................           --              --
                                                                    ---------       ---------
Net income(loss) ..............................................     $  (2,750)      $  (1,580)
                                                                    =========       =========
</TABLE>


                                       11

<PAGE>

                              INGENUUS CORPORATION

                      CONSOLIDATED STATEMENT OF OPERATIONS
                            (percentage of revenue)
                                   (Unaudited)




<TABLE>
<CAPTION>
                                                                First Quarter Ended February 28,
                                                                --------------------------------
                                                                       2002           2001
                                                                       ----           ----
                                                                     Ingenuus       Ingenuus
                                                                     --------       --------
<S>                                                               <C>             <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
 Revenue ......................................................          100%          100%
 Cost of revenue ..............................................          200           165
                                                                         ---           ---
 Gross profit (loss) ..........................................         (100)          (65)
Operating expenses:
 Research and development .....................................          232           176
 Sales and marketing ..........................................          385           207
 General and administrative ...................................          309           277
 Amortization of goodwill and other intangible assets .........          373           187
                                                                        ----           ---
   Total operating expenses ...................................        1,299           847
                                                                       -----           ---
(Loss) from operations: .......................................       (1,399)         (912)
Gain (loss) on sale of investment .............................            0           534
Interest and other, net .......................................           64            20
                                                                      ------          ----
(Loss) from continuing operations .............................       (1,335)         (358)
Income (loss) from discontinued operations ....................            0             4
                                                                      ------          ----
Income (loss) before income taxes .............................       (1,335)         (354)
Income tax provision ..........................................            0             0
                                                                      ------          ----
Net income (loss) .............................................       (1,335)%        (354)%
                                                                      ------          ----
</TABLE>

     Revenue Product  revenue for the Ingenuus  segment  primarily  consisted of
engineering  and  manufacturing  change  management  software  licenses  sold to
companies.  Service revenue for the Ingenuus segment primarily consisted of Novo
maintenance  services for third party hardware and software  products as well as
maintenance  services related to Ingenuus products.  Product revenue for our EDA
segment primarily consisted of software license sold to semiconductor companies.

     Revenue for  Ingenuus  decreased  by 54% to  $206,000 in the quarter  ended
February 28, 2002 from $446,000 in the quarter ended February 28, 2001.  Product
revenue  decreased to $2,000 from $41,000,  while service  revenue  decreased to
$204,000 from $405,000 in the quarters  ended February 28, 2002 and February 28,
2001, respectively. This decrease was primarily attributable to lower demand for
our products and services.

     Revenue  from the EDA segment for the quarter  ended  February 28, 2001 was
$261,000. The EDA segment was discontinued as of August 31, 2001.

     International  revenue for the Company accounted for 64% of revenue for the
quarter ended February 28, 2002.

     Cost of  revenues  Cost of  revenue  primarily  consists  of the  costs  of
products,  personnel,  amortization  of  acquired  Inbox  technology  and  other
operating  expenses  incurred in providing  services to the  customers.  Cost of
revenues for Ingenuus  segment  decreased by $326,000 to $411,000 in the quarter
ended  February 28, 2002 from $737,000 in the quarter  ended  February 28, 2001.
The decrease in cost of revenues was mainly due to $194,000 decrease in salaries
and benefits due to reduction in  headcount.  The decrease of $72,000 in cost of
revenue in our Japan office was due to reduced  revenue,  which  resulted in the
reduction of subcontractor costs. Cost of revenue as a percentage of revenue was
200% and 165% in the


                                       12

<PAGE>

quarters  ended February 28, 2002 and February 28, 2001,  respectively.  Cost of
revenues for the EDA segment was  immaterial in the quarters  ended February 28,
2001. EDA segment was discontinued as of August 31, 2001.

     Research and development  Research and development  expenses  represent the
cost of engineering personnel and other expenses incurred in the development and
enhancement  of our core  technology  and  products.  Research  and  development
expenses for the  Ingenuus  segment  decreased to $477,000 in the quarter  ended
February 28, 2002 from  $783,000 in the quarter  ended  February  28, 2001.  The
decrease in research and development  expenses in the quarter ended February 28,
2002  was  mainly  due  to  decreases  in  consulting  fees  of  $186,000,   and
depreciation  expenses of $74,000.  The majority of our computer  equipment  was
fully  depreciated  in fiscal  2001.  Research  and  development  expenses  as a
percentage of revenue were 232% in the quarter ended February 28, 2002, and 176%
in the quarter ended February 28, 2001.

     Research  and  development  expenses  for the EDA business was $169,000 for
Verilux in the quarter ended  February 28, 2001.  The Company  discontinued  the
operations of Verilux as of August 31, 2001.

     Sales and marketing Sales and marketing  expenses  consist of salaries paid
to internal sales and marketing personnel and sales representatives, advertising
costs and related operating expenses.  Sales and marketing expenses decreased by
$130,000 to $794,000 in the quarter ended February 28, 2002 from $924,000 in the
quarter ended  February 28, 2001.  The decrease of sales and marketing  expenses
was mainly due to $183,000  decrease  in  recruiting,  $103,000  in  advertising
related expenses and $32,000 in travel. These decreases were partially offset by
increases in personnel cost of $141,000 and professional fees of $22,000.  Sales
and  marketing  expenses as a  percentage  of revenue  were 385% and 207% in the
quarters ended February 28, 2002, and 2001, respectively.

     There were no sales and  marketing  expenses  for the EDA business in first
quarter 2001. EDA segment was discontinued as of August 31,2001.

     General and  administrative  General and  administrative  expenses  include
salaries and expenses related to executives,  corporate finance, legal and human
resources.  These costs  decreased by $597,000 to $637,000 in the quarter  ended
February 28, 2002 from $1.2 million in the quarter ended  February 28, 2001. The
decrease in general  and  administrative  expenses  was mainly due to a $135,000
decrease in personnel  costs as a result of reductions  in  workforce,  $261,000
decrease in professional  services  related to consulting,  legal and accounting
fees. There was also a decrease of $97,000 of G&A expenses related to our office
in Japan. A decrease of $63,000 in salaries and travel  expenses was a result of
the elimination of the general manager and other positions and $34,000  decrease
in  common  expenses  due to  relocating  to a  smaller  facility.  General  and
administrative  expenses as a  percentage  of revenue  were 309% and 277% in the
quarters ended February 28, 2002, and 2001, respectively.

     Amortization of goodwill and other  intangible  assets The  amortization of
goodwill and other intangible  assets decreased to $768,000 in the quarter ended
February 28, 2002 from  $834,000 in the quarter  ended  February  28, 2001.  The
decrease of $66,000 resulted from the reduction of amortization expenses because
the acquired workforce and other intangibles were fully amortized as of November
30, 2001.  Amortization of goodwill and other intangible  assets as a percentage
of revenue were 373% and 187% in the quarters ended February 28, 2002, and 2001,
respectively.

     Gain on sale of  investments In fiscal Q1 2001, the Company sold 200,000 of
the 525,000  shares of Virage Logic it held,  for $2.7 million,  at an aggregate
cost of $320,000,  resulting in a gain of $2.4 million. During fiscal year 2001,
the Company sold the entire of 525,000 shares of Virage Logic. Therefore,  there
were no securities  available for sale as of November 30, 2001.  Gain on sale of
investment,  as a percentage  of revenue was 0% and 534% in the  quarters  ended
February 28, 2002, and 2001, respectively.

     Interest and other, net The interest and other, net increased by $42,000 to
$131,000 in quarter  ended  February 28, 2002 from $89,000 in the quarter  ended
February  28,  2001.  The increase was due mainly to interest of $118,000 on tax
refunds  received from the IRS, which was offset by $72,000 decrease in interest
and dividend income on investments.  Interest and other,  net as a percentage of
revenue were 64% and 20% in the  quarters  ended  February  28, 2002,  and 2001,
respectively.


                                       13

<PAGE>

     Foreign  Currency. Balance  sheet  accounts  of  Novo foreign subsidiary in
Japan  are  translated into U.S. dollars at exchange rates prevailing at balance
sheet  dates.  Revenue,  costs  and expenses are translated into U.S. dollars at
average  rates  for the period. Gains and losses resulting from foreign exchange
transactions   are  included  in  the  statement  of  operations  and  were  not
significant during the periods presented.

     Provision for income taxes.  There was no provision for income taxes in the
quarters ended February 28, 2002, and 2001, respectively.

     The Company has taken a valuation  allowance  on the full amount of the net
operating loss  carry-forwards and its other net deferred tax assets since it is
likely that the benefit will not be realized in the future.

Liquidity and Capital Resources

     We have funded our operations  primarily  from license  revenue and the net
proceeds of $71.9 million from the initial  public  offering of our Common Stock
in May 1998.

     Our operating  activities used net cash of $1.5 million and $5.0 million in
the quarters ended February 28, 2002, and 2001,  respectively.  Net cash used in
the quarters  ended  February 28, 2002 and 2001 was due to the  significant  net
losses  incurred.  During the  quarter  ended  February  28,  2002,  we received
$609,000 in income tax refunds from IRS.

     Net cash (used for) and provided by investing  activities  were  ($301,000)
and  $2.7  million  in  the  quarters   ended   February  28,  2002,  and  2001,
respectively.  During the quarter ended  February 28, 2002, we used $295,000 for
capital expenditures related to interior improvements to our Livermore facility.
In the quarter ended February 28, 2001, we received net proceeds of $2.7 million
from the sale of 200,000 shares of Virage Logic, Corp.

     Net cash provided by financing  activities  was $2,000 from the issuance of
Common Stock in the quarter ended February 28, 2001.

     Net proceeds from the sale of SIP business were $1.0 million in the quarter
ended February 28, 2001. The entire amount of $11.3 million from the sale of SIP
business had been received as of November 30, 2001.

     As of February 28, 2002, we had cash and cash  equivalents of $3.7 million,
an accumulated  deficit of $89.1 million and working capital of $1.2 million. We
anticipate  approximately  $100,000 of capital  expenditures  over the next nine
months.

     We have  suffered  recurring  losses in fiscal 2001,  2000,  and 1999.  Our
continued   existence  is  dependent  on  our  ability  to  achieve   profitable
operations.  We intend to continue to invest in the  development of new products
and  enhancements  to our existing  products.  Our future  liquidity and capital
requirements will depend upon numerous factors, including:

     * The costs and timing of our product  development  efforts and the success
       of these development efforts;

     * The costs and timing of our sales and marketing activities;

     * The extent to which our existing and new products gain market acceptance;

     * Competing technological and market developments; and

     * The costs involved in maintaining  and enforcing  patent claims and other
       intellectual property rights.

     Based on our current revenue projections, our cost reduction efforts in the
first  quarter of 2002,  which  resulted in further  reductions in headcount and
operating expenses, and our existing cash balance, we believe we will be able to
fund our operations  during 2002.  Thereafter,  we will need to raise additional
funds in order to support our continued  operating  losses and to otherwise fund
our operations.  We cannot be sure that additional  funding will be available on
acceptable terms or at all. If adequate funds are not available,  we will likely
be required to further curtail or cease our operations. The amount and timing of


                                       14

<PAGE>

our future  capital needs will be highly  dependent upon our ability to increase
our revenue,  control our expenses, and successfully manage the restructuring of
our operations.  Thus, our current  expectations of the amount and timing of our
future cash needs and cash flows are subject to substantial  uncertainty.  If we
succeed in raising  additional funds through the issuance of equity  securities,
the issuance could result in substantial dilution to existing  stockholders.  If
we raise  additional  funds through the issuance of debt securities or preferred
stock, these new securities would have rights, preferences and privileges senior
to those of the holders of our common stock. The terms of these securities could
also impose restrictions on our operations.

Other Factors Affecting Future Operating Results

Possible Challenges to Success

   We May Not Be Successful in Marketing the MCM Product

     In January 2001, we formally  introduced  Manufacturing  Change  Manager TM
("MCM"), a software program that allows all members of the manufacturing  supply
chain to communicate  and collaborate  using the Internet as a fully  integrated
and automated system.

     Our future  depends on our ability to enhance and expand the  existing  MCM
product,  and to introduce  new products as technology  allows.  There can be no
assurance  that we will be successful in marketing the MCM product.  We may also
experience  release delays that are costly, can harm our business and can result
in possible litigation. Other possible risks include:

     * Manufacturers resisting change;

     * Companies  and  customers  lacking  cash  due  to  economic  downturn  or
       inflation;

     * Miscalculating  the need for the MCM  product  if  manufacturers  are not
       ready to enjoy the benefits of a fully automated system;

     * Misappropriation of the Company's technology or copyright infringement;

     * Diversion of resources  due to  litigation,  including  propriety  rights
       issues;

     * Proprietary rights issues; and

     * Lack of sale, marketing, and customer support.

     The  Introduction  of a Competing  Product by a Large Company Could Have an
     Adverse Effect on Sales We must deliver our product in the marketplace
before the competition  provides a similar whole solution.  If a competitor with
better name  recognition  were to produce a comprehensive  manufacturing  change
product, it would likely have an adverse effect on our financial condition.

   If We Do Not Establish Our Name in the Industry, Our Business Could Be Harmed

     We are a small,  relatively  unknown  company  and,  as such,  we are a new
player in the  manufacturing  change  marketplace.  There may be  resistance  to
purchasing a product from such a new player  because  there may be concern about
our viability.  If customers resist the idea of having an unknown company supply
their  manufacturing  change needs, such resistance would likely have an adverse
effect on our financial condition.

   If We Do Not Establish a Firm Customer Base, Our Business Could Be Harmed

     If  our  sales  team  is  not   successful  in  closing  sales  with  major
manufacturers, this will have an adverse effect on the overall sales plan and on
the financial condition of the company.


                                       15

<PAGE>

   The Manufacturing Industry May Resist Changing to Our Platform

     Manufacturers  have  invested a lot of money in systems that are already in
place and may resist the idea of a basic platform such as ours,  fearing that it
may not be flexible enough to meet their individual needs. Such resistance would
likely have an adverse effect on our financial condition.

   Product Defects May Harm Our Business

     Like any new  software  product,  the MCM  software may have some "bugs" or
defects  that could  appear  after a company has  purchased  and  installed  the
software.  Such  occurrences  could  have an  adverse  effect  on our  financial
condition because the customer may be unsatisfied, there may be additional labor
costs  incurred  involved in fixing it, and  shipments of other  products may be
delayed.

   A Recession or Economic Downfall Would Harm Our Business

     If a recession or economic downfall continues, it will mean difficult times
for most companies and may have an adverse effect on our financial condition.

     In addition,  terrorist  acts or acts of war (wherever  located  around the
world) may cause damage or  disruption  to our  business,  employees,  supplies,
distributors  and resellers,  and customers that could have an adverse effect on
our operations and financial results.

   Risks of Our International Sales Could Harm Our Business

     While we continue to market our products to the international market, there
are a number of risks inherent in dealing with foreign companies.  Some of those
risks include:

     * Economic recessions and political instability;

     * Exchange rate fluctuations;

     * Extended accounts receivables and difficulty collecting;

     * Difficulty in managing both sales representatives and distributors;

     * Unexpected changes in regulatory requirements;

     * Reduced or limited protection for intellectual property rights;

     * Export license requirements and documentation; and

     * Tariffs and possible adverse tax consequences.

   Our Future  Operating  Results Are Expected to  Fluctuate  and We Depend Upon
   Timely Project Completion

     Our  operating  results  have  fluctuated  in the past and are  expected to
fluctuate  significantly  on a  quarterly  and  annual  basis in the future as a
result of a number of factors including:

     * the size and timing of customer orders;

     * the length of our sales cycle;

     * the timing of new product  announcements  and introductions by us and our
       competitors;

     * our ability to  successfully  develop,  introduce and market new products
       and product enhancements;

     * market acceptance of our products;

     * the cancellation or delay of orders from major customers;

     * the level of changes to customer  requirements  due to  specific  changes
       requested by customers;

     * our  ability  to  retain  our  existing  personnel  and  hire  additional
       personnel; and

     * general economic conditions.

     These  and  other  factors  could  have a  material  adverse  effect on our
business, operating results and financial condition.


                                       16

<PAGE>

     In addition,  our contracts may generally be canceled without cause, and if
a customer cancels or delays performance under any such contracts, our business,
operating  results  and  financial  condition  could  be  materially   adversely
affected.

     A customer's  license of our products may involve a significant  commitment
of capital with the attendant delays  frequently  associated with  authorization
procedures for capital expenditures within customer organizations. Our operating
expenses  will be based  in part on our  expectations  of  future  revenue  from
product licenses.  Accordingly,  if we do not realize our expected revenues, our
business,  operating  results,  and  financial  condition  could  be  materially
adversely affected.

     Any  significant  growth of our business and expansion of our customer base
would place a significant  strain on our management and  operations.  Our future
success will depend on our ability to identify, attract, hire and retain skilled
employees and to hire replacements for employees that leave us.

     From time to time, we expect to evaluate  potential  acquisitions  to build
our expertise. There can be no assurance that:

     * we will be able to identify attractive acquisition candidates;

     * that we will be able to successfully complete any such acquisition; or

     * that we will be able to  integrate  any  acquired  company with our other
       operations.

     In connection with potential acquisitions,  the failure to successfully and
efficiently  integrate new employees and operations of the acquired company with
our existing  employees  and  operations or to  successfully  manage an acquired
company could materially  adversely effect our business,  operating results, and
financial condition.

     We  Depend Upon Continuous Product Development and Have the Risk of Product
Delays.

     Our customers are subject to:

     * rapid technological change;

     * frequent introductions of new products;

     * short product life cycles;

     * changes in customer demands and requirements; and

     * evolving industry standards.

     We Depend on Key Personnel

     Our business  depends in significant  part on the continued  service of our
executive  officers and other senior  management  and key  employees,  including
certain technical,  managerial and marketing personnel. The loss of the services
of any of these  individuals  or groups of  individuals  could  have a  material
adverse effect on our business,  operating results and financial condition. None
of our executive  officers has an employment  agreement with us. We believe that
our  future  business  results  will also  depend in  significant  part upon our
ability to identify,  attract,  motivate and retain  additional  highly  skilled
technical,  managerial  and  marketing  personnel and to hire  replacements  for
employees that leave us. Competition for such personnel in the computer software
industry  is  intense.  There  can be no  assurance  we  will be  successful  in
identifying,  attracting and retaining such personnel,  and the failure to do so
could have a material  adverse  effect on our  business,  operating  results and
financial condition.

     Our Share Price Is Volatile

     Since our initial  public  offering in April 1998,  the market price of our
Common  Stock has been  highly  volatile  and is  expected  to be  significantly
affected by factors such as:

     * actual or anticipated fluctuations in our operating results;

     * our failure to meet or exceed published earnings estimates;

     * changes  in earnings estimates or recommendations by securities analysts;

     * announcements of technological innovations;


                                       17

<PAGE>

     * new  products  or  new  contracts  by us or  our  existing  or  potential
       competitors;

     * developments with respect to patents, copyrights or proprietary rights;

     * adoption of new accounting standards affecting the software industry; and

     * general market conditions.

     In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have particularly  affected the market prices
for the common stocks of technology  companies,  which have often been unrelated
to the operating performance of such companies.  These broad market fluctuations
may materially adversely affect the market price of our Common Stock.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     We  develop  products  in  the  United States and sell them worldwide. As a
result,  our  financial  results could be affected by factors such as changes in
foreign  currency exchange rates or weak economic conditions in foreign markets.
We  currently  have  funds  in  foreign  currency,  which are translated to U.S.
dollars.  Hence,  strengthening  of  the  dollar may result in a decrease in the
value when converted to U.S. dollars.

     Interest  income is  sensitive  to  changes  in the  general  level of U.S.
interest rates, particularly since our investments are in short-term instruments
calculated at variable rates.

     We  have  established   policies  and  business  practices   regarding  our
investment  portfolio to preserve principal while obtaining  reasonable rates of
return without significantly increasing risk. We place our investments with high
credit  quality  issuers  according  to our  investment  policy.  We do not  use
derivative financial  instruments in our investment  portfolio.  All investments
are carried at cost,  which  approximates  market value.  Due to the  short-term
nature of our investments and the immaterial  amount of our debt obligation,  we
believe that there is no material exposure to interest  fluctuation.  Therefore,
no accompanying table has been provided.


                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


Other Litigation

     On September 23, 1999, a lawsuit entitled Lesley Nemeth v. Aspec Technology
Inc.,  was  filed in  Superior  Court,  County of Santa  Clara  No.  DC  383204.
Plaintiff  is a former  consultant  to the  Company  who seeks in her  complaint
damages in the sum of $12,600 plus interest and attorneys' fees. On November 23,
1999, the court ordered the matter to binding  arbitration  administered  by the
American Arbitration  Association  ("AAA").  Plaintiff led her arbitration claim
with the AAA on or about March 2, 2000. An  arbitrator  was  appointed,  and the
arbitration was scheduled for September 8, 2000. The court case was dismissed by
the court for  failure  by the  plaintiff  to  appear at an  arbitration  review
conference.  Plaintiff has filed a motion to vacate the dismissal,  which motion
was granted by the court  following a hearing on January  23,  2001.  The matter
remains  in  private  arbitration  before  the  AAA.  The  arbitration  date was
rescheduled  for January 28,  2002,  at which time the  arbitration  hearing was
held.  On February  12,  2002,  the  arbitrator  rendered  an award  denying Ms.
Nemeth's  claim,  and  ordering  each  party  to pay one half of the  costs  and
expenses of arbitration.


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<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
   (a) Exhibits

  Exhibit
   Number             Description of Document
-----------   --------------------------------------
  10.9        Lease Agreement Related to Corporate
              Headquarters by and between Ingenuus
              Corporation and Greenville Investors,
              L.P. dated March 2001

  10.10       Severance Agreement by and between
              Ingenuus Corporation and Employee
              dated December 21, 2000

   (b) Reports on Form 8-K

   None.


                                   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, thereunto duly authorized.


                                        INGENUUS CORPORATION


                                        BY: /s/ Randy Singh
                                           ------------------------------------

                                           Randy Singh

                                           Chief Financial Officer


Date: April 15, 2002

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