**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

** **

**FORM 10-KSB/A**

**(Amendment No. 1)**

 

**ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIESEXCHANGE ACT OF 1934**

 

**For the fiscal year ended June 30, 2003**

 

**Commission File number: 0-24974**

 

| **DiaSys Corporation**                                                   |
|--------------------------------------------------------------------------|
| (Exact  name of small business issuer as specified in its charter)       |
|                                                                     |   |   |
| **Incorporated in Delaware**                                             |   | **IRS Employer ID #** |
| **81 West Main Street**                                                  |   | **06-1339248** |
| **Waterbury, CT 06702**                                                  |   |   |
| **(203) 755-5083**                                                       |   |   |
|                                                                     |   |   |
| Securities registered under  Section 12(b) or 12(g) of the Exchange Act: |
|                                                                     |   |   |
| **Title of each class:**                                                 |   | **Name of each exchange on which registered** |
|                                                                     |   |   |
| Common Stock, $0.001 par value                                           |   | American  Stock Exchange |

 

Check whether the issuer (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days: Yes   ý             NO  o

 

Check if there is no disclosure ofdelinquent filers in response to Item 405 of Regulation S-B is not contained inthis form, and no disclosure will be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated by referencein Part III of this Form 10-KSB or any amendment to this Form10-KSB.  o

 

Registrant’s revenues for the mostrecent fiscal year were $ 2,711,263.

 

As of October 6, 2003, the aggregatemarket value of the registrant’s voting stock held by non-affiliates was$9,065,427 based upon the closing price of $0.73 on such date.

 

As of October 6, 2003, theRegistrant had 12,418,393 shares of common stock outstanding.

 

 

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PARTIII

 

ITEM 9 - DIRECTORS AND EXECUTIVEOFFICERS OF THE REGISTRANT

 

**Changein Composition of Board of Directors**

 

OnDecember 18, 2002, Mr. Morris Silverman, the current Chairman of the Company’sBoard of Directors, together with thirty-six (36) other shareholderscollectively owning approximately 41% of the Company’s outstanding Common Stock(the “Group”), filed a Schedule 13D with the Securities and Exchange Commissionannouncing the Group’s intention to effect a proxy contest to effect a changein the composition of the Company’s Board of Directors.  On January 21, 2003, the Company announced thatit reached an agreement with the Group. The Company’s special committee ofindependent directors recommended the agreement be accepted by the Board ofDirectors after determining that the agreement presented the best alternativeof preserving and maximizing shareholder value of the Company.  Under the terms of the Agreement, eachmember of the Company’s then-existing Board of Directors, except Mr. ToddDeMatteo, the Company’s former President and Chief Executive Officer, and Mr.Silverman, resigned and the Group’s director nominees, Sherwin Gilbert, KennethGrossman, Robert Wigoda, Gregory Witchel and Marshall Witzel, were appointed tofill the vacancies effective January 22, 2003. Mr. Morris Silverman wasappointed to serve as the Chairman of the Board.  Additionally, Mr. DeMatteo resigned from his position as ChiefExecutive Officer of the Company, and Mr. Marshall Witzel was appointed as hissuccessor.  On January 28, 2003, Mr.DeMatteo resigned from his position as a member of the Company’s Board of Directorsand from his position as President of the Company.  Subsequently, Mr. Witzel was appointed to serve as President andChief Executive Officer of the Company. On April 1, 2003, Mr. Witchel wasappointed to serve as President of the Company, while Mr. Witzel continued toserve as its Chief Executive Officer. On February 6, 2003, the Company’s Chief Financial Officer, DianeSentner, tendered her resignation to the Company effective February 7, 2003.  Ms. Sentner agreed to work as a consultantto the Company for a transition period through at least March 31, 2003.

 

**Directors and Executive Officers**

 

TheCompany’s Board of Directors currently consists of seven authorizedmembers.  Four members of the Board ofDirectors are “independent” as defined by the American Stock Exchange listingstandards.  The independent directorsare Messrs. Wigoda, Gilbert, Grossman and Bloom.  On September 9, 2003, the Company appointed Mr. Jeffrey Aaronsonto serve as the Company’s Chief Financial Officer.  Currently, Mr. Witzel serves as the Company’s Chief ExecutiveOfficer; Mr. Witchel as the Company’s President; and Mr. Aaronson as theCompany’s Chief Financial Officer.  Setforth below is biographical and other information about the persons whocurrently make up the Company’s Board of Directors and executive officers.

 

**Marshall Witzel**, 76, joined the Company in January2003 as the Company’s President and Chief Executive Officer, and as a member ofthe Company’s Board of Directors. On April 1, 2003, Mr. Witzel resigned his positionas President of the Company but continued to serve as the Company’s ChiefExecutive Officer and member of the Board of Directors.  Mr. Witzel has extensive experience in thehealth care field. He is a degreed bacteriologist with a strong working knowledgeof the increasing demands faced by medical professionals in day-to-day patientcare. From 1989-1996, Mr. Witzel served as President and Senior Consultant ofHollister Corporation, a company which purchased Heelbo, Inc., a health carecorporation founded by Mr. Witzel. From 1973-1989, Mr. Witzel served asPresident and CEO of Heelbo, Inc., a health care product development companyfounded by Mr. Witzel which increased its product line from one product tothirty products by the

 

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time the company wasacquired by Hollister Corporation. Mr. Witzel received his B.S. degree from theUniversity of Illinois in 1949, and his M.B.A. from the University of Chicagoin 1967.

 

**Gregory Witchel**, 43, joined the Company’s Board ofDirectors in January 2003. On April 1, 2003, the Company’s Board of Directorsappointed him President of the Company. Since 1985, Mr. Witchel has served as a principal of Scharff, Witchel& Co., Inc., a firm specializing in the direct private placement of equitysecurities from public issuers to international and domestic institutionalinvestors. Its institutional investors include banks, life insurance companies,investment advisors and mutual funds. Mr. Witchel received his B.S. degree fromIthaca College in 1982, and his M.B.A. from Baruch College C.U.N.Y. in 1988.

 

**Robert Wigoda**, 48,******joined the Company in January 2003 as theCompany’s Secretary and as a member of the Company’s Board of Directors.******Mr. Wigoda is anattorney licensed to practice law in the State of Illinois. He was admitted tothe Illinois bar in November 1979. Since 1989, Mr. Wigoda has been a partner ofWigoda & Wigoda, a law firm in Chicago, Illinois, where he practicesgeneral corporate and commercial real estate law.** **He received his B.S. degree from the University of Illinois,and his J.D. degree at John Marshall Law School.

 

**Morris Silverman**, 71, has served on the Company’sBoard of Directors since November 2002 and currently serves as Chairman of theBoard. Mr. Silverman is the majority owner and Chairman of the Board of M.S.Management Corporation, a private finance company with over 250 branchesnationwide. Mr. Silverman has several years of experience in strategic planningand operations within and outside the medical community. He served as theChairman of Medical Financial Services, Inc., an accounting and receivablefinancing company for the medical profession from 1975 to 1985. Prior thereto,Mr. Silverman served as Vice President of Operations for Petrie Stories, a NewYork Stock Exchange-listed company. Mr. Silverman received a B.S. degree inbusiness administration and accounting from the University of Illinois in 1954.

 

**Sherwin Gilbert**, 60,******joined the Company’s Board of Directors inJanuary 2003.******Mr.Gilbert serves as Vice President-Taxation of Indeck Energy Services, Inc., adeveloper and operator of regeneration power plants. From 1977 to 2002, Mr.Gilbert served as a tax partner of BDO Seidman, LLP, an international publicaccounting firm. Mr. Gilbert received his B.S. degree in accounting fromUniversity of Illinois and his J.D. degree from DePaul University.

 

**Kenneth Grossman**, 57,******joined the Company’s Board of Directors inJanuary 2003. Mr. Grossman currently serves as a portfolio manager, analyst anddirector for the Cedar Street Funds. Prior to his involvement with Cedar StreetFunds, Mr. Grossman co-founded the investment advisory firm of HahnHolland & Grossman (subsequently HGT Advisors) in 1983, where he developedan expertise in the management of municipal pension plans. Mesirow Financialpurchased HGT Advisors in 1996 and retained Mr. Grossman as a SeniorManaging Director. Mr. Grossman co-managed Mesirow Financial’s small-cap equityportfolio and fixed income portfolio, as well as being involved with marketingefforts and client-servicing on behalf of Mesirow Financial. In addition, Mr.Grossman has lectured at Roosevelt University and was an advisor to the PensionFund Committee for the State of Illinois Governor’s Commission.  Mr. Grossman received his B.S. degree infinance, *cumlaude*, in 1968 from the University of Miami, and his M.B.A. degreein finance and economics from the University of Chicago in 1970.

 

**Howard Bloom**,****48,was appointed to the Company’s Board of Directors on August 8, 2003. Mr. Bloom,J.D., C.P.A., is currently a partner at Kipnis, Rosen and Bloom and is a formerboard member of CBC Bancorp and Capital Bank & Trust with oversight of a$50

 

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million portfolio.

 

**Jeffrey Aaronson**, 47, joined the Company in June2003 and was appointed Chief Financial Officer by the Board on August 8,2003.  Mr. Aaronson was most recentlythe Vice President of Finance and Operations for Ergo Systems Inc, a manufacturerof ergonomic computer accessories.  Inaddition to his finance responsibilities, Mr. Aaronson oversaw allmanufacturing and customer support operations. Prior to his nineteen years of experience in the private sector, Mr.Aaronson spent six years as a senior auditor for public accounting firms in NewYork City.  Mr. Aaronson received hisB.B.A. degree in accounting from Adelphi University in 1979.

 

**Section 16(a) Beneficial Ownership Reporting Compliance**

 

Ownershipof, and transactions in, the Company’s stock by its executive officers anddirectors are required to be reported to the Securities and Exchange Commissionpursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended.Based on the Company’s records and other information, the Company believes thatall filings required under Section 16(a) were timely filed, except for thefollowing transactions:  (i) On June 30,2003, Mr. Gregory Witchel received a total of 375,000 shares of common stockupon the conversion of certain promissory notes.  Mr. Witchel failed to timely file a Form 4 for such transactionand instead disclosed the conversion on a Form 5 for the fiscal year ended June30, 2003, which was filed on July 9, 2003; (ii) On May 1, 2003 and June 30,2003, Mr. Marshal Witzel received an aggregate of 379,548 shares of commonstock upon the conversion of certain promissory notes.  Mr. Witzel failed to timely file a Form 4for such transactions and instead disclosed the conversions on a Form 5 for thefiscal year ended June 30, 2003, which was filed on July 9, 2003; and (iii) OnMay 1, 2003 and June 30, 2003, Mr. Morris Silverman received an aggregate of988,874 shares of common stock upon the conversion of certain promissorynotes.  Mr. Silverman failed to timelyfile a Form 4 for such transactions and instead disclosed the conversions on aForm 5 for the fiscal year ended June 30, 2003, which was filed on July 9,2003.

 

ITEM 10 - EXECUTIVE COMPENSATION

 

The following table sets forth compensationinformation for any person serving as the Company’s Chief Executive Officerduring the fiscal year ended June 30, 2003, and any other executive officer whoreceived compensation in excess of $100,000 during the fiscal year ended June30, 2003.  During the fiscal year endedJune 30, 2003, Messrs. Todd DeMatteo and Marshall Witzel served as theCompany’s Chief Executive Officer and no other executive officer receivedcompensation in excess of $100,000.

** **

**Summary Compensation Table**

** **
|                                     |   |     |   | **Annual  Compensation** |    | **Long-Term  Compensation** |   |
|------------------------------------------|--------|----------|--------|--------------------------|---------|-----------------------------|--------|
| **Name and Position**                    |   | **Year** |   | **Salary**               |    | **Bonus**                   |   | **Other  Compensat  ion ($)** |   | **Option  Awards  (#)** |   | **LTIP  Payou  t ($)** |   | **All Other  Compensati  on ($)** |   |
|                                     |   |     |   |                     |    |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Todd M. DeMatteo  President, CEO         |   | 2003     |   | $                        | 167,287 |                        | $      | 0.00 |   | $ | 0.00 |   | — |   | $ | 0.00 |   | $ | 0.00 |   |
|                                     |   | 2002     |   | 250,000                  |    | $                           | 0.00   |   | $ | 0.00 |   | 75,000 | (3) | 0.00 |   | 0.00 |   |
|                                     |   | 2001     |   | 212,500                  |    | 80,000                      | (1)    | 29,464 | (1),(2) | 50,000 | (4) | 0.00 |   | 0.00 |   |
|                                     |   |     |   |                     |    |                        |   |   |   |   |   |   |   |   |   |
| Marshall Witzel  Chief Executive Officer |   | 2003     |   | 0.00                     | (5)     | 0.00                        |   | 0.00 |   | — |   | 0.00 |   | 0.00 |   |

** **

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(1) Represents incentive compensation earned byMr. DeMatteo in years 1999 and 2000 under the terms of an employee agreement inconnection with the establishment of the Allegiance Healthcare Plan Agreement,expansion of business relationships between the Company and Hua Sin ScienceCo., Ltd. in Guangzhou, China and achievement of certain other objectives.

 

(2) Represents incentive compensation earned byMr. DeMatteo in 2001 under the terms of an employment agreement effectiveJanuary 1, 2001 in connection with the establishment of a strategic cooperativeselling plan with Bayer Corporation.

 

(3) Represents 50,000 shares under theCompany’s 2000 Incentive Stock Option Plan and 25,000 shares under theCompany’s 2000 Non-Qualified Stock Option Plan.  Pursuant to the plans, to the extent these options were notexercised as of 60 days from January 28, 2003, the date Mr. DeMatteo resigned,these options have been forfeited and are no longer outstanding.

 

(4) Represents 50,000 shares under theCompany’s 2000 Incentive Stock Option Plan.  Pursuant to the plan, to the extent these options were notexercised as of 60 days from January 28, 2003, the date Mr. DeMatteo resigned,these options have been forfeited and are no longer outstanding.

 

(5) The Company does not have awritten employment agreement with Mr. Witzel. When Mr. Witzel was appointed to serve as Chief Executive Officer, theCompany had an oral agreement with Mr. Witzel whereby Mr. Witzel's annualsalary would be $150,000.  Subsequently,the Company instituted measures to control expenditures.  In connection with these measures, Mr.Witzel agreed to forego his salary. Accordingly, Mr. Witzel does not receive a salary from the Company.  Mr. Witzel is, however, eligible to receiveincentive compensation at the discretion of the Company's Board of Directors.

 

**Stock Option Grants During Fiscal Year 2003**

 

Nostock options were granted to any named executive officer during the fiscalyear ended June 30, 2003.

** **

**Aggregated Option Exercises in Fiscal Year2003 and Year-end Option Value**

 

Nonamed executive officer exercised any stock options during the fiscal yearended June 30, 2003.

 

**Compensation of Directors**

 

Currently,directors are not compensated for attending Board or Committee meetings. Theyare, however, reimbursed for expenses incurred for attendance.  In the future, the Board of Directors mayadopt a compensation policy for its members.

 

**Employmentand Severance Agreements**

 

TheCompany had an employment agreement with Mr. Todd DeMatteo, its formerPresident/Chief Executive Officer.  Theagreement was for a one-year term effective January 1, 2002.  Under the terms of the agreement, Mr.DeMatteo was required to devote substantially all of his professional time toperforming the duties defined in his agreement or as such duties may from timeto time be modified by the Company.

 

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Additionally, Mr. DeMatteo could beterminated for “Cause” and “Without Cause” and was entitled to participate inany and all employee benefits programs and/or plans sponsored by the Companyincluding, but not limited to, stock option plans, stock bonus plans, profitsharing plans and other such programs as and if adopted.  As a condition to his employment, Mr.DeMatteo was (a) required to keep in confidence and trust all proprietaryinformation of the Company; (b) required not to use or disclose the proprietaryinformation of the Company or anything related to it without the prior writtenconsent of the Company; and (c) pledged and warranted that during the term ofemployment with the Company, he would not engage in any activity, employment,consultation, or otherwise which directly or indirectly competes with thebusiness of the Company. Additionally, the agreement contains a provision whichprovides that in the event that Mr. DeMatteo is terminated due to anacquisition, merger or certain types of changes in control of the Company, heis entitled to receive severance compensation in an amount equal to two andone-half times (21⁄2) the amount of compensation received in the twelve (12)month period immediately preceding the effective date of such change. Throughthe term of the agreement, Mr. DeMatteo’s base compensation was fixed at$250,000 per year.

 

Mr.DeMatteo alleges that the Group’s filing of the Schedule 13D on December 18,2002 triggered his termination and constituted a “change in control” under hisemployment agreement entitling him to a severance payment equal $875,000.

 

In March2003, Mr. DeMatteo commenced legal proceedings in Connecticut Superior Courtseeking damages in the amount of $875,000 for breach of Mr. DeMatteo’sExecutive Employment Agreement with the Company.  The Company arranged to have such proceedings stayed pendingarbitration of the amounts in question as required by the terms of the agreement.  Mr. DeMatteo subsequently commenced anarbitration proceeding against the Company relating to the same subjectmatter.  An arbitrator has beenappointed; however, no hearings have been held or scheduled.

 

InAugust 2003, Mr. DeMatteo again sought preliminary relief in the ConnecticutSuperior Court by the filing of a Motion for Order Pendente Lite in Aid ofArbitration seeking attachments of assets of the Company in anticipation of anaward in such arbitration proceeding. On October 15, 2003, the Company receivednotice that the Court ordered a general attachment of assets of the Company inthe amount of $575,000.  The Company isappealing such order and intends to apply to the Court for a stay of execution pendingsuch appeal.  The Company has beenadvised by counsel that such order is not indicative of actual outcome of thepending arbitration.  The Companybelieves that it has meritorious defenses that it will vigorously pursue.

 

The Companydoes not have a written employment agreement with Mr. Witzel.  When Mr. Witzel was appointed to serve asChief Executive Officer, the Company had an oral agreement with Mr. Witzelwhereby Mr. Witzel's annual salary would be $150,000.  Subsequently, the Company instituted measures to controlexpenditures.  In connection with thesemeasures, Mr. Witzel agreed to forego his salary.  Accordingly, Mr. Witzel does not receive a salary from theCompany.  Mr. Witzel is, however,eligible to receive incentive compensation at the discretion of the Company'sBoard of Directors.

 

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ITEM 11 - SECURITY OWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following tableshows how much of the Company’s Common Stock is beneficially owned by: (i) eachof the Company’s directors; (ii) each of the Company’s named executiveofficers; and (iii) each person (or group) known to the Company to be thebeneficial owner of more than 5% of the Company’s Common Stock. Thisinformation is as of October 24, 2003. 

 
| **Name**                                                                                               |   | **Number of Shares** |   | **Percentage of  Ownership (1)** |   |
|--------------------------------------------------------------------------------------------------------|--------|----------------------|--------|----------------------------------|--------|
| ***Directors and current executive officers***                                                         |   |                 |   |                             |   |
| Marshall  Witzel (2)                                                                                   |   | 613,348              |   | 4.94                             | %      |
| Robert  Wigoda (3)                                                                                     |   | —               |   | —                           |   |
| Sherwin  Gilbert (4)                                                                                   |   | 50,000               |   | 0.40                             | %      |
| Kenneth  Grossman (5)                                                                                  |   | 61,700               |   | 0.50                             | %      |
| Morris  Silverman (6)                                                                                  |   | 2,366,130            |   | 19.05                            | %      |
| Gregory  Witchel (7)                                                                                   |   | 375,000              |   | 3.02                             | %      |
| Howard  Bloom (8)                                                                                      |   | 130,000              |   | 1.04                             | %      |
|                                                                                                   |   |                 |   |                             |   |
| ***Executive officers and directors as a  group (7 persons)***                                         |   | 3,241,830            |   | 25.74                            | %      |
|                                                                                                   |   |                 |   |                             |   |
| ***Named Executive Officers***                                                                         |   |                 |   |                             |   |
| Todd  DeMatteo (9)                                                                                     |   | 630,666              |   | 5.08                             | %      |
|                                                                                                   |   |                 |   |                             |   |
| ***Other shareholders known by the Company  to hold more than 5% of the Company’s Common Stock*** |   |                 |   |                             |   |
|                                                                                                   |   |                 |   |                             |   |
| Committee  of Concerned Shareholders (10)                                                              |   | 4,398,976            |   | 35.42                            | %      |

 

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(1) Based on there being 12,418,393 shares of Common Stock outstanding as ofOctober 24, 2003.

 

(2)  Mr.Witzel serves as the Company’s President and Chief Executive Officer and as amember of the Company’s Board of Directors. His mailing address is 81 West MainStreet, Waterbury, CT 06702-2115.

 

(3)  Mr.Wigoda serves as the Company’s Secretary and as a member of the Company’s Boardof Directors. His mailing address is 444 N. Michigan Avenue, Suite 2600,Chicago, IL 60611.

 

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(4)  Mr.Gilbert’s mailing address is 600 Buffalo Grove Road, Buffalo Grove, IL60089.  Includes 50,000 shares that areissuable to Mr. Gilbert upon the conversion of a $20,000 convertible promissorynote issued by the Company to Mr. Gilbert on May 23, 2003, at a conversion rateof $0.40 per share.

 

(5)  Mr.Grossman’s mailing address is 225 W. Hubbard Street, Suite 600, Chicago, IL60610. Mr. Grossman beneficially owns the shares through the Kenneth S.Grossman IRA.

 

(6)  Mr.Silverman serves as Chairman of the Board of Directors.  His mailing address is c/o MS Management,790 Estate Drive, Suite 100, Deerfield, IL 60015.  Includes 1,377,256 shares are owned by the Silverman FamilyTrust.  Mr. Silverman is trustee of theSilverman Family Trust.

 

(7)  Mr.Witchel’s mailing address is DiaSys Corp., 81 W. Main St., Waterbury, CT 06702.

 

(8)  Mr.Bloom’s mailing address is 5550 W. Touhy, Skokie, IL 60077.  Includes 125,000 shares that are issuable toMr. Bloom upon the conversion of a $50,000 convertible promissory note issuedby the Company to Mr. Bloom on September 2, 2003, at a conversion rate of $0.40per share.

 

(9)  Mr.DeMatteo served as the Company’s Chief Executive Officer and President untilJanuary 28, 2003.  Mr. DeMatteo’smailing address is 2 Mountain Spring Road, Farmington, CT 06032.

 

(10)  The Committee of Concerned Shareholders is a group ofshareholders who joined together to effectuate the change in composition of theCompany’s Board of Directors.  See thesection entitled, “Change in Composition of the Board of Directors.”  The Group consists of 37 shareholders of theCompany.  Collectively, theseshareholders own 3,241,830 shares, representing approximately 25.74% of theCompany’s outstanding Common Stock. Messrs. Silverman, Witzel and Grossman are members of the Group. TheGroup’s mailing address is c/o MS Management, 790 Estate Drive, Suite 100,Deerfield, IL 60015.

 

ITEM 12 - CERTAIN RELATIONSHIPS ANDRELATED TRANSACTIONS

 

On October 11,2002, Mr. DeMatteo loaned the Company $53,500. On December 16, 2002, Mr. DeMatteoloaned the Company an additional $46,500. On December 20, 2002, Mr. DeMatteoand the Company executed a promissory note for a principal amount of $100,000to evidence the loans. Under the terms of the promissory note, interest accrueson the unpaid principal balance at a rate of 6% (changing to a rate of 12% ifthe note is not timely paid), and the note matures on January 31, 2003. Thenote is secured by all of the assets of the Company.  In March 2003, Mr. Todd DeMatteo, the former President and Chief ExecutiveOfficer of the Company, commenced legal proceedings against the Company inConnecticut Superior Court for collection of the $100,000 promissory note plusinterest, late fees and costs of collection. Although the Company has questioned the circumstances of such loan, theCompany has nevertheless elected not to defend such legal proceedings and it isexpected that judgment has entered or will enter against the Company in theamount of approximately $123,000.

 

In January andFebruary 2003, Mr. Silverman, the Company’s Chairman of the Board, loaned theCompany an aggregate of $340,000.  Theloans were evidenced by unsecured demand promissory notes, each bearinginterest at 8%.  On May 1, 2003, Mr.Silverman converted the promissory notes and all interest accrued thereon intoa total of 863,874 shares of the Company’s common stock.  Additionally, in May 2003, Mr. Silvermanloaned the Company $50,000.  The loanwas evidenced by an unsecured convertible promissory note, bearing interest at8% and convertible into shares of the Company’s common stock at any time at$0.40 per share.  On June 30, 2003, Mr.Silverman converted this note and into 125,000 shares of the Company’s commonstock.

 

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In February 2003,Mr. Marshall Witzel, the Company’s President and Chief Executive Officer,loaned the Company $100,000. The loan was evidenced by an unsecured demandpromissory note. Interest accrued on the unpaid principal balance at a rate of8% per annum.   On May 1, 2003, Mr.Witzel converted the promissory note and all interest accrued thereon into atotal of 254,548 shares of the Company’s common stock.  Additionally, in May 2003, Mr. Witzel loanedthe Company $50,000.  The loan wasevidenced by an unsecured convertible promissory note, bearing interest at 8%and convertible into shares of the Company’s common stock at any time at $0.40per share.  On June 30, 2003, Mr. Witzelconverted this note and into 125,000 shares of the Company’s common stock.

 

In May 2003, Mr.Gregory Witchel, the Company’s President, loaned the Company an aggregate of$150,000.  The loans were evidenced bypromissory notes.  On June 30, 2003, Mr.Witchel converted the notes into an aggregate of 375,000 shares of theCompany’s common stock.

 

In May 2003, Mr.Sherwin Gilbert, a member of the Company’s Board of Directors loaned theCompany $20,000.  The loan is evidencedby a convertible demand promissory note, bearing interest at 8% per year andconvertible into shares of the Company’s common stock at $0.40 per share.

 

Subsequentto the fiscal year end, in September 2003, Mr. Howard Bloom, a member of theCompany’s Board of Directors loaned the Company $50,000.  The loan is evidenced by a convertibledemand promissory note, bearing interest at 8% per year and convertible intoshares of the Company’s common stock at $0.40 per share.

 

ITEM 15 – PRINCIPAL ACCOUNTANT FEESAND SERVICES

 

The following table presents fees forprofessional audit services rendered and fees billed for other servicesrendered by Deloitte & Touche, LLP and Wiss & Company for the fiscalyears ended June 30, 2003 and 2002, respectively:

 
|               |   | **June 30, 2003** |    | **June 30, 2002** |   |
|--------------------|--------|-------------------|---------|-------------------|--------|
| Audit Fees         |   | $                 | 92,334  |              | $      | 96,000 |   |
| Audit-Related Fees |   | —            |    | —            |   |
| Tax Fees           |   | $                 | 20,081  |              | $      | 8,200 |   |
| All Other Fees     |   | $                 | 40,000  |              | — |   |
| *Total Fees:*      |   | $                 | 152,415 |              | $      | 104,200 |   |

 

***AuditFees***. This category includes fees paid for the audit of our annualfinancial statements and review of financial statements included in ourquarterly reports on Form 10-QSB.  Thiscategory also includes advice on audit and accounting matters that aroseduring, or as a result of, the audit or the review of our interim financialstatements, including the application of proposed accounting rules and thepreparation of an annual “management letter” containing observations anddiscussions on internal control matters.

*** ***

***Audit-RelatedFees.***  Deloitte & Touchedid not perform any services in this category for the Company during the fiscalyear ended June 30, 2003. Wiss & Company did not perform any services inthis category for the Company during the fiscal year ended June 30, 2002.

*** ***

***TaxFees.***  This category consistsof professional services rendered by Deloitte & Touche for tax complianceand tax advice for the fiscal year ended June 30, 2003 and by

 

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Charles Heaven & Company for the fiscalyear ended June 30, 2002.  Wiss &Company did not perform any tax services for the Company during the fiscal yearended June 30, 2002.  The services forthe fees disclosed under this category include tax advisory services associatedwith the Company’s ongoing business and business ventures.

*** ***

***All Other Fees***.  This category consists of forensicaccounting and re-audit services rendered by Deloitte & Touche for thefiscal year ended June 30, 2003.  Wiss& Company did not perform any services in this category for the Companyduring the fiscal year ended June 30, 2002.

 

SIGNATURES

 

In accordance with Section 13 or15(d) of the Securities Exchange Act of 1934, the Registrant has duly causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 
| Dated October 29, 2003 | DiaSys Corporation                       |
|------------------------|------------------------------------------|
|                   |                                     |
|                   | By: Marshall Witzel                      |   |
|                   | Marshal Witzel, Chief Executive  Officer |

 

In accordance with Section 13 or15(d) of the Securities Exchange Act of 1934, the Registrant has duly causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 
| Dated October 29, 2003 | DiaSys Corporation      |
|------------------------|-------------------------|
|                   |                    |
|                   | By: Jeffrey Aaronson    |   |
|                   | Chief Financial Officer |

 

In accordance with the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the datesindicated.

 
| Marshall Witzel                           |                   |                   |
|-------------------------------------------|------------------------|------------------------|
| Marshall Witzel, Chief Executive  Officer |                   |
| and Director                              | Date: October 29, 2003 |
|                                      |                   |                   |
| Jeffrey Aaronson                          |                   |                   |
| Jeffrey Aaronson                          |                   |
| Chief Financial Officer                   | Date: October 29, 2003 |
|                                      |                   |                   |
|                                      |                   |                   |
| Morris Silverman                          |                   |                   |
| Morris Silverman                          |                   |                   |
| Chairman of the Board                     |                   | Date: October 29, 2003 |
|                                      |                   |                   |
| Robert Wigoda                             |                   |                   |
| Robert Wigoda                             |                   |                   |
| Secretary and Director                    |                   | Date: October 29, 2003 |

 

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| Sherwin Gilbert                |   |                   |
|--------------------------------|--------|------------------------|
| Sherwin Gilbert                |   |                   |
| Director                       |   | Date: October 29, 2003 |
|                           |   |                   |
| Kenneth Grossman               |   |                   |
| Kenneth Grossman               |   |                   |
| Director                       |   | Date: October 29, 2003 |
|                           |   |                   |
| Gregory Witchel                |   |                   |
| Gregory Witchel, President and |   |
| Director                       |   | Date: October 29, 2003 |

 

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