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                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                   FORM 10-K

[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2001 OR

[   ]   TRANSITION  REPORT  PURSUANT TO SECTION 13  OR  15(d)  OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM     TO     .

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

           DELAWARE                                    77-0298386
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
Incorporation or Organization)

    7455 Longard Road, Livermore, CA                      94550
(Address of principal executive offices)                (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (925) 605-2600

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

     TITLE OF EACH CLASS               NAME OF EACH EXCHANGE ON WHICH REGISTERED
     -------------------               ----------------------------------------
Common Stock Par Value $0.001 Per Share                OTCB

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                              Yes   |X|    No   |_|

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein,  and will not be contained to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant,  based upon the closing price of such stock on January 31, 2002,
as reported by the OTCB, was approximately $3.38 million. Shares of Common Stock
held by each  officer and director and by each person who owns 5% or more of the
outstanding  Common Stock have been  excluded in that such persons may be deemed
to be affiliates.  This  determination  of affiliate status is not necessarily a
conclusive determination for other purposes.

     The  number of  outstanding  shares  of the  registrant's  Common  Stock on
January 31, 2002 was 38,623,062.

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                                TABLE OF CONTENTS

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                                     PART I

Item  1. Business ..................................................................     1
Item  2. Properties ................................................................     9
Item  3. Legal Proceedings .........................................................    10
Item  4. Submission of Matters to a Vote of Security Holders .......................    10

                                     PART II

Item  5. Market for the Registrant's Common Equity and Related Stockholder Matters .    11
Item  6. Selected Consolidated Financial Data ......................................    12
Item  7. Management's Discussion and Analysis of Financial Condition and Results of
         Operations ................................................................    13
Item  8. Financial Statements and Supplementary Data ...............................    22
Item  9. Changes in and Disagreements with Accountants on Accounting and Financial
         Disclosure ................................................................    46

                                    PART III

Item 10. Directors and Executive Officers of the Registrant ........................    47
Item 11. Executive Compensation ....................................................    47
Item 12. Security Ownership of Certain Beneficial Owners and Management ............    49
Item 13. Certain Relationships and Related Transactions ............................    50

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K ...........    51
SIGNATURES .........................................................................    53
</TABLE>


                                        i
<PAGE>

     In  addition to  historical  information,  this Annual  Report on Form 10-K
contains  forward-looking  statements.   These  forward-looking  statements  are
subject to certain risks and  uncertainties  that could cause actual  results to
differ  materially  from those  reflected in these  forward-looking  statements.
Factors  that might  cause such a  difference  include,  but are not limited to,
those discussed in the section entitled "Management's Discussion and Analysis of
Financial  Condition  and Results of  Operations"  Readers are  cautioned not to
place undue reliance on these forward-looking statements.

     When used in this Report, the words "expects,"  "anticipates,"  "believes,"
"estimates"  and similar  expressions  are intended to identify  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.
Such forward-looking statements, include:

     *    statements concerning the timing of new product introductions;

     *    the  functionality  and  availability  of products under  development;
          demand for or pricing of the Company's products;

     *    the percentage of export sales; and

     *    sales to key customers.

     These  forward-looking  statements speak only as of the date of this Annual
Report.  The Company  expressly  disclaims  obligation or undertaking to release
publicly any updates or revisions to any  forward-looking  statements  contained
herein to reflect any change in the Company's  expectations  with regard thereto
or to reflect any change in events,  conditions  or  circumstances  on which any
such  forward-looking  statement is based,  in whole or in part.  Readers should
carefully review the risk factors described in other documents the Company files
from  time to time  with  the  Securities  and  Exchange  Commission,  including
Quarterly Reports on Form 10-Q to be filed by the Company in fiscal year 2002.

                                    PART I

ITEM 1. BUSINESS

Introduction:

     Ingenuus  Corporation  ("Ingenuus"  or the  "Company")  designs,  develops,
markets, and supports a family of collaborative manufacturing commerce solutions
that  speed  the  build  process  and  manage   product   content  and  critical
communication and collaboration  across the virtual  manufacturing  network.  In
2001,  the  Company   introduced   Manufacturing   Change   ManagerTM  (MCM),  a
state-of-the-art,   web-based  next-generation  software  solution  that  allows
manufacturers to take control and command of the complete product lifecycle. The
Company is now migrating from a single product focus to multiple  products based
on the  Smart  Expeditor  technology,  which is at the core of the MCM  product.
Today,  the Company is focused on creating and selling this next  generation  of
technology--the  Coordinated  Execution PlatformTM and Smart Suites.TM These new
products  address  our  customer's  need for  Smart  Solutions  for  Intelligent
e-Business.

   Introducing Ingenuus

     Our Business Philosophy:

     It is our business  philosophy that even complex  technology should be made
simple,  and not exist merely for its own sake. The Company's name reflects this
business  philosophy.  `Ingenuus,'  the Latin synonym for simple,  translates in
part to the English word "ingenuous," which means "transparent, honest, simple."
This idea of "what you see is what you get"  reflects a fixed  corporate  value,
which  is at the  heart  of  our  business  philosophy  and  reflects  how we do
business.


                                        1
<PAGE>

Clients and Partners

     Many  world-class  manufacturing  companies have bought MCM, and started to
enjoy the  benefits of taking  control  and command of the entire  manufacturing
process. Among these customers are:

     *    ABB, Catalyst;

     *    Agere;

     *    Invensys;

     *    Sanmina;

     *    Teledyne.

     Ingenuus has also established  partnerships  with such top industry leaders
as Perot  Systems.  In  addition,  the  Company is a member of the  Supply-Chain
Council,  an industry  organization  established in 1996 to create standards and
improve supply chain processes among manufacturers,  suppliers, distributors and
retailers.

CE Platform

     The Ingenuus Coordinated Execution (CE) Platform,TM is a unique,  Web-based
solution for automating  business  processes.  The platform  combines  Web-based
technology  with  extensive   collaboration   services,   a  suite  of  packaged
integrations,  and a suite of adaptable business applications.  This approach to
business  process  automation  allows  companies to automate and integrate their
processes quickly and affordably,  and to modify processes instantly in response
to changing  conditions--enabling them to increase efficiencies and to achieve a
fast return on their technology investment. In addition, the platform simplifies
data  transformation  and legacy  interfaces  by  eliminating  low-level  custom
coding.

     Until  now,  most  business  process  automation  offerings  have been mere
toolkits.  These toolkits require expensive and time-consuming  low-level custom
coding  to  implement   collaborative  business  processes  and  connections  to
applications, resources, and trading partners. With the CE Platform, Ingenuus is
making the automation of  collaborative  business  processes easier to implement
and less expensive to maintain and extend than ever before. Our technology gives
companies the infrastructure, tools and applications to collaborate in real-time
so they can manage, optimize and change their business processes  globally--and,
ultimately,  get their  products to market more  efficiently.  Ingenuus'  unique
technology  automates  complete  processes,  and can be implemented  quickly and
affordably.

     This  new  technology  is  the  backbone  of  the  Ingenuus  Value  Network
PortfolioTM,  a  combination  of technology  and services for the  Collaborative
Product Commerce (CPC) and Product  Lifecycle  Management (PLM) markets.  Unlike
Product  Data  Management  (PDM)  solutions  that  deliver  only an estimated 20
percent of the  functionality  required for a CPC/PLM  solution and take several
years to implement,  the CE Platform comes with best-practices process templates
designed   for   particular   business   solutions,   which   allow   for  rapid
implementation.

Major features of the CE Platform are:

     *    The Smart  Expediter  Ingenuity task flow engine  monitors and manages
          automated  processes.  The  Smart  Expediter's   administration  tools
          provide  easy-to-use  graphical  interfaces for the  specification and
          maintenance of business process models;

     *    Smart Suites, which is an array of adaptable business applications;

     *    The  Smart   Integration   Gateway,   which   provides   process-based
          integration of enterprise applications, data, and middleware;

     *    Smart Gates, which is a suite of packaged integrations or adapters for
          popular enterprise systems;

     *    Powerful  workflow  capabilities  that include  alerting,  escalation,
          tracking and management; and

     *    A  browser-based  inbox for easy and  efficient  management of process
          tasks.


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Benefits

     The CE Platform enables companies to:

     *    Coordinate execution of business processes globally, across the entire
          Value Chain;

     *    Command, control, and force action;

     *    Implement world-class solutions faster, and for less;

     *    Achieve  a  significant  competitive  advantage  through  productivity
          improvements and cost reductions;

     *    Accelerate product innovation, introduction and improvement;

     *    Detect and correct process inefficiencies and quality issues;

     *    Establish and extend product  lifecycle  processes that can accurately
          model their businesses;

     *    Reduce  scrap  and   significantly   enhance   overall   manufacturing
          efficiency.

How the CE Platform and Smart Suites work

     Using  Ingenuus's  state-of-the-art  CE  Platform  and  Smart  Suites,  all
departments,  divisions and members of a business can work together  through the
Internet  at the same  optimized  pace and  speed,  using a single,  interactive
system.

     Ingenuus's  technology is used extensively by Original Equipment  Companies
(OEMs),  Contract Manufacturing Service (CMS) providers,  and product assemblers
in a wide  range of  industries--and  by the  customers  and  suppliers  of such
companies.  The technology  enables all the  participants in the supply chain to
communicate  in real time and  automate  virtually  any business  process.  As a
result, and as an example, companies dealing with the product lifecycle can take
control  of  the  design,  documentation,   supply,  performance  and  execution
processes,  and take command by systematically managing product lifecycle change
from  beginning to end. The CE Platform and Smart Product  Chain Manager  handle
all  types of change  initiated  from  almost  any  point in the  supply  chain,
including:

     *    Manufacturing change order (MCO);

     *    ISO change request/order (ICR/ICO);

     *    Engineering change request/order (ECR/ECO);

     *    Customer change request/order (CCR/CCO);

     *    Supplier change request/order (SCR/SCO);

     *    Employee change request (ECR);

     *    Variation change order (VCO);

     *    Cost of change (COC).

The CE Platform and Smart Product Chain Manager  automate  processes for today's
global eCommerce industries.

     Because  products change faster than ever before,  lifecycles once measured
in years are now often measured in months.  This reality has forced companies to
rethink and streamline their change  processes.  Companies that continue to rely
on manual processes are finding themselves overburdened by paperwork and dealing
with increased errors and omissions,  and simply lost in the intensified  cycle.
Worse, they are losing money.

     While 88 percent of  manufacturing  firms have  manual  processes,  product
lifecycles are getting more and more complicated,  and outdated manual processes
are costing  companies  millions of dollars each year to carry on with "business
as usual" and affecting their competitive positions negatively.  For example, in
the  early  manufacturing  stages,  design  teams  can  make  hundreds,  or even
thousands  of design  changes in a day.  When product  changes  were fewer,  the
documentation process was complex, but doable. But now


                                        3
<PAGE>

that products change quickly,  tracking the steps in the design process alone is
very  difficult.  It is also too costly,  both in time and money.  The  industry
average  cost of  managing  a  single  paper-based  change  request  is  $2,500,
according to InformationWeek.

New tools for today's global economy

     The bottom line is that old tools don't work in today's new global economy.
During  the last  thirty  years  manufacturing  models  have  sought to  improve
productivity and profitability  through operational  efficiencies alone. The new
paradigm  requires  companies to accept the  inevitability  that solely pursuing
operational  efficiency in order to improve productivity and profits is just not
good enough.  Only so much efficiency and yield  improvement can be squeezed out
of   manufacturing.   Eventually  the  law  of  diminishing   returns   appears.
Forward-thinking  companies  are  recognizing  that  the next  big  frontier  in
affecting  bottom-line  profits is  e-business.  As a result,  they are adopting
e-business  initiatives  to improve  processes and make their  enterprises  more
productive and profitable.  Many companies are choosing web-based solutions that
allow  coordinated  execution of  intellectual  production  globally,  instantly
rendering them ahead of their competition.

     The best way to decrease cost and increase profits for a company is through
collaborative   product   commerce  (CPC).   Entire   processes  are  initiated,
negotiated,  approved  and  implemented  in real time over the  Internet  making
commerce, the ability to make money, faster.

The role of the Internet

     Unlike  C-platforms  and  C-toolkits  that  provide  a  costly  system  for
"building"   solutions,   which  are  time   consuming  and  require   extensive
maintenance,  the new  technology and power of the Internet  allows  Ingenuus to
provide cost effective,  pre-packaged  workflow/taskflow  processes right out of
the box.  Every member of the supply chain can send and receive  information  in
real time.  With a push of  button,  facilities  from  Seattle,  Washington,  to
Singapore and Scotland can  instantaneously be notified of new requests,  engage
in instant  collaboration,  authorize  approvals  in any  process,  and  control
implementations   globally.   In  addition  problems  are  quickly   determined.
Bottlenecks  are quickly  recognized.  In essence,  the Internet helps provide a
system of accountability that improves production.

     For  example,  a  typical  problem  in  a  manual  or  partially  automated
manufacturing  process  involves design engineers who pass on a project to other
departments. When tests in the manufacturing process uncover design problems and
return the project for changes,  engineers  are often times  captivated by a new
project  and are slow to  respond  to the  change.  At that  point,  the  design
engineer  becomes a bottleneck  and the  production  line stops.  The results of
interrupted production go directly to a company's bottom line.

     However, when companies use the Internet-based Smart Product Chain Manager,
design  engineers  get notified  quickly,  they can take action  quickly and the
system forces everyone in the global enterprise to move at the same speed.

More benefits of using Smart Suites

     Using Smart  Suites,  companies  can master  their  processes  by assigning
responsibility  and  monitoring and directing both the inbound and outbound flow
of information.

     Since change  management is only a tiny piece of Smart Suites,  the savings
for companies  who use Smart Suites to automate  many of their manual  processes
can even be larger. With Ingenuus's Smart Suites, global organizations can plan,
transact and execute strategies as a cohesive force.

Using  special features of the Smart Product Chain Manager Suite, companies can:

     *    Reduce scrap by  pre-determining  if a change  request is  financially
          feasible and beneficial.  (Making changes without fully  understanding
          the  implications  is a common  and  costly  problem  with  manual and
          electronic "home grown systems");

     *    Shrink  inventory  requirements  by using  Smart  Suites to  implement
          change with the proper timing. Eliminate friction among members of the
          supply chain by allowing  everyone  access to the latest  information,
          providing proper communication channels, and making sure that everyone
          involved is working at the same pace.


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<PAGE>

Other benefits of using other Smart Suites include:

     *    Higher levels of efficiency;

     *    Increase in production;

     *    Reduction in administrative and manufacturing costs;

     *    Better quality products;

     *    Accelerated time to market;

     *    More efficient processes;

     *    Reduction in scrap and wasted inventory;

     *    Greater customer satisfaction;

     *    Accountability at every level of service;

     *    Increased profits;

     *    Flexibility in how processes are managed.

Risk

     Our future  depends on our ability to enhance and expand our  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 litigation. Other possible risks include:

     *    Manufacturers resisting change;

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

     *    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;

     *    Propriety rights issues;

     *    Lack of sales, marketing and customer support.

Sales, marketing and customer support

     We  provide  customers  with  technical  support  as well as  training  and
consulting  services.  We believe  that a high  level of  customer  service  and
support is important to the adoption and successful utilization of our products.
Our customers  typically pay an additional fee for  maintenance  agreements that
entitle them to technical support and periodic product  upgrades.  We also offer
additional training and consulting services on a fee basis.

     Our current  customers  for our products are  principally  located in North
America  and we  expect  potential  sales  growth  in Asia.  We  employ  skilled
engineers and technical sales persons capable of serving the sophisticated needs
of our customers,  both locally and  internationally.  In addition to our direct
sales and marketing efforts, we participate in industry trade shows and seminars
to promote the adoption of our products.

Customers

     The CE Platform and Smart Suites are not limited to bill of material  based
requirements. It can be utilized not only by discrete product manufacturers, but
also  those  in  process  industries  such  as  semiconductor,   pharmaceutical,
chemical, and outage management for nuclear power plants.

     Potential  Smart Suite  customers  can be found around the world,  wherever
manufacturing  takes place.  And though the CE Platform and Smart Suites product
has a global  market,  we will be  focusing  on large  manufacturers  and  their
suppliers in North America.


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<PAGE>

Risks for international business

     While we continue to market our products to the international market, there
are a number of risks  inherent  when 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;

     *    Tariffs and possible adverse tax consequences.

Research and development

     We believe that our future  competitive  position will depend in large part
on our ability to quickly and cost  effectively  develop new products,  maintain
and enhance our current product line,  technologically  maintain competitiveness
and meet an expanding range of customer  requirements.  In fiscal 2001, 2000 and
1999, research and development  expenses for Ingenuus segment were $2.5 million,
$2.6 million and $0, respectively. In fiscal year 2001, research and development
expenses  related to EDA  products  were  $650,000  compared to $1.2  million in
fiscal  year  2000.  As of August  31,  2001,  Verilux,  the EDA  segment of the
company, was discontinued. We expect to continue to devote significant resources
to our various engineering  efforts. To date, all product development costs have
been expensed as incurred.  Our research and development  efforts are focused on
continued enhancement of our Ingenuus products.

     Our  business  and  products  are  subject to rapid  technological  change,
frequent  introductions  of  new  products,  changes  in  customer  demands  and
requirements,  and evolving  industry  standards.  The  introduction of products
embodying  new  technologies  and the  emergence of new industry  standards  can
render existing  products  obsolete and  unmarketable.  Accordingly,  our future
success will depend on our ability to continually  enhance our existing products
and  to  develop  and   introduce   new  products   that  satisfy   increasingly
sophisticated  customer requirements and keep pace with product introductions by
our  competitors.  Any  failure by us to  anticipate  or respond  adequately  to
changes in technology or customer  requirements,  or any  significant  delays in
product development or introduction, would have a material adverse effect on our
business,  operating results and financial condition.  There can be no assurance
that we will be successful in our product development efforts,  that we will not
experience  difficulties that could delay or prevent the successful development,
introduction  and sale of new or enhanced  products or that such new or enhanced
products will achieve market acceptance.  We have in the past experienced delays
in the release  dates of certain of our  products.  If release  dates of any new
significant  products  or  product  enhancements  were  delayed,  our  business,
operating  results  and  financial  condition  would  be  materially   adversely
affected. We could also be exposed to litigation or claims from our customers in
the event we do not satisfy our delivery commitments.  There can be no assurance
that any such  claim will not have a material  adverse  effect on our  business,
operating results and financial condition.

Consulting services

     While MCM and Smart  Product  Chain  Manager  are  expected  to be our main
revenue  source in 2002,  we also  expect to derive  revenue  from  delivery  of
professional services.  Consultants will help clients define and refine internal
change  management  processes,  and help them better leverage their  technology.
Some professional services include:

     *    System architecture and design;

     *    Ingenuus software installation and configuration;


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<PAGE>

     *    Enterprise  Resource  Planning ("ERP")  integration.  (ERP consists of
          large  relational  databases  that  generate  data  based on their own
          language);

     *    Computer Aided Design ("CAD") integration;

     *    Data conversion;

     *    Product training.

     Costs for these  professional  consulting  services are fixed.  The process
involves  a  review  of  the  total  project,   the   development  of  a  phased
implementation   schedule,   and  project  planning  specific  to  the  client's
environment.

Maintenance services

   Ingenuus Maintenance Services

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

Proprietary rights

   Protection of Intellectual Property

     We rely on a  combination  of  copyright,  trade  secrets,  confidentiality
procedures  and  contractual  procedures  to protect our  intellectual  property
rights.  Despite our efforts to protect our intellectual property rights, it may
be possible  for  unauthorized  third  parties to copy  certain  portions of our
products  or  to  reverse  engineer  or  obtain  and  use  technology  or  other
information that we regard as proprietary.  There can also be no assurances that
our  intellectual  property  rights  would  survive a legal  challenge  to their
validity or provide  significant  protection  for us. In  addition,  the laws of
certain countries do not protect our proprietary rights to the same extent as do
the laws of the United  States.  Accordingly,  there can be no assurance that we
will be able to protect our proprietary  technology  against  unauthorized third
party copying or use, which could adversely affect our competitive position.

   Possibility of Infringement Claims

     We may from  time to time  receive  notices  from  third  parties  claiming
infringement  by our  products  of third  party  patent  and other  intellectual
property rights.  We expect that software  products will increasingly be subject
to such  claims as the  number  of  products  and  competitors  in our  industry
segments grow and the functionality of products overlaps. In addition, we expect
to receive more patent  infringement  claims as companies  increasingly  seek to
patent their  software.  Regardless  of its merit,  responding to any such claim
could be  time-consuming,  result in costly  litigation  and require us to enter
into royalty and licensing agreements,  which may not be offered or available on
terms  acceptable to us. If a successful claim is made against us and we fail to
develop or license a substitute technology,  our business, results of operations
or financial position could be materially adversely affected.

Competition

     Competition  from companies that provide change  management  solutions that
address only a portion of the change life cycle can come from  various  existing
markets:

     *    Electronic  Document  Management  companies  such as Documentum and PC
          Docs;

     *    Product Data  Management  companies  such as Windchill,  Metaphase and
          MatrixOne;

     *    Enterprise Resource Management companies such as SAP and Fourth Shift;

     *    Supply Chain Management companies such as Ariba and Manugistics.

Employees

     As of November 30, 2001,  the Company had  forty-one  employees,  including
three in  operations,  twelve in research and  development,  twelve in sales and
marketing and fourteen in finance and administration.  None of our employees are
represented by a collective  bargaining  agreement,  nor have we experienced any
work  stoppage.  The Company  considers its  relations  with its employees to be
good.


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<PAGE>

Executive Officers and Directors

     Our executive officers and directors and their ages as of November 30, 2001
are as follows:

               Name               Age                  Position
               ----               ---                  --------
Michael J. Carroll(1) ..........  58    Chairman of the Board of Directors,
                                          Chief Executive Officer, and President
Randy Singh ....................  32    Chief Financial Officer
Christopher S. Williams ........  43    Chief Technical Officer
David W. Allenbaugh ............  54    Vice President of Marketing
Douglas E. Klint ...............  51    Vice President, Secretary, and General
                                          Counsel
Richard A. Perry ...............  54    Vice President of Operations
John R. Walsh ..................  58    Vice President of Sales
Ronald K. Bell(2)(3) ...........  58    Director
Conrad J. Dell'Oca(1) ..........  60    Director
Tom Recine(1)(2)(3) ............  64    Director
Al Wilson(2)(3) ................  69    Director

------------
(1) Member of the Option Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee

Background of Executive Officers

     Michael J.  Carroll has served as Chairman of the Board since March of 2001
and as President and Chief  Executive  Officer and Director of the Company since
October 1999.  From December 1994 to December  1998, Mr. Carroll served as Group
President and Board member of the Preco Electronics  Division of Preco,  Inc., a
manufacturing  company.  Mr. Carroll also served as President of Sensym, Inc., a
subsidiary  of British Tire and Rubber from July 1992 to December  1994, as well
as President of Advanced  Analog from 1984 to 1992. He previously held positions
of General Manager, V.P. of Operations and V.P. of Sales with Intech and Silicon
General.  Mr.  Carroll  received  a  B.S.  degree  in  Business  and  Industrial
Management from San Jose State University in 1965.

     Randy Singh has served as Corporate  Controller since March 2000, and Chief
Financial  Officer  since  December 1, 2001.  From June 1998 to March 2000,  Mr.
Singh  worked in the audit  group at  PricewaterhouseCoopers.  Prior to  joining
PricewaterhouseCoopers, Mr. Singh also worked in the audit and consulting groups
at Ernst and Young, LLP from February 1996 to June of 1998. Mr. Singh received a
B.S. degree in Accounting from San Francisco State University.

     Christopher S. Williams has served as Chief  Technical  Officer of Ingenuus
since  September  2000. He joined Ingenuus in February 2000 as Vice President of
Marketing.  Prior to joining  Ingenuus,  Mr.  Williams  was Director of Business
Development at Aurigin  Systems from April 1998 to February  2000. Mr.  Williams
also worked as Director of Marketing at SGI Inc.  from  September  1996 to April
1998.

     David W.  Allenbaugh has served as Vice President of Marketing since August
2001.  He joined  Ingenuus in October  1999 as Vice  President  of  Professional
Services.  Mr. Allenbaugh has served as the Vice President of Sales for Ingenuus
between  February 2001 and May 2001.  He also served as Vice  President of Sales
and Marketing at Novo Systems between June 1999 and October 1999. Mr. Allenbaugh
served as Vice  President of Sales at System  Science Inc. from May 1997 to June
1999.  Mr.  Allenbaugh  has a degree in  B.S.E.E.  from  Michigan  Technological
University.

     Douglas  E.  Klint has  served as Vice  President,  Secretary  and  General
Counsel of the Company since August 1998 and Vice President,  Strategic Business
Development  since July 2000. Mr. Klint has also served as Acting  President and
Acting Chief Executive  Officer from January 1999 to October 1999. From December
1994 to August 1998, Mr. Klint served as Vice  President,  Secretary and General
Counsel of GateField  Corporation,  which develops and sells field  programmable
gate arrays. From December 1984


                                        8
<PAGE>

to December  1994,  Mr. Klint served as Vice  President,  Secretary  and General
Counsel  of  Zycad  Corporation,  which  developed  and sold  EDA  hardware  and
software.   Mr.  Klint  received  a  B.A.   degree  in  Economics  and  Business
Administration  from Gustavus  Adolphus College in Minnesota in 1972 and a Juris
Doctor degree from the William Mitchell College of Law in 1976.

     Richard  A. Perry  joined  the  Company in  February  2001 as  Director  of
Technical  Services  and became Vice  President  of  Operations  in May of 2001.
Between  April 1999 and  February  2001,  Mr.  Perry  served as Partner and Vice
President  of  Operations  and  Quality  for  Magnitude-3,   a  manufacturer  of
high-reliability  hybrid  power  supplies for the space  industry.  From 1971 to
1999,  he held  various  positions  with  Advanced  Analog,  a  manufacturer  of
high-reliability  hybrid power  supplies for the  military,  aerospace and space
industries, including Director of Manufacturing, Director of Program Management,
and  Vice  President  of  Quality.  Mr.  Perry  filed  for  personal  bankruptcy
protection  under  chapter  13  within  the past 5  years.  The  bankruptcy  was
subsequently paid off and closed 18 months early.

     John R. Walsh joined the Company as Vice President of Operations in October
1999.  In May of 2001,  Mr. Walsh  accepted  the  position of Vice  President of
Sales.  From  1989  to  1999,  Mr.  Walsh  held  various  positions  with  Zycad
Corporation,  a manufacturer of hardware  accelerators and associated  software,
including  Vice President of  Operations,  and Vice  President of  International
Operations,  and  President  of  Validation  Division.  Mr.  Walsh  attended the
University of Missouri, St. Louis, Business Administration.

     Ronald K. Bell has served on the Board of the Company since March 1999. Mr.
Bell has  served as Vice  President,  Communications  Products  of Micro  Linear
Corporation,  an analog and mixed semiconductor  company,  since June 1999. From
February  1998 to June 1999,  Mr.  Bell was Chief  Executive  Officer of Equator
Technologies,  Inc., a multimedia processor company.  From October 1997 to 1998,
Mr. Bell was Vice President, Engineering and Chief Operations Officer at Equator
Technologies,  Inc. From November 1995 to 1997, he was Vice President,  Advanced
Architecture  and Consumer  Products  Divisions  and General  Manager,  Consumer
Products  Division  of  LSI  Logic.  Mr.  Bell  received  a B.S.  in  Electrical
Engineering and a M.S. in Computer Science from the University of Utah.

     Conrad J.  Dell'Oca has served as Chairman of the Board of the Company from
February 1997 until March of 2001. He also served as Chief Executive Officer and
President  from  February  1992 to  January  1999.  From May  1981 to 1991,  Mr.
Dell'Oca was Vice President,  Research and Development of LSI Logic Corporation,
a semiconductor  manufacturer.  Mr. Dell'Oca  received a B.A.Sc.  and M.A.Sc. in
Engineering Physics and a Ph.D. in Electrical Engineering from the University of
British Columbia.

     Tom  Recine  joined  Ingenuus's  Board in  November  2001.  He is  actively
involved in management,  financing,  and strategic planning at Arbor Vita. Prior
to his  involvement  with Arbor Vita, Mr. Recine was Vice President of Marketing
at  Linear  Technology  Corporation  from 1991 to 1997.  From 1982 to 1991,  Mr.
Recine  co-founded  Flagship  Software and Marcon Sales, Inc. From 1970 to 1982,
Mr. Recine was in marketing management at National Semiconductor,  including the
Director  of Sales  Operations.  He worked  at  Motorola  Semiconductor  between
1962-1970.  Mr.  Recine is also a member of the Board of Directors of Arbor Vita
Company.  Mr.  Recine  holds a B.S. in Physics  from the  University  of Windsor
(Ontario, Canada) and an M.B.A. from Northeastern University.

     Al Wilson has served as  director of the  Company  since  March  2000.  Mr.
Wilson is Chairman of the Board and Chief Executive Officer of Rutilus Software,
Inc. since August 1998. From September 1995 to August 1998, Mr. Wilson served as
Chief Operating Officer of Mylex Corporation, a data storage systems and service
company.  Mr. Wilson also served as Vice President and General  Manager of Array
Technology, a division of EMC Corporation, from May 1993 to September 1995.

     Officers  serve  at the  discretion  of the  Board  of  Directors  and  are
appointed annually.  There are no family relationships  between our directors or
officers.

ITEM 2. PROPERTIES

     We occupied  approximately 29,000 square feet of office space in Sunnyvale,
California  until the end of November 2001, when the lease expired.  In December
2001,  the  Company   relocated  its  corporate   headquarters  from  Sunnyvale,
California to Livermore, California, pursuant to a new lease that expires


                                        9
<PAGE>

in November  2011.  The new facility  has  approximately  19,300  square feet of
office space. We also lease sales offices in Idaho, Minnesota, and Tokyo, Japan.
We believe that our facilities are adequate for our current needs.

ITEM 3. LEGAL PROCEEDINGS

Class Action Lawsuits

     The company was the defendant in a class action  lawsuit,  Howard Jonas, et
al. v. Aspec Technology, Inc. (Ingenuus Corporation), filed in July 1998. During
fiscal  2001,  the Company  received an order of final  judgment  approving  the
settlement and dismissing the case with prejudice as to all defendants. Pursuant
to the terms of the settlement agreement and the court's order, Aspec (now known
as  Ingenuus  Corporation)  paid $1.4  million  into the  settlement  fund,  and
thereafter,  issued 1.75 million shares of common stock to the plaintiff  class.
The settlement  cost,  including the stock  element,  using a price of $0.50 per
share, the fair market value of the Company's common stock at November 30, 2000,
had been accrued as of November 30, 2000.

Derivative Lawsuit

     Certain  of the  Company's  current  and  former  officers,  directors  and
shareholder entities were also named as defendants in a derivative lawsuit filed
in November 1998. A Memoradum of  Understanding,  with the objective of settling
the  derivative  litigation,  was executed by the  defendants in fiscal 2001. In
February 2001, at a hearing before the court, the parties advised the court that
they had reached  agreement  on a  Stipulation  of  Settlement.  The  settlement
agreement,  which  would fully and  finally  settle and  resolve the  derivative
litigation,  including  a  dismissal  of the  action  with  prejudice  as to all
defendants. The agreement requires the Company to pay the derivative plaintiffs'
attorneys' fees in the amount of $395,000,  which was accrued as of November 30,
2000,  as well as to make  certain  changes  to the  Company's  audit  committee
charter.  In March 2001, the court entered an Order approving the Stipulation of
Settlement and dismissing the matter with prejudice as to all defendants.

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 pled her arbitration claim
with the AAA on or about  March 2,  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. An arbitrator was appointed,  and
the arbitration  was scheduled for September 8, 2000. The  arbitration  date was
suspended by the AAA, and 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.

NASDAQ Inquiry

     In July 2001,  the Company  failed to maintain  NASDAQ's  minimum bid price
closing  requirement  of $1.00 and that such  failure had  continued  beyond the
ninety-day  probationary  period  allowed  under the  Rules.  Consequently,  the
Company's stock was delisted from NASDAQ on July 26, 2001.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.


                                       10
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS

Market for Common Stock

     Our Common  Stock has been  quoted on the NASDAQ  National  Market from the
date of our initial  public  offering in April 1998 until July 26, 2001. On July
26,  2001,  our Common Stock was delisted  from the NASDAQ  National  Market and
began trading on the Over the Counter Bulletin Board (the "OTC Bulletin Board").
Prior to April  1998,  there was no public  market  for the  Common  Stock.  The
following table sets forth, for the fiscal quarters indicated,  the high and low
sale prices per share for the Common  Stock as  reported on the NASDAQ  National
Market  and  the  OTC  Bulletin  Board.   The  OTC  Bulletin  Board  prices  are
over-the-counter  market quotations,  which reflect inter-dealer prices, without
retail  mark-up,  mark-down,  or commission  and may not  necessarily  represent
actual  transactions.  Our Common  Stock is  currently  quoted  under the symbol
"INGE.OB"

                                                             Fiscal Year Ended
                                                             November 30, 2001
                                                          ----------------------
                                                             High          Low
                                                          ----------   ---------
Fourth quarter (from September 1, 2001 to
 November 30, 2001) .....................................  $  0.11      $  0.07
Third quarter (from June 1, 2001 to August 31, 2001).....     0.30         0.07
Second quarter (from March 1, 2001 to
 May 31, 2001) ..........................................     0.48         0.25
First quarter (from December 1, 2000 to
 February 28, 2001) .....................................     0.69         0.19

                                                             Fiscal Year Ended
                                                             November 30, 2000
                                                          ----------------------
                                                             High          Low
                                                          ----------   ---------
Fourth quarter (from September 1, 2000 to
 November 30, 2000) .....................................  $  1.88      $  0.50
Third quarter (from June 1, 2000 to August 31, 2000).....     2.44         1.19
Second quarter (from March 1, 2000 to
 May 31, 2000) ..........................................     8.56         1.13
First quarter (from December 1, 1999 to
 February 28, 2000) .....................................     5.44         2.31

     On January 31, 2002, the Company's Common Stock closed at $0.11.

Holders of Record

     As of January 31, 2002, there were  approximately  1,463 beneficial holders
of our Common Stock.

Dividends

     We have never  declared  or paid cash  dividends.  We  currently  intend to
retain any earnings for use in our  business  and do not  anticipate  paying any
cash dividends on our capital stock in the foreseeable future.


                                       11
<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                         Fiscal Year Ended November 30,
                                                    -------------------------------------------------------------------------
                                                        2001           2000            1999            1998           1997
                                                    ------------   ------------   -------------   -------------   -----------
                                                                      (in thousands, except per share data)
<S>                                                 <C>            <C>            <C>             <C>             <C>
CONSOLIDATED STATEMENT OF
 INCOME DATA:
Revenues: .......................................
   Product ......................................    $     460      $   1,127       $     --        $     --       $    --
   Service ......................................        1,266          1,803             170             --            --
                                                     ---------      ---------       ---------       ---------      --------
      Total revenues ............................        1,726          2,930             170             --            --
                                                     ---------      ---------       ---------       ---------      --------
Cost of revenues: ...............................
   Product ......................................          888            854             --              --            --
   Service ......................................        1,589          2,201              94             --            --
                                                     ---------      ---------       ---------       ---------      --------
      Total cost of revenues ....................        2,477          3,055              94             --            --
                                                     ---------      ---------       ---------       ---------      --------
Gross profit (loss) .............................         (751)          (125)             76             --            --
                                                     ---------      ---------       ---------       ---------      --------
Operating expenses: .............................
   Research and development .....................        2,475          2,645             --              --            --
   Sales and marketing ..........................        5,058          2,793             --              --            --
   General and administrative ...................        4,225          7,170           5,490           4,206         2,363
   Legal settlement .............................          --           2,670             --              --            --
   Write-off of purchased technology ............          --             925             630                           --
   Write-off of net assets of Chip & Chip                1,401            --              --              --            --
   Amortization of goodwill and other
    intangible assets ...........................        3,334          3,707              64             --            --
   Impairment of intangible assets ..............          --             571             --              --            --
                                                     ---------      ---------       ---------       ---------      --------
      Total operating expenses ..................       16,493         20,481           6,184           4,206         2,363
                                                     ---------      ---------       ---------       ---------      --------
(Loss) from operations ..........................      (17,244)       (20,606)         (6,108)         (4,206)       (2,363)
Equity( losses) from joint venture ..............          --             (67)           (574)            --            --
Gain on sale of investment ......................        6,163            --              --              --            --
Impairment of investment in Slim
 Technology .....................................          --          (1,688)            --              --            --
Interest and other, net .........................          591            659           1,610           1,614           173
                                                     ---------      ---------       ---------       ---------      --------
(Loss) from continuing operations ...............      (10,490)       (21,702)         (5,072)         (2,592)       (2,190)
Income (loss) from discontinued
 operations (net of income taxes) ...............         (524)        (3,903)        (21,226)         (3,942)        3,149
Gain(loss) on disposal of discontinued
 operations .....................................         (705)         4,434             --              --            --
                                                     ---------      ---------       ---------       ---------      --------
Income (loss) before income taxes ...............      (11,719)       (21,171)        (26,298)         (6,534)          959
Income tax provision ............................            3            --              --              --            --
                                                     ---------      ---------       ---------       ---------      --------
Net income(loss) ................................      (11,722)       (21,171)        (26,298)         (6,534)          959
Accretion of redeemable preferred stock .........          --             --              --            4,328           823
                                                     ---------      ---------       ---------       ---------      --------
Income (loss) attributable to common
 stockholders ...................................    $ (11,722)     $ (21,171)      $ (26,298)      $ (10,862)     $    136
                                                     =========      =========       =========       =========      ========
Diluted earnings (loss) per share ...............    $   (0.31)     $   (0.58)      $   (0.91)      $   (0.43)     $   0.01
                                                     =========      =========       =========       =========      ========
Diluted average shares outstanding ..............       37,215         36,292          28,831          25,258        22,585
                                                     =========      =========       =========       =========      ========
</TABLE>


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                      Fiscal Year Ended November 30,
                                                    -------------------------------------------------------------------
                                                       2001          2000          1999          1998          1997
                                                    ----------   -----------   -----------   -----------   ------------
                                                                              (In thousands)
<S>                                                 <C>          <C>           <C>           <C>           <C>
CONSOLIDATED BALANCE SHEET
 DATA:
Working capital .................................    $ 3,171      $ 13,173      $ 19,646      $ 43,068      $   3,077
Total assets ....................................     17,648        38,454        45,759        70,463         14,905
Long term obligations ...........................        --            219           324         1,052            --
Redeemable Preferred Stock ......................        --            --            --            --          14,168
Redeemable Common Stock .........................        --            --            --            --           7,116
Total stockholders' equity (deficiency) .........     13,858        29,986        35,941        58,775        (13,859)
</TABLE>

------------
(1) See Note 16 of Notes to Consolidated Financial Statements for an explanation
of the determination of shares used in computing earnings per share.

ITEM 7. 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."

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  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,  hardware and services related to Novo, and
maintenance services related to Novo and Inbox. The EDA segment was discontinued
as of August 31, 2001.


                                       13
<PAGE>

Results of Operations

     The following table sets forth for the periods indicated selected statement
of operations data in thousands of dollars and as a percentage of revenue:

                              INGENUUS CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                  Fiscal Year Ended November, 30,
                                                                  -------------------------------
                                                                       2001             2000
                                                                     Ingenuus         Ingenuus
                                                                  --------------   --------------
<S>                                                               <C>              <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Revenues:
   Product ....................................................     $      460       $    1,127
   Service ....................................................          1,266            1,803
                                                                    ----------       ----------
      Total revenues ..........................................          1,726            2,930
                                                                    ----------       ----------
Cost of revenues:
   Product ....................................................            888              854
   Service ....................................................          1,589            2,201
                                                                    ----------       ----------
      Total cost of revenues ..................................          2,477            3,055
                                                                    ----------       ----------
Gross profit(loss) ............................................           (751)            (125)
Operating expenses:
 Research and development .....................................          2,475            2,645
 Sales and marketing. .........................................          5,058            2,793
 General and administrative ...................................          4,225            7,170
 Legal settlement .............................................            --             2,670
 Write-off of purchased technology ............................            --               925
 Write-off of net assets of Chip & Chip .......................          1,401              --
 Amortization of goodwill and other intangible assets .........          3,334            3,707
 Impairment of intangible assets ..............................            --               571
                                                                    ----------       ----------
      Total operating expenses ................................         16,493           20,481
                                                                    ----------       ----------
(Loss) from operations: .......................................        (17,244)         (20,606)
Equity(losses) from joint venture .............................            --               (67)
Gain(loss) on sale of investment ..............................          6,163
Impairment of investment in Slim Technology ...................            --            (1,688)
Interest and other, net .......................................            591              659
                                                                    ----------       ----------
(Loss) from continuing operations .............................        (10,490)         (21,702)
Income(loss) from discontinued operations (net of income taxes
 of $0 and $0 in 2001 and 2000 respectively) ..................           (524)          (3,903)
Gain(loss) on disposal of discontinued operations .............           (705)           4,434
                                                                    ----------       ----------
Income(loss) before income taxes ..............................        (11,719)         (21,171)
Income tax provision ..........................................              3              --
                                                                    ----------       ----------
Net income(loss) ..............................................     $  (11,722)      $  (21,171)
                                                                    ==========       ==========
</TABLE>


                                       14
<PAGE>

                              INGENUUS CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS
                             (percentage of revenue)

<TABLE>
<CAPTION>
                                                                       Fiscal Year Ended
                                                                          November 30,
                                                                    ------------------------
                                                                       2001          2000
                                                                     Ingenuus      Ingenuus
                                                                    ----------   -----------
<S>                                                                 <C>          <C>
CONSOLIDATED STATEMENT OF INCOME DATA:
Revenues:
   Product ......................................................        27%          38%
   Service ......................................................        73           62
                                                                         --           ---
      Total revenues ............................................       100          100
                                                                        ---          ----
Cost of revenues:
   Product ......................................................        52           29
   Service ......................................................        92           75
                                                                        ---          ----
      Total cost of revenues ....................................       144          104
                                                                        ---          ----
Gross profit(loss) ..............................................       (44)          (4)
Operating expenses:
   Research and development .....................................       143           90
   Sales and marketing. .........................................       293           95
   General and administrative ...................................       245          245
   Legal settlement .............................................         0           91
   Write-off of purchased technology ............................         0           32
   Write-off of net assets of Chip & Chip .......................        81            0
   Amortization of goodwill and other intangible assets .........       193          127
   Impairment of intangible assets ..............................         0           19
                                                                        ---          ----
      Total operating expenses ..................................       955          699
                                                                        ---          ----
(Loss) from operations: .........................................      (999)        (703)
Equity (losses) from joint venture ..............................         0           (2)
Gain(loss) on sale of investment ................................       357            0
Impairment of investment in Slim Technology .....................         0          (58)
Interest and other, net .........................................        34           22
                                                                       ----         -----
(Loss) from continuing operations ...............................      (608)        (741)
Income(loss) from discontinued operations (net of income taxes
 of $0 and $0 in 2001 and 2000 respectively) ....................       (30)        (133)
Gain (loss) on disposal of discontinued operations ..............       (41)         151
                                                                       ----         -----
Income(loss) before income taxes ................................      (679)        (723)
Income tax provision ............................................        --           --
Net income(loss) ................................................      (679)%       (723)%
                                                                       =====        =====
</TABLE>


                                       15
<PAGE>

     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.
The EDA segment was discontinued as of August 31, 2001.

     Revenue for  Ingenuus  decreased by 41% to $1.7 million in fiscal 2001 from
$2.9 million in fiscal 2000.  Product  revenue  decreased to $460,000  from $1.1
million,  while service  revenue  decreased to $1.3 million from $1.8 million in
fiscal  2001  and  fiscal  2000,  respectively.   This  decrease  was  primarily
attributable to lower demand for our products.

     International  revenue  for the  Company  accounted  for 55% of  revenue in
fiscal 2001.

     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 $600,000 to $2.5 million in fiscal
2001 from $3.1  million in fiscal  2000.  The  decrease in cost of revenues  was
mainly due to  $750,000  decrease  in  salaries  expenses  due to  reduction  in
headcount.  This was partially  offset by an increase in consulting  expenses of
$72,000 in fiscal 2001.  Cost of revenue as a percentage of revenue was 144% and
104% in fiscal 2001 and fiscal 2000, respectively.  Cost of revenues for the EDA
segment was immaterial for fiscal 2001 and 2000. 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 $2.5 million in fiscal 2001 from
$2.6 million in fiscal 2000. The decrease in research and  development  expenses
in fiscal 2001  resulted  from the  decrease in salaries  expenses of  $279,000,
which was  partially  offset by an  increase  in  consulting  fees of  $103,000.
Research and development expenses as a percentage of revenue were 143% in fiscal
2001,  and 90% in fiscal 2000.  We expect  research and  development  expense to
decrease in absolute dollars in fiscal 2002.

     Research  and  development  expense for the EDA  business  was $650,000 for
Verilux in fiscal 2001  compared to $1.2 million  ($404,000  for Chip & Chip and
$831,000 for  Verilux) in fiscal 2000.  Since Chip & Chip was sold in June 2000,
the  decrease of $181,000 for Verilux was due  primarily to a 9-month  period of
operations in fiscal 2001 as the Company  discontinued the operations of Verilux
as of August 31, 2001.

     Sales and marketing.  Sales and marketing  expenses consist of salaries and
commissions   paid  to  internal   sales  and  marketing   personnel  and  sales
representatives,  advertising  costs and related operating  expenses.  Sales and
marketing  expenses for the Ingenuus  segment  increased by $2.3 million to $5.1
million in fiscal 2001 from $2.8 million in fiscal  2000.  The increase of sales
and marketing  expenses was mainly due to $1.0 million  increase in salaries and
benefits,  $715,000 in advertising related expenses,  $170,000 in recruiting and
$131,000 in travel.  Continued  expansion of sales and marketing efforts for our
business-to-business   collaborative   commerce  software   contributed  to  the
increase.  Sales and marketing  expenses as a percentage of revenue were 293% in
2001 and 95% in 2000.

     There were no sales and  marketing  expenses for the EDA business in fiscal
2001 and fiscal 2000. The 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 $3.0 million to $4.2 million in fiscal 2001
from $7.2  million in fiscal 2000.  The  decrease in general and  administrative
expenses  was mainly due to a $1.3  million  decrease  in  personnel  costs as a
result of reduction in workforce,  $486,000  decrease in  professional  services
related to legal and accounting  fees.  There was also a decrease of $324,000 of
G&A expenses  related to our office in Japan. A decrease of $148,000 in salaries
and travel  expenses was a result of the  elimination of the general manager and
other positions and $176,000  decrease in common expenses due to relocating to a
smaller facility. General and administrative expenses as a percentage of revenue
was 245% for both fiscal 2001 and 2000.


                                       16
<PAGE>

     Legal Settlement.  During fiscal 2000, the Company executed a Memorandum of
Understanding  for the settlement of the  class-action  lawsuit related to Aspec
Technology,  subject to Court approval.  The corresponding  cost of $2.7 million
had been accrued in the year. There was no legal settlement cost in fiscal 2001.

     Write-off  of  purchased  technology.  The  $925,000  charge in fiscal 2000
related to the acquisition of InBox.

     Write-off  of net assets of Chip & Chip.  The  write-off of $1.4 million of
net assets of Chip & Chip in fiscal 2001, included the write-off of $1.7 million
of Chip & Chip's notes  receivable that was offset by deferred gain of $300,000.
Write-off  of net assets of Chip & Chip as a  percentage  of revenue  was 81% in
fiscal 2001 and 0% in fiscal 2000.

     Amortization of goodwill and other intangible  assets.  The amortization of
goodwill and other  intangible  assets  decreased to $3.3 million in fiscal 2001
from $3.7 million in fiscal 2000.  The  decrease of $400,000  resulted  from the
reduction  of $379,000 of  amortization  expenses  due to the  write-off of core
technology  of  $443,000  and  acquired  workforce  in the amount of $128,000 in
fiscal  2000.  Amortization  of  goodwill  and  other  intangible  assets  as  a
percentage of revenue was 193% in fiscal 2001 and 127% in fiscal 2000.

     Impairment of intangible  assets. As a result of the  discontinuation  of a
certain  development  project,  the  Company  recorded an  impairment  charge of
$571,000 in fiscal 2000 related to the Novo technology.

     Gain on sale of  investments.  In  fiscal  2001 we sold  525,000  shares of
Virage  Logic,  Corp.  for a total  of $7.0  million,  at an  aggregate  cost of
$840,000,  resulting in a gain of $6.2 million. Gain on sale of investments as a
percentage of revenue was 357% in fiscal 2001 and 0% in fiscal 2000.

     Impairment  of investment in Slim  Technology.  In fiscal 2000,  management
assessed that there had been a permanent  decline in the value of the investment
in Slim Technology and an impairment charge of $1.7 million was recorded.

     Interest and other,  net. In fiscal 2001,  interest and dividend  income on
investment decreased by $420,000 due to decreased cash available for investment.
But the decrease was offset by $400,000 in interest on tax refunds received from
the IRS. The loss on disposal of fixed  assets  increased by $41,000 to $113,000
in fiscal  2001 from  $72,000  in fiscal  2000 due to the  disposal  of  certain
furniture  and  office  equipment  that  were not moved to our new  location  in
Livermore.  Interest and other, net as a percentage of revenue was 34% in fiscal
2001 and 22% in fiscal 2000.

     Foreign  Currency.  Balance sheet accounts of Novo's 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.  The provision for income taxes was $3,000,  $0
and $41,000 in fiscal 2001,  2000 and 1999,  respectively.  The $3,000 in fiscal
2001 was related to Ingenuus,  whereas, $0 and $41,000 in fiscal 2000 and fiscal
1999,  repectively,  are  reflected  as  part  of  the  loss  from  discontinued
operations as they relate to the discontinued businesses.  The Company has taken
a valuation allowance on the full amount of the net operating loss carryforwards
and its other net deferred tax assets since it is likely 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 $14.7 million, $13.3 million, and
$10.2 million in fiscal 2001,  2000,  and 1999,  respectively.  Net cash used in
fiscal  2001,  2000 and 1999 was due to the  significant  net  losses  incurred.
During fiscal 2001, we received $1.5 million income tax refund.

     Net cash provided by and (used for) investing activities were $6.3 million,
($9.8 million), and ($6.3 million) in fiscal 2001, 2000, and 1999, respectively.
During fiscal 2001, we received net proceeds of $7.0


                                       17
<PAGE>

million from the sale of 525,000 shares of Virage Logic,  Corp.  This was offset
by  $701,000  used  for  capital  expenditures  primarily  related  to  interior
improvements to our Livermore facility.  During fiscal 2000 and 1999,  investing
activities  included   acquisitions  and  purchases  of  software  licenses  and
equipment.  Net cash used in fiscal 2000 mainly  included  $7.6  million for the
acquisition  of  Inbox  and $2.8  million  used in  purchases  of  property  and
equipment. Net cash used in fiscal 1999 included $2.1 million in acquisitions of
Verilux,  Chip & Chip and Novo  Systems,  $2.3 million for the purchase of a 40%
interest in Slim  Technology  and $1.8 million used in purchases of property and
equipment.

     Net cash utilized by financing  activities was $154,000 and $2.2 million in
fiscal  2001 and fiscal  1999,  respectively.  Net cash  provided  by  financing
activities was $554,000 in fiscal 2000.

     In fiscal 2001, cash utilized by financing  activities  consisted primarily
of the purchase of Treasury  Stock.  In fiscal 1999,  cash utilized by financing
activities  consisted  primarily  of the  purchase  of  Treasury  Stock for $2.0
million,  loan to related  party for  $430,000  and was offset by proceeds  from
issuance of Common  Stock for  $144,000  and  collection  of  shareholder  notes
receivable of $28,000.  In fiscal 2000,  cash  provided by financing  activities
included proceeds from issuance of Common Stock for $681,000, collection of loan
to related party for $430,000 and  collection of stockholder  notes  receivables
for  $130,000  and was offset by  repayment  of debt  related to Chip & Chip for
$222,000 and repurchases of Common Stock for $465,000.

     The  write-off of $1.4 million of net assets of Chip & Chip in fiscal 2001,
included $ 1.7 million of notes  receivable  from Chip & Chip that was offset by
$300,000 deferred gain on the sale of Chip & Chip.

     Net  proceeds  from the sale of SIP  business  were $3.8  million  and $7.5
million  in  fiscal  2001 and 2000,  respectively.  The  entire  amount of $11.3
million has been received as of November 30, 2001.

     As of November 30, 2001, we had cash and  equivalents  of $5.5 million,  an
accumulated  deficit of $86.4 million and working  capital of $3.2  million.  We
anticipate  approximately  $200,000  of  capital  expenditures  over the next 12
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,

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

     We may  require  additional  funds in the  future  and there is a risk that
financing may not be on terms favorable to us, if available at all.

     Based on our current  revenue  projection and available cash as of November
30, 2001, we feel  Ingenuus will be able to fund its  operations in fiscal 2002.
If current revenue  projections  are not met,  Ingenuus plans to restructure the
Company  including,  but not limited to,  further  reduction  in  headcount  and
operating  expenses,  in  order  to  reduce  expenses  and be able  to fund  its
operations in fiscal 2002.


                                       18
<PAGE>

Other Factors Affecting Future Operating Results

Possible Challenges to Success

   We May Not Be Successful in Marketing the MCM Product

     We formally  introduced  in January  2001  Manufacturing  Change  ManagerTM
("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.

   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.

   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.


                                       19
<PAGE>

     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  when 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;

     *    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.

     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.


                                       20
<PAGE>

     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 have 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;

     *    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;

     *    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 the Common Stock.


                                       21
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                             Page
                                                                                            -----
<S>                                                                                         <C>
Report of Independent Accountants--Moss Adams ...........................................    23
Report of Independent Accountants--PricewaterhouseCoopers ...............................    24
Financial Statements:
Consolidated Balance Sheets as of November 30, 2001, and November 30, 2000 ..............    25
Consolidated Statements of Operations for fiscal years ended November 30, 2001,
 November 30, 2000 and November 30, 1999 ................................................    26
Consolidated Statements of Stockholders' Equity for fiscal years ended November 30, 2001,
 November 30, 2000 and November 30, 1999 ................................................    27
Consolidated Statements of Cash Flows for fiscal years ended November 30, 2001,
 November 30, 2000 and November 30, 1999 ................................................    28
Notes to Financial Statements ...........................................................    29
Financial Statement Schedules--Schedule II--Valuation and Qualifying Accounts
 and Reserves for fiscal years ended November 30, 2001, November 30, 2000 and
 November 30, 1999 ......................................................................    52
</TABLE>


                                       22
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Ingenuus Corporation

     We have audited the  accompanying  consolidated  balance  sheet of Ingenuus
Corporation  and   subsidiaries  as  of  November  30,  2001,  and  the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

     We conducted our audit in  accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the financial  position of Ingenuus  Corporation and
subsidiaries  as of November 30, 2001, and the results of its operations and its
cash  flows for the year then ended in  conformity  with  accounting  principles
generally accepted in the United States of America.

     The  accompanying  financial  statements  have been  prepared  assuming the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements, the Company has incurred significant recurring losses from
operations and has limited capital  resources that raise substantial doubt about
its  ability to  continue as a going  concern.  Management's  plans in regard to
these  matters are also  described in Note 2. The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.


MOSS ADAMS LLP

San Francisco, California
January 10, 2002


                                       23
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Ingenuus Corporation

In  our  opinion, the consolidated balance sheet as of November 30, 2000 and the
related  consolidated  statements  of operations, of stockholders' equity and of
cashflows  for  each  of  the  two  years  in the period ended November 30, 2000
present  fairly,  in  all  material respects, the financial position, results of
operations  and  cash  flows  of  Ingenuus  Corporation  and its subsidiaries at
November  30,  2000  and  for each of the two years in the period ended November
30,  2000,  in  conformity  with accounting principles generally accepted in the
United  States  of America. In addition, in our opinion, the financial statement
schedules  listed  in  the  accompanying  index  present fairly, in all material
respects,  the  information set forth therein, when read in conjunction with the
related  consolidated  financial  statements.  These  financial  statements  and
financial   statement   schedules   are  the  responsibility  of  the  Company's
management;  our  responsibility  is  to  express  an opinion on these financial
statements  based  on our audits. We conducted our audits of these statements in
accordance  with  auditing  standards generally accepted in the United States of
America  which  require  that we plan and perform the audit to obtain reasonable
assurance   about   whether  the  financial  statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the   amounts  and  disclosures  in  the  financial  statements,  assessing  the
accounting  principles  used  and  significant estimates made by management, and
evaluating  the  overall  financial  statement presentation. We believe that our
audits  provide  a  reasonable  basis  for  our opinion. We have not audited the
consolidated  financial  statements  of  Ingenuus  Corporation  for  any  period
subsequent to November 30, 2000.

The  accompanying  financial  statements have been prepared assuming the Company
will  continue  as  a  going  concern.  As  discussed in Note 2 to the financial
statements,  Ingenuus  Corporation has suffered recurring losses from operations
that  raise  substantial doubt about its ability to continue as a going concern.
Management's  plans in regard to these matters are also described in Note 2. The
financial  statements  do not include any adjustments that might result from the
outcome of this uncertainty.


PRICEWATERHOUSECOOPERS

San Jose, California
February 21, 2001


                                       24
<PAGE>

                              INGENUUS CORPORATION

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

<TABLE>
<CAPTION>
                                                                                    November 30,
                                                                             ---------------------------
                                                                                 2001           2000
                                                                             ------------   ------------
<S>                                                                          <C>            <C>
                                                    ASSETS
Current assets:
 Cash and cash equivalents .................................................  $   5,496      $   8,789
 Short-term investments ....................................................        --           5,972
 Accounts receivable, (net of allowances of $216 in 2001 and $536 in 2000) .        549            553
 Income taxes receivable ...................................................        609          2,089
 Notes Receivable ..........................................................        --           3,833
 Loan to related party .....................................................         62            --
 Prepaid expenses and other current assets .................................        245            186
                                                                              ---------      ---------
   Total current assets ....................................................      6,961         21,422
 Property and equipment, net ...............................................        858            808
 Goodwill and other intangible assets ......................................      9,590         14,542
 Restricted cash ...........................................................        125            106
 Net assets of Chip & Chip .................................................        --           1,401
 Investments and other assets ..............................................        114            175
                                                                              ---------      ---------
   Total assets ............................................................  $  17,648      $  38,454
                                                                              =========      =========
                                 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable ..........................................................  $     865      $   1,682
 Accrued liabilities .......................................................      2,386          6,040
 Deferred revenue ..........................................................        539            527
                                                                              ---------      ---------
   Total current liabilities ...............................................      3,790          8,249
Other liabilities, long term ...............................................        --             219
                                                                              ---------      ---------
   Total liabilities .......................................................      3,790          8,468
                                                                              ---------      ---------
Commitments and contingencies (Notes 11 and 17)
Stockholders' equity:
 Common stock, $.001 par value; 75,000 shares authorized; shares
   outstanding: 2001--38,657; 2000--36,806 .................................    103,472        102,577
 Treasury stock; 2001--3,189 shares; 2000--2,707 shares ....................     (3,254)        (3,085)
 Notes receivable ..........................................................        --             --
 Accumulated other comprehensive income ....................................        --           5,132
 Accumulated deficit .......................................................    (86,360)       (74,638)
                                                                              ---------      ---------
   Total stockholders' equity ..............................................     13,858         29,986
                                                                              ---------      ---------
   Total liabilities and stockholders' equity ..............................  $  17,648      $  38,454
                                                                              =========      =========
</TABLE>

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


                                       25
<PAGE>

                              INGENUUS CORPORATION

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

<TABLE>
<CAPTION>
                                                                                 Year ended November 30,
                                                                     ------------------------------------------------
                                                                          2001             2000             1999
                                                                     --------------   --------------   --------------
<S>                                                                  <C>              <C>              <C>
Revenue ..........................................................     $    1,726       $    2,930       $      170
Cost of revenue ..................................................          2,477            3,055               94
                                                                       ----------       ----------       ----------
Gross profit (loss) ..............................................           (751)            (125)              76
Operating expenses:
 Research and development ........................................          2,475            2,645              --
 Sales and marketing .............................................          5,058            2,793              --
 General and administrative ......................................          4,225            7,170            5,490
 Legal settlement ................................................            --             2,670              --
 Write-off of purchased technology ...............................            --               925              630
 Write-off of net assets of Chip & Chip ..........................          1,401              --               --
 Amortization of goodwill and other intangible assets ............          3,334            3,707               64
 Impairment of intangible assets .................................            --               571              --
                                                                       ----------       ----------       ----------
   Total operating expenses ......................................         16,493           20,481            6,184
                                                                       ----------       ----------       ----------
(Loss) from operations ...........................................        (17,244)         (20,606)          (6,108)
Equity (losses) from joint venture ...............................                             (67)            (574)
Gain (loss) on sale of investment ................................          6,163              --               --
Impairment of investment in Slim Technology ......................            --            (1,688)             --
Interest and other, net ..........................................            591              659            1,610
                                                                       ----------       ----------       ----------
(Loss) from continuing operations ................................        (10,490)         (21,702)          (5,072)
(Loss) from discontinued operations, (net of income taxes of
 $0, $0, and $41 in 2001, 2000 and 1999 respectively) ............           (524)          (3,903)         (21,226)
Gain (loss) on disposal of discontinued operations ...............           (705)           4,434              --
                                                                       ----------       ----------       ----------
Income (loss) before income taxes ................................        (11,719)         (21,171)         (26,298)
Income tax provision .............................................              3              --               --
                                                                       ----------       ----------       ----------
Net income (loss) ................................................        (11,722)         (21,171)         (26,298)
                                                                       ----------       ----------       ----------
Net (loss) attributable to common stockholders ...................     $  (11,722)      $  (21,171)      $  (26,298)
                                                                       ==========       ==========       ==========
EARNINGS (LOSS) PER SHARE--BASIC AND
 DILUTED
Continuing operations ............................................     $    (0.28)      $    (0.60)      $    (0.17)
Discontinued operations ..........................................        (  0.01)         (  0.10)         (  0.74)
Gain (loss) on disposal of discontinued operations ...............        (  0.02)            0.12              --
Net (loss) per share attributable to common stockholders .........        (  0.31)         (  0.58)         (  0.91)
Shares used in basic and diluted per share calculation ...........         37,215           36,292           28,831
</TABLE>

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


                                       26
<PAGE>

                              INGENUUS CORPORATION

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (in thousands)

<TABLE>
<CAPTION>
                                                        Common Stock          Treasury Stock
                                                    -------------------- -------------------------     Notes
                                                     Shares     Amount      Shares       Amount     Receivable
                                                    -------- ----------- ----------- ------------- ------------
<S>                                                 <C>      <C>         <C>         <C>           <C>
Balances, November 30, 1998 .......................  28,399   $  86,198        --            --      $  (184)

Purchase of Verilux ...............................   2,127       1,893        --            --           --
Purchase of Chip & Chip ...........................   2,000       1,780        --            --           --
Purchase of Novo Systems ..........................   1,600       1,536        --            --           --
Issuance of common stock under stock
 purchase plans, net of repurchases ...............     174         144        --            --           --
Collection of stockholders' notes receivable ......     --          --         --            --           28
Amortization of deferred stock compensation .......     --          --         --            --           --
Purchase of treasury stock ........................     --          --      (2,135)       (1,987)         --
Net loss ..........................................     --          --         --            --           --
                                                     ------   ---------     ------        ------     -------
Balances, November 30, 1999 .......................  34,300      91,551     (2,135)       (1,987)       (156)

Purchase of InBox Software ........................   1,206       8,425        --            --           --
Issuance of common stock under stock option
 and stock purchase plans, net of repurchases         1,300         681        --            --           --
Stock option vesting acceleration in connection
 with disposal of businesses and severance
 agreements .......................................     --        1,847        --            --           --
Compensation charge in relation to stock
 options and warrants issued during the year ......     --           73        --            --           --
Collection of stockholders' notes receivable ......     --          --         --            --          130
Write off of notes receivable .....................     --          --         --            --           26
Purchase of treasury stock ........................     --          --         (72)         (465)         --
Stock received in connection with sale of
 Chip & Chip ......................................     --          --        (500)         (633)         --
Net loss ..........................................     --          --         --            --           --
Unrealized gain on available-for-sale
 marketable securities ............................     --          --         --            --           --
                                                     ------   ---------     ------        ------     -------
Balances, November 30, 2000 .......................  36,806     102,577     (2,707)       (3,085)         --

Issuance of common stock under stock option
 and stock purchase plans, net of repurchases           101          15        --            --           --
Issuance of common stock under class action
 lawsuit settlement ...............................   1,750         875        --            --           --
Compensation charge in relation to stock
 options and warrants issued during the year ......     --            5        --            --           --
Purchase of treasury stock ........................     --          --        (482)         (169)         --
Realized gain on sale of all available-for-sale
 marketable securities ............................     --          --         --            --           --
Net Loss ..........................................     --          --         --            --           --
                                                     ------   ---------     ------        ------     -------
Balances, November 30, 2001 .......................  38,657   $ 103,472     (3,189)    $  (3,254)         --
                                                     ======   =========     ======     =========     =======

<CAPTION>
                                                                     Accumulated                      Total
                                                       Deferred         Other                     Shareholders'
                                                         Stock      Comprehensive   Accumulated   (Deficiency)   Comprehensive
                                                     Compensation       Income        Deficit        Equity      Income (Loss)
                                                    -------------- --------------- ------------- -------------- --------------
<S>                                                 <C>            <C>             <C>           <C>            <C>
Balances, November 30, 1998 .......................     $  (70)            --       $  (27,169)    $  58,775      $   (6,534)
                                                                                                                  ==========
Purchase of Verilux ...............................         --             --              --          1,893             --
Purchase of Chip & Chip ...........................         --             --              --          1,780             --
Purchase of Novo Systems ..........................         --             --              --          1,536             --
Issuance of common stock under stock
 purchase plans, net of repurchases ...............         --             --              --            144             --
Collection of stockholders' notes receivable ......         --             --              --             28             --
Amortization of deferred stock compensation .......         70             --              --             70             --
Purchase of treasury stock ........................         --             --              --         (1,987)            --
Net loss ..........................................         --             --          (26,298)      (26,298)        (26,298)
                                                        ------             ---      ----------     ---------      ----------
Balances, November 30, 1999 .......................         --             --          (53,467)       35,941         (26,298)
                                                                                                                  ==========
Purchase of InBox Software ........................         --             --              --          8,425             --
Issuance of common stock under stock option
 and stock purchase plans, net of repurchases               --             --              --            681             --
Stock option vesting acceleration in connection
 with disposal of businesses and severance
 agreements .......................................         --             --              --          1,847             --
Compensation charge in relation to stock
 options and warrants issued during the year ......         --             --              --             73             --
Collection of stockholders' notes receivable ......         --             --              --            130             --
Write off of notes receivable .....................         --             --              --             26             --
Purchase of treasury stock ........................         --             --              --           (465)            --
Stock received in connection with sale of
 Chip & Chip ......................................         --             --              --           (633)            --
Net loss ..........................................         --             --          (21,171)      (21,171)        (21,171)
Unrealized gain on available-for-sale
 marketable securities ............................         --           5,132             --          5,132           5,132
                                                        ------           -----      ----------     ---------      ----------
Balances, November 30, 2000 .......................         --           5,132         (74,638)       29,986         (16,039)
                                                                                                                  ==========
Issuance of common stock under stock option
 and stock purchase plans, net of repurchases               --             --              --             15             --
Issuance of common stock under class action
 lawsuit settlement ...............................         --             --              --            875             --
Compensation charge in relation to stock
 options and warrants issued during the year ......         --             --              --              5             --
Purchase of treasury stock ........................         --             --              --           (169)            --
Realized gain on sale of all available-for-sale
 marketable securities ............................         --          (5,132)            --         (5,132)         (5,132)
Net Loss ..........................................         --             --          (11,722)      (11,722)        (11,722)
                                                        ------          ------      ----------     ---------      ----------
Balances, November 30, 2001 .......................         --             --       $  (86,360)    $  13,858      $  (16,854)
                                                        ======          ======      ==========     =========      ==========
</TABLE>

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


                                       27
<PAGE>

                              INGENUUS CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                            Year ended
                                                                                           November 30,
                                                                                           -------------
                                                                                                2001
                                                                                           -------------
<S>                                                                                        <C>
Cash flows from operating activities:
Net loss .................................................................................   $ (11,722)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
 Gain (loss) on disposal of discontinued operations ......................................         705
 Realized gain on sale of Virage Logic shares ............................................      (6,163)
 Write-down of software ..................................................................         --
 Write-off of purchased technology .......................................................         --
 Write-off of fixed assets ...............................................................          47
 Depreciation and amortization ...........................................................       4,694
 Impairment of goodwill and other intangible assets ......................................         --
 Provision for doubtful accounts .........................................................        (320)
 Equity loss from joint venture ..........................................................         --
 Impairment of investment in Slim Technology .............................................         --
 Gain (Loss) on disposal of fixed assets .................................................         120
 Write-off of notes receivable ...........................................................         --
 Stock compensation expense ..............................................................           5
 Accelerated vesting of stock options in relation to severance agreement .................         --
 Changes in assets and liabilities, net of assets and liabilities acquired/disposed of:
  Accounts receivable ....................................................................         324
  Income tax receivable ..................................................................       1,480
  Loan to related party ..................................................................         (62)
  Prepaid expenses and other current assets ..............................................         (59)
  Deferred income taxes ..................................................................         --
  Inventory ..............................................................................         --
  Other assets ...........................................................................          61
  Restricted cash ........................................................................         (19)
  Accounts payable .......................................................................        (815)
  Accrued liabilities ....................................................................      (2,966)
  Net income tax asset/liability .........................................................         --
  Other long term liabilities ............................................................         --
  Deferred revenue .......................................................................          12
                                                                                             ---------
   Net cash used for operating activities ................................................     (14,678)
Cash flows from investing activities:
 Acquisition of Verilux, net of cash acquired ............................................         --
 Acquisition of Novo, net of cash acquired ...............................................         --
 Acquisition of Chip & Chip, net of cash acquired ........................................         --
 Acquisition of InBox, net of cash acquired ..............................................         --
 Investment in Slim Technology ...........................................................         --
 Overdraft disposed of, net of cash acquired--Chip & Chip ................................         --
 Purchases of property and equipment .....................................................        (701)
 Sale of property and equipment ..........................................................           3
 Net Proceeds from Sales of available-for-sale securities ................................       7,003
 Purchase of non-marketable equity securities ............................................         --
                                                                                             ---------
   Net cash provided by (used for) investing activities ..................................       6,305
                                                                                             ---------
Cash flows from financing activities:
 Proceeds from issuance of common stock, net .............................................          15
 Redemption of redeemable preferred stock ................................................         --
 Repayment of borrowings .................................................................         --
 Purchase of treasury stock ..............................................................        (169)
 Loan to related party ...................................................................         --
 Collection of stockholder notes receivable ..............................................         --
                                                                                             ---------
   Net cash provided by (used for) financing activities ..................................        (154)
                                                                                             ---------
Write-off of net assets of Chip & Chip ...................................................       1,401
Net proceeds from the sale of discontinued operations ....................................       3,833
Effective exchange rate changes on cash and cash equivalents .............................         --
Net (decrease) increase in cash and equivalents ..........................................      (3,293)
Cash and equivalents, beginning of period ................................................       8,789
                                                                                             ---------
Cash and cash equivalents, end of period .................................................   $   5,496
                                                                                             =========
Supplemental disclosure of cash flow information:
 Cash paid for income taxes ..............................................................   $     --
                                                                                             =========
Supplemental disclosure of non-cash investing & financing activities:
 Divestiture of Chip & Chip--stock received ..............................................   $     --
                                                                                             ---------
Stock and options issued in connection with acquisitions:
 --InBox .................................................................................   $     --
                                                                                             =========
 --Chip & Chip ...........................................................................   $     --
                                                                                             =========
 --Verilux ...............................................................................   $     --
                                                                                             =========
 --Novo ..................................................................................   $     --
                                                                                             =========

<CAPTION>
                                                                                              Year ended November 30,
                                                                                           -----------------------------
                                                                                                 2000           1999
                                                                                           --------------- -------------
<S>                                                                                        <C>             <C>
Cash flows from operating activities:
Net loss .................................................................................    $(21,171)      $ (26,298)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
 Gain (loss) on disposal of discontinued operations ......................................      (4,434)            --
 Realized gain on sale of Virage Logic shares ............................................         --              --
 Write-down of software ..................................................................         --            1,799
 Write-off of purchased technology .......................................................         925           3,097
 Write-off of fixed assets ...............................................................         --              --
 Depreciation and amortization ...........................................................       7,283           7,119
 Impairment of goodwill and other intangible assets ......................................         571             --
 Provision for doubtful accounts .........................................................        (130)            817
 Equity loss from joint venture ..........................................................          67             574
 Impairment of investment in Slim Technology .............................................       1,688             --
 Gain (Loss) on disposal of fixed assets .................................................         (86)            --
 Write-off of notes receivable ...........................................................          26             --
 Stock compensation expense ..............................................................         --               70
 Accelerated vesting of stock options in relation to severance agreement .................         352             --
 Changes in assets and liabilities, net of assets and liabilities acquired/disposed of:
  Accounts receivable ....................................................................       1,303           5,051
  Income tax receivable ..................................................................         --              --
  Loan to related party ..................................................................         --              --
  Prepaid expenses and other current assets ..............................................         246             381
  Deferred income taxes ..................................................................         --            2,100
  Inventory ..............................................................................         --               82
  Other assets ...........................................................................         146             115
  Restricted cash ........................................................................        (106)            --
  Accounts payable .......................................................................      (1,302)         (1,379)
  Accrued liabilities ....................................................................       1,999            (767)
  Net income tax asset/liability .........................................................          11          (1,421)
  Other long term liabilities ............................................................        (350)           (728)
  Deferred revenue .......................................................................        (334)           (768)
                                                                                              --------       ---------
   Net cash used for operating activities ................................................     (13,296)        (10,156)
Cash flows from investing activities:
 Acquisition of Verilux, net of cash acquired ............................................         --             (830)
 Acquisition of Novo, net of cash acquired ...............................................         --             (487)
 Acquisition of Chip & Chip, net of cash acquired ........................................         --             (796)
 Acquisition of InBox, net of cash acquired ..............................................      (7,640)            --
 Investment in Slim Technology ...........................................................         --           (2,329)
 Overdraft disposed of, net of cash acquired--Chip & Chip ................................         266             --
 Purchases of property and equipment .....................................................      (2,768)         (1,846)
 Sale of property and equipment ..........................................................         296             --
 Net Proceeds from Sales of available-for-sale securities ................................         --              --
 Purchase of non marketable equity securities ............................................         --              --
                                                                                              --------       ---------
   Net cash provided by (used for) investing activities ..................................      (9,846)         (6,288)
                                                                                              --------       ---------
Cash flows from financing activities:
 Proceeds from issuance of common stock, net .............................................         681             144
 Redemption of redeemable preferred stock ................................................         --              --
 Repayment of borrowings .................................................................        (222)            --
 Purchase of treasury stock ..............................................................        (465)         (1,987)
 Loan to related party ...................................................................         430            (430)
 Collection of stockholder notes receivable ..............................................         130              28
                                                                                              --------       ---------
   Net cash provided by (used for) financing activities ..................................         554          (2,245)
                                                                                              --------       ---------
Write-off of net assets of Chip & Chip ...................................................         --              --
Net proceeds from the sale of discontinued operations ....................................       7,500             --
Effective exchange rate changes on cash and cash equivalents .............................          (7)             93
Net (decrease) increase in cash and equivalents ..........................................     (15,095)        (18,596)
Cash and equivalents, beginning of period ................................................      23,884          42,480
                                                                                              ----------     ---------
Cash and cash equivalents, end of period .................................................    $  8,789       $  23,884
                                                                                              ==========     =========
Supplemental disclosure of cash flow information:
 Cash paid for income taxes ..............................................................    $    --        $      31
                                                                                              ==========     =========
Supplemental disclosure of non-cash investing & financing activities:
 Divestiture of Chip & Chip--stock received ..............................................    $    633       $     --
                                                                                              ----------     ---------
Stock and options issued in connection with acquisitions:
 --InBox .................................................................................    $  8,425       $     --
                                                                                              ==========     =========
 --Chip & Chip ...........................................................................    $    --        $   1,780
                                                                                              ==========     =========
 --Verilux ...............................................................................    $    --        $   1,893
                                                                                              ==========     =========
 --Novo ..................................................................................    $    --        $   1,536
                                                                                              ==========     =========
</TABLE>

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


                                       28
<PAGE>

                              INGENUUS CORPORATION

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. FORMATION AND BUSINESS

     Ingenuus  Corporation  ("the  Company"),   a  Delaware   corporation,   was
incorporated   in  1991  as  Aspec   Technology,   Inc.  and  its  business  was
Semiconductor  Intellectual  Property  ("SIP").  In September  1999, the Company
purchased Verilux Design  Technology,  Inc. and Chip and Chip, Inc, two start up
companies  developing   Electronic  Design  Automation  ("EDA")  tools  for  the
semiconductor industry. In October 1999, the Company also purchased Novo Systems
Corporation,  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  Corporation,  a company providing  business to
business collaborative  commerce software solutions for manufacturers.  In April
2000,  the  Company  changed its name to  Ingenuus  Corporation,  trading on the
NASDAQ under the new symbol  "INGE".  During the fourth  quarter of fiscal 1999,
the Company  decided to discontinue  its  semiconductor  intellectual  property,
library development and design tools and service business ("SIP Business").

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.

     SIP  revenues  were $2.0  million and $7.3 million in the fiscal year ended
2000 and 1999, respectively.

     At November  30, 2001,  the $11.3  million for the sale of the SIP business
had been fully received.

     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  $270,000 and $537,000 for the twelve
months ended November 30, 2001 and November 30, 2000, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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
$86.4 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


                                       29
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

the Company will achieve profitability, or that it will be successful in raising
additional  funding  if  profitability  is  not  achieved.  If  current  revenue
projections are not met,  Ingenuus plans to restructure  the Company  including,
but not limited to, further  reduction in headcount and operating  expenses,  in
order to reduce  expenses and 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 this uncertainty.

     Certain  reclassifications  have been made to 2000  amounts to conform with
the 2001 presentation. These reclassifications had no effect on net loss.

Principles of consolidation

     These  consolidated  financial  statements include the accounts of Ingenuus
Corporation  and its wholly owned  subsidiaries.  All  significant  intercompany
balances and transactions have been eliminated.

Use of estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

     The  Company  considers  all highly  liquid  investments  with  original or
remaining  maturities at the date of purchase of three months or less to be cash
equivalents. The majority of the Company's cash and cash equivalents are held in
money market funds.

Fair value of financial instruments

     Statement of Financial Accounting Standards, No. 107 "Disclosure about Fair
Value  of  Financial  Instruments",  requires  certain  disclosure  to  be  made
regarding  the fair  value of  financial  instruments.  Carrying  amounts of the
Company's financial  instruments  including cash and cash equivalents,  accounts
receivable,  accounts payable, and other long term liabilities  approximate fair
value due to their short maturities.

Short-term investments

     Short  term   investments   in  equity   securities   are   classified   as
available-for-sale  and are carried at fair value,  with the unrealized gains or
losses reported in accumulated other  comprehensive  income (loss) in accordance
with the provisions of SFAS 115 "Accounting for Certain  Investments in Debt and
Equity Securities".

Property and equipment

     Property  and   equipment  are  stated  at  cost  and   depreciated   on  a
straight-line  basis over their estimated useful life of three years.  Leasehold
improvements are amortized on a straight-line  basis over their estimated useful
lives or the term of the lease,  whichever is shorter.  Maintenance  and repairs
are charged to expense as  incurred.  When assets are sold or retired,  the cost
and related  accumulated  depreciation  are removed  from the  accounts  and any
resulting gain or loss is included in operations.

Goodwill and other intangible assets

     Goodwill and other intangible assets include acquired  workforce,  core and
developed  technology and trade name. They are carried at cost less  accumulated
amortization.   Goodwill  and  other  intangible   assets  are  amortized  on  a
straight-line basis over the estimated periods of benefit,  which range from two
to five years.


                                       30
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Investments

     Investments in significant 20 to 50 percent owned  affiliates are accounted
for using the equity method of accounting,  whereby the investment is carried at
cost of  acquisition,  plus the Company's  equity in  undistributed  earnings or
losses since acquisition.  Impairments are recognized when management determines
that a permanent  impairment  has occurred.  Investments in less than 20 percent
owned affiliates are accounted for at cost, less permanent impairments.

Impairment of long lived assets

     Impairment  of  long  lived  assets,  including  investments,  identifiable
intangible  assets and related  goodwill is periodically  reviewed in accordance
with the provisions of Statement of Financial  Accounting  Standards  (SFAS) No.
121,  Accounting  for the  Impairment  of Long-Lived  Assets and for  Long-Lived
Assets to Be  Disposed  of.  Impairment  of  enterprise  level  goodwill is also
assessed  periodically in accordance with the provision of Accounting Principles
Board (APB) Opinion No. 17, Intangible Assets. An impairment review is performed
whenever events or changes in circumstances indicate that the carrying value may
not be recoverable.  Factors the Company considers important which could trigger
an   impairment   review   include,   but  are  not  limited   to,   significant
underperformance  relative to expected  historical or projected future operating
results,  significant changes in the manner of use of the acquired assets or the
strategy for the related  business,  significant  negative  industry or economic
trends.

Revenue recognition

     Revenues from software  license  arrangements  are recognized in accordance
with  the   provisions  of  Statement  of  Position  97-2,   "Software   Revenue
Recognition,"  ("SOP  97-2").  Under SOP 97-2,  the Company  recognizes  product
revenue  when  delivery has occurred if  persuasive  evidence of an  arrangement
exists,  the fee is fixed and  determinable,  and  collection  of the  resulting
receivable is probable.

     Revenues from maintenance arrangements are recognized ratably over the term
of the agreement, which is typically one year.

     When maintenance arrangements are sold together with software licenses, the
fair value of the  maintenance  services is carved out,  based upon the standard
renewal rate charged, and recognized ratably over the term of the agreement.

     Revenues from  professional  service  arrangements  are recognized over the
period  in which  the work is  performed,  using the  percentage  of  completion
method.

     In December  1999, the SEC issued Staff  Accounting  Bulletin No. 101 ("SAB
101"), Revenue Recognition in Financial  Statements." SAB 101 summarizes certain
of the SEC's views in  applying  generally  accepted  accounting  principles  to
revenue recognition in financial statements.  The Company adopted SAB 101 in the
first  quarter of fiscal  2001.  The adoption of SAB 101 did not have a material
effect on the Company's financial position or results of operations.

Software development costs

     The Company accounts for software  development costs in accordance with the
provisions  of Statement of Financial  Accounting  Standards  No. 86 ("SFAS 86")
"Accounting for the costs of computer software to be sold,  leased, or otherwise
marketed,"  and  Statement of Position 98-1 ("SOP  98-1"),  "Accounting  for the
costs of computer software developed or obtained for internal use."

     Costs incurred in the research and  development  of new software  products,
and enhancements to existing software  products,  are expensed as incurred until
technological   feasibility  has  been   established,   at  which  time  certain
development  costs  would be  capitalized  until the  product is  available  for
general release to customers.  To date, the Company's  software  development has
essentially  been completed  concurrent with the  establishment of technological
feasibility, and, accordingly, no costs have been capitalized.


                                       31
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Income taxes

     The Company  accounts  for income  taxes using the  liability  method under
which deferred tax assets and liabilities are calculated  using current tax laws
and rates in effect at the balance sheet date. A valuation allowance is recorded
when it is more  likely  than not that the net  deferred  tax asset  will not be
recovered.

Foreign currency translation

     The functional currency for the Japanese subsidiary is the applicable local
currency.  The translation  from the applicable  local currency to US dollars is
performed for balance sheet accounts  using current  exchange rates in effect at
the balance  sheet date and for revenue  and expense  accounts  using an average
exchange  rate during the period.  The  resulting  translation  adjustments  are
recorded as a component of other  comprehensive  income  (loss).  To date,  such
amounts have been insignificant. Gains or losses resulting from foreign currency
transactions are included in other income.

Stock-based compensation

     The Company  accounts for its  stock-based  compensation in accordance with
Accounting  Principles  Board Opinion No. 25 ("APB 25"),  "Accounting  for Stock
Issued to Employees" and Emerging  Issues Task Force No. 96-18  "Accounting  for
Equity Instruments that are issued to other than employees for acquiring,  or in
conjunction  with selling,  goods or services"  ("EITF 96-18").  The Company has
elected to adopt the  disclosure  only  provisions  of  Statement  of  Financial
Accounting   Standards  No.  123  ("SFAS  123"),   "Accounting  for  Stock-Based
Compensation,"  which  also  requires  pro forma  disclosures  in the  financial
statements as if the measurement  provisions of SFAS 123 had been adopted. Under
APB 25, compensation expense is based on the difference,  if any, on the date of
the grant,  between the deemed fair value of the  Company's  stock and  exercise
price.  Stock  options  issued  to  non-employees  have  been  accounted  for in
accordance with SFAS 123 and EITF 96-18.

Net loss per share

     Basic and  diluted  net loss per  share are  computed  in  accordance  with
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
128").  Basic  net  loss  per  share  is  computed  by  dividing  the  net  loss
attributable  to common  stockholders  for the  period by the  weighted  average
number of common  shares  outstanding  during the  period.  Diluted net loss per
share is  computed  by  dividing  the net loss for the  period  by the  weighted
average number of common and common stock equivalent shares  outstanding  during
the period.  Common equivalent  shares,  composed of common shares issuable upon
the exercise of stock options and warrants, are included in the diluted net loss
per share to the extent such shares are dilutive.

Comprehensive income

     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.

Segment reporting

     The Company  adopted  Statement of Financial  Accounting  Standards No. 131
"Disclosures  about  Segments of an Enterprise and Related  Information"  ("SFAS
131")  during  fiscal  1999.  SFAS  131  establishes   standards  for  reporting
information about operating segments in annual financial statements and requires
the  reporting  of  selected  information  about  operating  segments in interim
financial reports issued to stockholders.


                                       32
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     Operating  segments are defined as components of an enterprise  about which
separate financial  information is available that is evaluated  regularly by the
chief  operating  decision  maker in deciding how to allocate  resources  and in
assessing  performance.  Generally,  financial  information  is  required  to be
reported on the basis that it is reported  internally,  for  evaluating  segment
performance and deciding how to allocate resources to segments.

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 Hedging activities, an 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
is not expected to 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 expects to adopt the pronouncement as of December 1, 2001, the
beginning of its fiscal year 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 will apply the new
rule on accounting for long-lived  assets beginning in the first quarter of 2002
and has not yet determined the extent of such effects on the Company's financial
statements.


                                       33
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

3. CERTAIN RISKS AND CREDIT CONCENTRATIONS

     Financial   instruments,   which   potentially   subject   the  Company  to
concentrations of credit risk, consist  principally of cash and cash equivalents
and trade  accounts  receivable.  The  majority of the  Company's  cash and cash
equivalents as of November 30, 2001 are on deposit in a money market fund.

     The Company  provides  software  licenses and  maintenance  services to its
customers  and  generally  does not  require  collateral.  Although  the Company
maintains  an  allowance  for  potential  credit  losses  that it believes to be
adequate, a payment default on a significant sale could materially and adversely
affect its operating results and financial condition.  At November 30, 2001, two
customers  accounted  for 21% and 13% of accounts  receivable.  At November  30,
2000, two customers accounted for 28% and 14% of accounts receivable.

     The  Company  operates  in an  industry  that  is  characterized  by  rapid
technological   advances,   cyclical  market   patterns,   evolving   regulatory
requirements and industry standards. Any failure by the Company to anticipate or
to respond  adequately to technological  changes in its industry,  or changes in
regulatory  requirements or industry  standards,  could have a material  adverse
affect on the Company's business and operating results.

4. PROPERTY AND EQUIPMENT

     Property and equipment consists of (in thousands):


                                                             November 30 ,
                                                        ----------------------
                                                          2001         2000
                                                        ----------   ---------
Computer equipment and software .....................    $  2,590     $  3,135
Office and other equipment ..........................       1,099          826
                                                         --------     --------
                                                            3,689        3,961
Less accumulated depreciation and amortization ......      (2,831)      (3,153)
                                                         --------     --------
                                                         $    858     $    808
                                                         ========     ========

     Depreciation  and  amortization  expense  associated  with these assets was
$500,000,  $2.4 million,  and $6.0 million, for the fiscal years 2001, 2000, and
1999 respectively.

5. ACCRUED LIABILITIES

     Accrued liabilities consist of (in thousands):

                                                             November 30,
                                                        ----------------------
                                                          2001          2000
                                                        ----------   ---------
         Accrued compensation, severance and related
          benefits .................................     $    574     $  1,376
         Accrued legal settlement ..................            0        2,670
         Other .....................................        1,812        1,994
                                                         --------     --------
                                                         $  2,386     $  6,040
                                                         ========     ========

     Included in the long-term liabilities is $0 and $219,000 in fiscal 2001 and
fiscal  2000  respectively.  On  November  30,  2001,  the  amount of  $219,000,
representing an accrual for severance pay was reclassed to accrued  liability in
the  current  liability   section.   The  severance   payments  are  being  made
semi-monthly over a period ending in fiscal 2002.

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


                                       34
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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.

Impairment of investment in Slim Technology

     During the first quarter of fiscal 1999, the Company purchased a 40 percent
interest in Slim Technology Co, Ltd., ("Slim Tech"), a Korean company, 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. ACQUISITIONS

Acquisition of Chip & Chip, Inc.

     In fiscal 1999, the Company purchased certain of the assets and liabilities
of Chip & Chip for 2,000,000  shares of Company stock and cash of $800,000 for a
total consideration of $2.6 million. Transaction costs were $25,000.

     In conjunction with the acquisition, which was accounted for as a purchase,
assets acquired and liabilities assumed were as follows (in thousands):

Tangible assets acquired ..................    $   44
Acquired workforce ........................       180
Goodwill ..................................     1,639
Liabilities assumed .......................      (292)
                                               ------
   Net assets acquired ....................     1,571
   Purchased technology, expenses .........     1,034
                                               ------
      Purchase price ......................    $2,605
                                               ======

     The balance sheet, statement of operations and cash flows were consolidated
from September 2, 1999. The Company  recorded $1.8 million of goodwill and other
intangible assets.

     On June 13, 2000, the Company entered into an Asset Purchase Agreement with
the  management of Chip & Chip,  part of the EDA segment of the company.  Chip &
Chip Management purchased the assets and certain liabilities of Chip & Chip Inc.
("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


                                       35
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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
written-off on November 30, 2001.

Acquisition of Verilux Design Technology, Inc.

     In fiscal 1999,  the Company  acquired  certain  assets and  liabilities of
Verilux for  2,127,400  shares of Company stock and cash of $872,600 for a total
consideration of $2.8 million. Transaction costs were $25,000.

     In conjunction with the acquisition, which was accounted for as a purchase,
assets acquired and liabilities assumed were as follows (in thousands):

Tangible assets acquired ..................     $  101
Acquired workforce ........................        106
Goodwill ..................................      1,224
Liabilities assumed .......................        (73)
                                                ------
   Net assets acquired ....................      1,358
   Purchased technology, expenses .........      1,433
                                                ------
      Purchase price ......................     $2,791
                                                ======

     The balance sheet, statement of operations and cash flows were consolidated
from September 2, 1999. The Company  recorded $1.3 million of goodwill and other
intangible assets, which are being amortized over two to five years.

     The operations of Verilux was discontinued as of August 31, 2001.

Acquisition of Novo Systems Corporation

     In fiscal 1999, the Company purchased certain of the assets and liabilities
of Novo Systems Corporation ("Novo") for 1.6 million shares of Company stock and
cash of $1 million for a total consideration of $2.6 million.  Transaction costs
were $50,000.

     In conjunction with the acquisition, which was accounted for as a purchase,
assets acquired and liabilities assumed were as follows (in thousands):

Tangible assets acquired ..................    $  2,012
Acquired workforce ........................         323
Developed technology ......................         435
Core technology ...........................         704
Franchise fee .............................          77
Liabilities assumed .......................      (1,665)
                                               --------
   Nets assets acquired ...................       1,886
   Purchased technology, expenses .........         700
                                               --------
      Purchase price ......................    $  2,586
                                               ========

     The balance sheet, statement of operations and cash flows were consolidated
from October 21, 1999.  The Company  recorded $1.5 million of goodwill and other
intangible assets, which are being amortized over two to five years.

     A  total  of  $700,000 was expensed to the Statement of Operations as value
assigned  to in-process research and development projects. There was one project
in  process  at  the  date  of  acquisition, which was 25% complete. The Company
abandoned the project at the beginning of fiscal year 2001.


                                       36
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Acquisition of Inbox Software, Inc.

     On December  3, 1999,  the Company  purchased  all of the capital  stock of
InBox for  1,205,866  shares of  Company  stock at $3.59  each and cash of $7.64
million.  In addition,  the Company  assumed  1,194,134  options valued at $3.43
each.  The options  have an exercise  price of $0.18 per share.  The  conversion
ratio for Common Stock options was 0.844  Company  options for each InBox option
held. The converted  options  maintain their original  vesting  schedule.  Total
consideration was $16.2 million.  Transaction costs were $95,000. In conjunction
with the acquisition, which was accounted for as a purchase, assets acquired and
liabilities assumed were as follows (in thousands):

Tangible assets acquired .................    $    252
Core technology ..........................       1,983
Acquired workforce .......................         331
Trade name ...............................          96
Goodwill .................................      14,571
Liabilities assumed ......................      (1,998)
                                              --------
   Net assets acquired ...................      15,235
   Purchased technology expenses .........         925
                                              --------
      Purchase price .....................    $ 16,160
                                              ========

     The balance sheet, statement of operations and cash flows were consolidated
from  December 3, 1999.  The Company  recorded $17 million of goodwill and other
intangible assets, which are being amortized over two to five years.

     A total of $925,000 was expensed to the  statement of  operations  as value
assigned to the In Process Research and Development projects.

8. GOODWILL AND OTHER INTANGIBLE ASSETS

     During  the  fourth  quarter  of fiscal  2000,  the  Company  performed  an
impairment  assessment  of  the  identifiable  intangible  assets  and  goodwill
recorded upon the acquisition of Novo (including its subsidiary  Zycad TSS KK, a
company  incorporated in Japan).  The assessment was performed  primarily due to
the faster than expected decline in the Novo maintenance revenue, as well as the
discontinuation of a certain development project.

     As a result of the  review,  the  Company  recorded a  $571,000  impairment
charge in relation to  identifiable  intangible  assets of Novo. This charge was
determined based upon specific factors  supporting a decline in the value of the
assets  purchased,  in  particular,  the  reduction in workforce in the Japanese
office, as well as the  discontinuation  of a development  project that utilized
the purchased technology,  and the absence of any identified  alternative future
use of this technology.


                                       37
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     Amortization expense for goodwill and intangible assets for the years ended
November  30, 2001 and 2000 was  approximately  $3.3  million and $3.7  million,
respectively.   Goodwill,   intangible   assets  and  the  related   accumulated
amortization as of November 30, 2001 and 2000 was as follows:

                                           November 30
                                     -----------------------
                                        2001         2000
                                     ----------   ----------
Intangible assets
   Core technology ...............    $  2,687     $  2,687
   Developed technology ..........         435          435
   Acquired workforce ............         655          760
   Goodwill ......................      14,570       15,794
   Other .........................         173          173
                                      --------     --------
                                        18,520       19,849
Accumulated amortization .........      (8,359)      (4,736)
Impairment .......................        (571)        (571)
                                      --------     --------
                                      $  9,590     $ 14,542
                                      ========     ========

     The $1.3 million  decrease in the cost of intangible  assets was due to the
write-off  of  Verilux's  acquired  workforce  of $100,000  and goodwill of $1.2
million.

9. DIVESTITURE OF CHIP & CHIP, INC.

     In the third  quarter of fiscal  2000,  the Company  entered  into an Asset
Purchase  Agreement with the management of Chip & Chip,  part of the EDA segment
of the Company. As a result of this Agreement,  Chip & Chip management purchased
the assets and certain liabilities of Chip & Chip for $2.58 million,  payable in
three  installments  over two years.  The  proceeds  are  collateralized  by one
million  shares of Company  stock and 700,000  fully vested  options to purchase
Company's stock held by Chip & Chip  management,  as well as 100% of Chip & Chip
capital stock.

     At the time of the transaction, Chip & Chip was a development stage company
with no  revenue.  Based  on a number  of  factors,  including  the  absence  of
significant  financial  investment by the buyer and the fact that payment of the
sales price is dependent upon the future  operating  results of the  transferred
business, the Company determined that the transaction could not be accounted for
as a divestiture because the risks of the business had not been transferred, and
should be accounted for in accordance with Staff Accounting  Bulletin,  Topic 5E
"Accounting for the divestiture of a subsidiary or other business operation". As
a result,  the assets and  liabilities  disposed of have been  segregated on the
balance  sheet.  Any gain or loss on sale will be  recognized  on payment of the
final  installment.  Any  operating  income or losses  generated  by Chip & Chip
subsequent to the transaction are recognized in the Company's accounts,  using a
one  quarter  time lag,  until the final  installment  of the  consideration  is
received by Ingenuus. The operating results for the third quarter of fiscal 2000
were not significant. In addition, the Company performed an impairment review of
the  net  assets  disposed  of  related  to Chip & Chip,  based  on a  projected
discounted  cash flow method using a discount  rate  commensurate  with the risk
inherent in the  business  model.  Based on this review,  no further  write down
appeared necessary.

     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 written-off on November 30, 2001.


                                       38
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

10. LOAN TO RELATED PARTY

     During the fourth quarter of fiscal 1999, the Company made a bridge loan to
InBox.  This loan was  unsecured,  bore no interest and was repayable on demand.
The Company  subsequently  acquired  InBox on  December  3, 1999.  This loan was
eliminated in the acquisition of InBox.

     During  fiscal 2001,  the Company made loans to two employees in the amount
of $40,000 and $22,000.  As of January 31, 2002,  one of the loans has been paid
in  full.  The  repayment  date of the  other  loan  has  been  extended  for an
additional year from the original date of repayment,  in November 2001. The loan
is now due in November 2002. The Company deems the loan collectible.

     Subsequent  to November  30,  2001,  the Company  made  another loan to one
employee  of  $12,000,  to be  repaid in May 2002.  The  Company  deems the loan
collectible.

11. LEASE COMMITMENTS

     The Company leased its primary  operating  facility under a  non-cancelable
operating lease  agreement,  which expired in November 2001.  Rent expense,  net
incurred  under  operating  leases was  approximately  $516,000,  $664,000,  and
$664,000 for the years ended November 30, 2001, 2000, and 1999, respectively.

     Future minimum lease  commitments under operating leases as of November 30,
2001 are as follows (in thousands):

Year Ended November 30,
-----------------------
    2002 .....................................................    $  373
    2003 .....................................................       328
    2004 .....................................................       327
    2005 .....................................................       325
    2006 .....................................................       325
    For the years thereafter .................................     1,782
                                                                  ------
    Total minimum lease and equipment lease payments .........    $3,460

12. 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  is  as  follows  (in
thousands):

                                              Year Ended
                                             November 30,
                                         --------------------
                                           2001        2000
                                         --------   ---------
  United States ......................    $  777     $1,884
  Asia ...............................       889        996
  Other International ................        60         50
                                          ------     ------
  Total ..............................    $1,726     $2,930
                                          ======     ======

     For the year  ended  November  30,  2001,  three  customers  accounted  for
approximately  19%,  15%,  and 13% of revenue.  For the year ended  November 30,
2000, three customers accounted for approximately 24%, 10%, and 7% of revenue.


                                       39
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

13. STOCKHOLDERS' EQUITY (DEFICIENCY)

Common Stock

     Each share of Common Stock has the right to one vote. The holders of Common
Stock  are also  entitled  to  receive  dividends  whenever  funds  are  legally
available  and when  declared  by the Board of  Directors,  subject to the prior
rights  of  holders  of all  classes  of stock at the  time  outstanding  having
priority rights as to dividends.

     At November 30, 2001,  the Company had reserved  shares of Common Stock for
future issuance as follows (in thousands):

         Shares available for grant .........     2,834
         Stock options outstanding ..........     7,236
                                                  -----
                                                 10,070
                                                 ======

Treasury Stock

     During fiscal 1999, the Company began acquiring  shares of its common stock
to help the Company achieve its long-term goal of enhancing  shareholder  value.
The Company purchased 482,000, 72,000 and 2,135,000 shares of common stock at an
aggregate  cost of  $169,000,  $465,000  and $2.0  million  in the  years  ended
November 30, 2001,  2000 and 1999  respectively.  In the year ended November 30,
2000, the Company also received  500,000 shares of common stock for an aggregate
value of $633,000, in connection with the sale of Chip & Chip (see note 9).

     On reissuance of treasury stock, any excess of the average acquisition cost
of the shares over the proceeds from  reissuance  will be charged to accumulated
deficit.

14. EMPLOYEE STOCK AND OTHER BENEFIT PLANS

Employee Stock Plans

     In 1996,  the Board of  Directors  adopted the 1996 Stock  Option Plan (the
"1996 Plan").  Under this plan, 4,500,000 shares have been reserved for issuance
to directors,  officers,  employees and consultants to the Company at prices not
less than the fair market value for incentive stock options.  At the 1999 Annual
Stockholders  Meeting,  the  stockholders  approved a 2,000,000  increase in the
number of shares  reserved  for  issuance  under the 1996  Plan.  These  options
generally vest and become  exercisable at an annual rate of 25%, and expire five
to ten years from the date of grant.  In March 2000,  the vesting  schedule  was
modified to allow  options  issued  under the 1996 Plan to vest 25% in the first
year, and monthly thereafter,  and also provided for full vesting upon merger or
sale of substantially all the assets of the Company.

     In 1997, the Board of Directors  adopted the Company's 1997 Director Option
Plan (the  "Director  Plan") and  reserved  250,000  shares of common  stock for
grants of options to each outside  director.  The Director Plan provides for the
automatic  grant to outside  directors of an option to purchase 25,000 shares of
common stock at the time the director  joins the board and an option to purchase
5,000 shares of common stock upon the outside  director's  annual  reelection to
the Board. At the 2001 Annual Stockholders Meeting, the stockholders approved an
amendment to the Directors  Plan to increase the initial option grant to outside
directors to 50,000  shares of common  stock at the time the director  joins the
board.

     In 2000,  the Board of  Directors  adopted the 2000 Stock  Option Plan (the
"2000 Plan").  Under this plan, 5,000,000 shares have been reserved for issuance
to directors,  officers,  employees and consultants to the Company at prices not
less than the fair market  value for  incentive  stock  options.  These  options
generally  expire  five to ten  years  from the  date of  grant.  These  options
generally  vest and become  exercisable  at a rate of 25% in the first year, and
monthly  thereafter,  and expire  five to ten years from the date of grant.  The
2000 Plan also  provides for full  vesting upon merger or sale of  substantially
all the assets of the Company.


                                       40
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     A summary of activity  under the 1996 Plan,  the Director Plan and the 2000
Plan, is as follows (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                   Outstanding Options
                                                               -----------------------------
                                                    Shares                       Weighted
                                                  Available       Number         Average
                                                  for Grant     of Shares     Exercise Price
                                                 -----------   -----------   ---------------
<S>                                                 <C>           <C>            <C>
Balances November 30, 1998 ...................       1,811         2,854         $  6.01
Options reserved under the 1996 Plan .........       2,000            --         $    --
   Options granted ...........................      (6,317)        6,317         $  1.17
   Options canceled ..........................       3,878        (3,878)        $  4.67
                                                    ------        ------
Balances November 30, 1999 ...................       1,372         5,293         $  1.22
Options reserved under the 2000 Plan .........       5,000            --         $    --
   Options granted ...........................      (4,850)        4,850         $  1.35
   Options canceled. .........................       2,268        (2,268)        $  1.49
   Options exercised .........................          --        (1,161)        $  0.49
                                                    ------        ------
Balances November 30, 2000 ...................       3,790         6,714         $  1.35
   Options granted ...........................      (3,914)        3,914         $  0.11
   Options canceled. .........................       2,958        (2,958)        $  1.12
   Options exercised .........................                      (434)        $  0.18
                                                                  ------
Balances November 30, 2001 ...................       2,834         7,236         $  0.11
                                                    ======        ======
</TABLE>

     At November 30,  2001,  2,729,000  and 105,000  shares were  available  for
future grant under the 2000 Plan and the Director Plan, respectively.

     During fiscal 2001,  140,000 options were issued to sales  representatives.
These options vest on  achievement of certain sales targets and expire ten years
after the date of grant.  Compensation expense will be recorded as these targets
are met. No compensation expense has been recorded in fiscal 2001 in relation to
these grants.

     During fiscal 2001, no warrants were issued.

     During fiscal 2001, 286,000 options were issued to non-employees  under the
2000 Plan. The options vest over 4 years and were valued using the Black-Scholes
option  pricing model with the following  assumptions;  risk free interest rate,
3.5%,  expected  life of 4 years,  expected  volatility  of 100% and no expected
dividends.  Compensation  expense of $4,682 was calculated and has been recorded
in the Statement of Operations.

     Additional  information  regarding  options  outstanding as of November 30,
2001 is as follows:

<TABLE>
<CAPTION>
                                      Options Outstanding
                         ---------------------------------------------
                                     Weighted Ave.
                                                                            Options Exercisable
                                       Remaining          Weighted       --------------------------
        Range of                      Contractual           Ave.                     Weighted Ave.
     Exercise Prices      Number       Life (Yrs)      Exercise Price     Number     Exercise Price
------------------------ --------   ---------------   ----------------   --------   ---------------
<S>                      <C>        <C>               <C>                <C>        <C>
$0.10 ..................    627            9.8            $  0.10             0         $  0.00
$0.11...................  5,665            8.4               0.11         1,990            0.11
$0.3438-$0.3750.........    825            8.8               0.37           271            0.38
$0.6562-$1.4688.........    119            9.3               0.84             0            0.00
                          -----                                           -----
                          7,236            8.6            $  0.11         2,261         $  0.14
                          =====                                           =====
</TABLE>


                                       41
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     The  weighted  average  fair value of rights or  options  granted in fiscal
2001,  2000,  and 1999 was  $0.11,  $1.35 and  $1.17,  respectively.  2,261,000,
1,046,000 and 208,000 options were  exercisable at November 30, 2001,  2000, and
1999, respectively.

Fair value disclosures

     SFAS 123 requires that the fair value of stock-based awards to employees be
calculated  through the use of option  pricing  models,  even though such models
were developed to estimate the fair value of freely tradable, fully transferable
options  without  vesting  restrictions,  which  significantly  differ  from the
Company's stock option awards. These models also require subjective assumptions,
which greatly affect the calculated  values. The fair value of each option grant
is estimated on the date of grant using the  Black-Scholes  option pricing model
with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                                  Year Ended November 30,
                                    ----------------------------------------------------
                                         2001              2000               1999
                                    --------------   ----------------   ----------------
<S>                                 <C>              <C>                <C>
Risk-free interest rate .........    3.0%-4.5%        5.89%-6.78%        4.47%-5.88%
Expected life ...................    5 years          5 years            5 years
Dividend yield ..................       --                --                 --
Volatility ......................      100%              100%               100%
</TABLE>

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is  amortized  to expense over the  options'  vesting  period.  Ingenuus
Corporation's pro forma information follows:

<TABLE>
<CAPTION>
                                                             Year Ended November 30,
                                                  ---------------------------------------------
                                                       2001            2000            1999
                                                  -------------   -------------   -------------
<S>                                               <C>             <C>             <C>
Net loss attributable to common stockholders        $ (11,722)      $ (21,171)      $ (26,298)
                                                    =========       =========       =========
Net loss--SFAS 123 adjusted                         $ (11,886)      $ (23,503)      $ (27,101)
                                                    =========       =========       =========
Net loss per share--as reported (Note 2) Basic
 and diluted                                        $   (0.31)      $   (0.58)      $   (0.91)
                                                    =========       =========       =========
Net loss per share--SFAS 123 adjusted Basic
 and diluted                                        $   (0.32)      $   (0.65)      $   (0.94)
                                                    =========       =========       =========
</TABLE>

     The effects of applying SFAS No. 123 in this pro forma  disclosure  may not
be  indicative  of  future  amounts.  Additional  awards  in  future  years  are
anticipated.

Employee stock purchase plan

     In April 1998,  the Company  adopted the 1997 Employee  Stock Purchase Plan
(the "Purchase  Plan") and reserved  500,000 shares of common stock for issuance
under the Purchase  Plan.  The Purchase  Plan  authorizes  the granting of stock
purchase  rights to eligible  employees  during two-year  offering  periods with
exercise dates once a year in the first year and approximately  every six months
thereafter. For fiscal 2001, the first offering period commenced in October 2000
and ended on March 31, 2001, and the second offering  period  commenced in April
2001 and ended on September 30, 2001.

     Shares are purchased through employee payroll deductions at purchase prices
equal to 85% of the  lesser  of the fair  market  value of the  Common  Stock at
either the first day of each  offering  period or the date of  purchase.  In the
years ended  November  30, 2001,  2000 and 1999,  62,000,  145,000,  and 174,000
shares had been issued under the Purchase  Plan at an average price of $0.72 per
share.


                                       42
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     The estimated  fair value of purchase  rights under the Company's  Purchase
Plan is  determined  using the  Black-Scholes  pricing  model with the following
assumptions for the year ended November 30, 2001; risk-free interest rate--3.5%,
expected average  life--0.9  years,  expected  volatility--100%  and no expected
dividends.  The weighted  average per share fair value of purchase  rights under
the Purchase Plan during fiscal 2001 was $0.20.

401(k) Savings Plan

     The  Company's  401(k)  savings  plan  (the  "401(k)  Plan")  is a  defined
contribution retirement plan intended to qualify under Section 401(a) and 401(k)
of the Internal Revenue Code. Employees meeting the eligibility requirements, as
defined,  may contribute  specified  percentages of their salaries to the 401(k)
Plan  pursuant  to the  terms of the  Plan.  Contributions  by the  Company  are
discretionary  and no contributions  have been made by the Company for the years
ended November 30, 2001, 2000, and 1999.

15. INCOME TAXES

     The provision for income taxes for the years ended  November 30 consists of
(in thousands):

                                                 2001      2000         1999
                                               --------   ------   -------------
Current:
   Federal ...................................  $  --     $ --       $  (2,100)
   State .....................................     --       --               4
   Foreign ...................................      3       --              37
                                                -----     ----       ---------
      Total current ..........................      3       --          (2,059)
                                                -----     ----       ---------
Deferred:
   Federal ...................................     --       --           1,790
   State .....................................     --       --             310
                                                -----     ----       ---------
      Total deferred .........................     --       --           2,100
                                                -----     ----       ---------
      Total provision for income taxes .......  $   3     $ --       $      41
                                                =====     ====       =========

     The  provision  for  income  taxes has been  included  within the loss from
discontinued  operations  within the Statement of Operations in fiscal year 2000
and 1999.

     The  provision  for income  taxes  differs  from the  amounts  computed  by
applying  the  statutory  federal  income tax rate to income  before  taxes as a
result of the following (in thousands):

<TABLE>
<CAPTION>
                                                          2001           2000           1999
                                                      ------------   ------------   ------------
<S>                                                   <C>            <C>            <C>
Income tax benefit ..................................   $ (3,985)      $ (7,198)      $ (8,927)
In process research and development .................         --            314          1,404
Goodwill amortization ...............................      1,358          1,849             --
State income taxes, net of federal benefit ..........       (679)        (1,235)             4
Net operating losses not benefited ..................      3,395          6,448          7,328
Other ...............................................        (86)          (178)           232
                                                        --------       --------       --------
   Total provision for income taxes .................   $      3       $     --       $     41
                                                        ========       ========       ========
</TABLE>


                                       43
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     The  deferred  tax assets  valuation  allowance  at  November  30,  2001 is
attributed to U.S. federal and state deferred tax assets, which result primarily
from the tax effect of future reversing temporary  differences and net operating
loss  carry-forwards.  Management  believes that the realization of deferred tax
assets was not assured at  November  30,  2001.  Significant  components  of the
Company's deferred tax assets were as follows (in thousands):

<TABLE>
<CAPTION>
                                                              November 30,
                                                 --------------------------------------
                                                     2001          2000         1999
                                                 -----------   -----------   ----------
<S>                                              <C>           <C>           <C>
Deferred tax assets:
   Net operating loss ........................    $  10,208     $  10,885     $  5,525
   Expenses not currently deductible .........        1,151         3,554        2,530
   Depreciation and amortization .............        1,054         1,023           43
   Tax credit carryforwards ..................          569           915        1,831
                                                  ---------     ---------     --------
   Deferred tax assets .......................       12,982        16,377        9,929
   Less: valuation allowance .................      (12,982)      (16,377)      (9,929)
                                                  ---------     ---------     --------
   Net deferred tax assets ...................    $      --     $      --     $     --
                                                  =========     =========     ========
</TABLE>

     At November 30, 2001,  the Company had net  operating  loss  carry-forwards
available  to offset  future  taxable  income for federal and state income taxes
purpose of  approximately  $30  million  and $14  million,  respectively.  These
carryforwards  expire  between 2005  through  2020 if not utilized  before these
dates.

     Under the tax Reform Act of 1986,  the  amounts  of and  benefits  from net
operating   loss   carryforwards   may  be   impaired   or  limited  in  certain
circumstances.  Events  which cause  limitation  in the amount of net  operating
losses that the Company may utilize in any year include, but are not limited to,
a  cumulative  ownership  change of more than 50% as defined,  over a three-year
period.

16. (LOSS) EARNINGS PER SHARE

     In accordance  with the disclosure  requirements of SFAS 128, the following
table sets forth a  reconciliation  of the  numerator  and  denominator  used to
calculate  basic and diluted net loss per share for the  periods  indicated  (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                             Year Ended November 30,
                                                                  ----------------------------------------------
                                                                       2001            2000             1999
                                                                  -------------   --------------   -------------
<S>                                                               <C>             <C>              <C>
Numerator:
   (Loss) from continuing operations ..........................     $ (10,493)      $  (21,702)      $  (5,072)
   (Loss) from discontinued operations ........................          (524)          (3,903)        (21,226)
   Gain (loss) on disposal of discontinued operations .........          (705)           4,434              --
                                                                    ---------       ----------       ---------
   Net loss attributable to common stockholders ...............     $ (11,722)      $  (21,171)      $ (26,298)
                                                                    =========       ==========       =========
Denominator--Basic and diluted earnings (loss) per share
 Weighted average common stock outstanding ....................        37,215           36,292          28,831
                                                                    =========       ==========       =========
Earnings (loss) per share--basic and diluted ..................
   (Loss) from continuing operations ..........................     $   (0.28)      $    (0.60)      $   (0.17)
   (Loss) from discontinued operations ........................       (  0.01)         (  0.10)        (  0.74)
   Gain (loss) on disposal of discontinued operations .........       (  0.02)            0.12              --
                                                                    ---------       ----------       ---------
   Net loss attributable to common stockholders ...............     $   (0.31)      $    (0.58)      $   (0.91)
                                                                    =========       ==========       =========
</TABLE>


                                       44
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                                Year Ended November 30,
                                                              ----------------------------
                                                                2001      2000      1999
                                                              -------   -------   --------
<S>                                                           <C>       <C>       <C>
Antidilutive securities including options and warrants, not
 included in diluted net loss per share calculation:
Stock options .............................................    7,236     6,714     4,864
Shares subject to repurchase rights .......................       --        --       243
Stock warrants ............................................       --        27        --
                                                               -----     -----     -----
Total antidilutive securities .............................    7,236     6,741     5,107
                                                               =====     =====     =====
</TABLE>

17. LEGAL PROCEEDINGS

Class Action Lawsuits

     The Company was the defendant in a class action  lawsuit,  Howard Jonas, et
al. v. Aspec Technology, Inc. (Ingenuus Corporation), filed in July 1998. During
fiscal  2001,  the Company  received an order of final  judgment  approving  the
settlement and dismissing the case with prejudice as to all defendants. Pursuant
to the terms of the settlement agreement and the court's order, Aspec (now known
as  Ingenuus  Corporation)  paid $1.4  million  into the  settlement  fund,  and
thereafter,  issued 1.75 million shares of common stock to the plaintiff  class.
The settlement  cost,  including the stock  element,  using a price of $0.50 per
share, the fair market value of the Company's common stock at November 30, 2000,
had been accrued as of November 30, 2000.

Derivative Lawsuit

     Certain  of the  Company's  current  and  former  officers,  directors  and
shareholder entities were also named as defendants in a derivative lawsuit filed
in November 1998. A Memorandum of Understanding,  with the objective of settling
the  derivative  litigation,  was executed by the  defendants in fiscal 2001. In
February 2001, at a hearing before the court, the parties advised the court that
they had reached  agreement  on a  Stipulation  of  Settlement.  The  settlement
agreement,  which  would fully and  finally  settle and  resolve the  derivative
litigation,  including  a  dismissal  of the  action  with  prejudice  as to all
defendants. The agreement requires the Company to pay the derivative plaintiffs'
attorneys' fees in the amount of $395,000,  which was accrued as of November 30,
2000,  as well as to make  certain  changes  to the  Company's  audit  committee
charter.  In March 2001, the court entered an Order approving the Stipulation of
Settlement and dismissing the matter with prejudice as to all defendants.

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.  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. An arbitrator was appointed,  and
the arbitration  was scheduled for September 8, 2000. The  arbitration  date was
suspended by the AAA, and 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.

NASDAQ Inquiry

     In July 2001,  the Company  failed to maintain  NASDAQ's  minimum bid price
closing  requirement  of $1.00 and that such  failure had  continued  beyond the
ninety-day  probationary  period  allowed  under the  Rules.  Consequently,  the
Company's stock was delisted from NASDAQ on July 26, 2001.


                                       45
<PAGE>

                              INGENUUS CORPORATION

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

18. REPRICING OF STOCK OPTIONS

     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,  6,212,413,  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 year  ended  November  30,  2001,  the  Company  did not record any
compensation  expenses  related to  repricing of stock  options  since the stock
market price was below the repriced option price.

ITEM  9. CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

     On March 5,  2001,  PricewaterhouseCoopers  LLP  ("PricewaterhouseCoopers")
resigned   as  the   Company's   independent   accountants.   The   reports   of
PricewaterhouseCoopers  on the  financial  statements of the Company for each of
the past two fiscal years  contained no adverse opinion or disclaimer of opinion
and were not qualified or modified as to uncertainty,  audit scope or accounting
principles,  except that the reports of  PricewaterhouseCoopers on the financial
statements  of the  Company  for each of the past two  years  was  qualified  to
express a substantial  doubt about the Company's  ability to continue as a going
concern. The independent accountants resigned,  and, accordingly,  the change in
independent  accountants  did  not  require  approval  by  the  Company's  Audit
Committee.  During the  Company's  two most recent  fiscal years and through the
date   of  this   Report,   the   Company   has   had  no   disagreements   with
PricewaterhouseCoopers  on any matter of  accounting  principles  or  practices,
financial  statement   disclosure,   or  auditing  scope  or  procedure,   which
disagreements,  if not resolved to the  satisfaction  of  PricewaterhouseCoopers
would have caused it to make  reference  thereto in its report on the  financial
statements of the Company for such years except that a  disagreement  arose with
respect to a Fourth Quarter 2000 transaction with a customer and the recognition
of revenue.  After direct  discussions with the customer,  management  concluded
that  the  revenue   related  to  the   transaction   should  be  deferred   and
PricewaterhouseCoopers  agreed with management's conclusion. The Company's audit
committee   discussed   the   subject   matter   of   this   disagreement   with
PricewaterhouseCoopers.  The Company has  authorized  PricewaterhouseCoopers  to
respond  fully to the  inquiries  of the  successor  accountant  concerning  the
subject matter of such disagreement. During the Company's two most recent fiscal
years and through  the date of this  Report,  the Company has had no  reportable
events (as defined in Item  304(a)(1)(v)  of  Regulation  S-K),  except that the
report from  PricewaterhouseCoopers  to the  Company's  Audit  Committee for the
Fiscal  Year 2000  audit  noted a  material  weakness  in the  internal  control
structure relating to the retention of documents and contract administration. On
March  22nd,  2001 the  Company  retained  Moss Adams LLP as the  Company's  new
independent  accountants.  The  Company  requested  that  PricewaterhouseCoopers
furnish it with a letter  addressed to the Commission  stating whether or not it
agrees with the above statements. A copy of such letter, dated March 9, 2001, is
filed as  Exhibit  16.2 to the Form 8-K filed  with the  Commission  on March 9,
2001.


                                       46
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     (a)  Executive Officers and Directors--See the section entitled  "Executive
          Officers and Directors" in Part I, Item 1 hereof.

     (b)  Section 16(a) Beneficial Ownership Reporting  Compliance--based solely
          on the  Company's  review of filings made under  Section  16(a) of the
          Securities  Exchange Act of 1934  received by the Company,  or written
          representations  from certain reporting persons,  the Company believes
          that all Section  16(a)  filings for fiscal 2001 were made in a timely
          fashion.

ITEM 11. EXECUTIVE COMPENSATION

Compensation Of Executive Officers

     The  following  table sets forth all  compensation  received  for  services
rendered to the Company and the Company's  subsidiaries in all capacities during
the last three fiscal years by (i) the  Company's  Chief  Executive  Officer and
(ii) the Company's  four other most highly  compensated  executive  officers who
were serving in that capacity during fiscal 2001.  These  individuals are herein
after referred to as the "Named Executive Officers."

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                                  Long Term
                                                      Annual Compensation(1)                     Compensation
                                      -------------------------------------------------------   -------------
                                       Fiscal                                  Other Annual         Awards
Name and Principal Position             Year      Salary(2)     Bonus(3)     Compensation(4)      Options(5)
------------------------------------- --------   -----------   ----------   -----------------   -------------
<S>                                   <C>        <C>           <C>          <C>                 <C>
Michael J. Carroll(7) ...............  2001       $270,700          --             --               350,000
 Chairman and Chief Executive          2000        256,192      $44,739            --               150,000
 Officer                               1999         21,795          --             --             1,000,000

Conrad J. Dell'Oca(6) ...............  2001       $268,344          --             --                   --
 Former Chairman, Chief Executive      2000        238,365      $28,550            --               100,000
 Officer and President                 1999        232,095       14,971            --               100,000

Douglas E. Klint(8) .................  2001       $215,700          --             --                50,000
 Vice President, Secretary and         2000        203,850      $13,165            --                25,000
 General Counsel and Former            1999        196,878       12,594            --               155,000
 Interim President and
 Chief Financial Officer

John R. Walsh(9) ....................  2001       $179,453          --             --
 Vice President, Sales and former      2000        149,684      $11,811            --               193,500
 Vice President, Operations            1999         18,827          --             --                56,500

Christopher S. Williams(10) .........  2001       $161,277          --             --               250,000
 Chief Technical Officer               2000        116,913      $ 7,294            --               250,000
</TABLE>

------------
     (1)  Excludes  perquisites and other personal benefits which for each Named
          Executive  Officer  did not exceed the lesser of $50,000 or 10% of the
          total annual salary and bonus for such officer.
     (2)  Includes deferred salary under the Company's 401(k) Plan.
     (3)  Includes bonus awards earned for  performance in the fiscal year noted
          even though such  amounts are payable in  subsequent  years.  Excludes
          bonus awards paid in the fiscal year noted but earned in prior years.
     (4)  Represents  incentive  payments  based  on  the  Company's  Management
          Incentive Compensation Plan. Includes incentive payments earned in the
          fiscal year  indicated  even if such bonuses were paid in a subsequent
          fiscal year.
     (5)  Options granted in fiscal 2001.
     (6)  Dr.  Dell'Oca  resigned as  President  and CEO in January  1999 and as
          Chairman in June 2001.
     (7)  Mr.  Carroll  joined the  Company in  October  1999 and was  appointed
          Chairman in June 2001.


                                       47
<PAGE>

     (8)  Mr. Klint joined the Company in August 1998.
     (9)  Mr. Walsh joined the Company in October 1999.
     (10) Mr. Williams joined the Company in February 2000.

Option Grants In Fiscal Year 2001

     The following  table sets forth certain  information  concerning  grants of
stock  options to each of the Named  Executive  Officers  during the fiscal year
ended November 30, 2001.

<TABLE>
<CAPTION>
                                                     Individual Grants(1)
                                  ----------------------------------------------------------
                                                                                                      Potential
                                                                                                  Realizable Value
                                                                                                 at Annual Rates of
                                                  % of Total        Exercise                         Stock Price
                                               Options Granted      or Base                       Appreciation for
                                                                                                   Option Term(2)
                                   Options     to Employees in     Price Per     Expiration    -----------------------
Name                               Granted       Fiscal Year         Share          Date           5%           10%
--------------------------------- ---------   -----------------   -----------   ------------   ----------   ----------
<S>                               <C>         <C>                 <C>           <C>            <C>          <C>
Michael J. Carroll ..............  350,000           12.2%          $ 0.11       1/17/2011      $27,212      $61,359
Conrad J. Dell'Oca ..............        0                              --             --
Douglas E. Klint ................   50,000            1.7%          $ 0.11       1/17/2011      $ 3,458      $ 8,765
John R. Walsh ...................        0                              --             --
Christopher S. Williams .........  250,000            8.7%          $ 0.11       1/17/2011      $17,295      $43,828
</TABLE>

------------
(1)  Each of these options was granted pursuant to the Company's 1996 Stock Plan
     and is subject to the terms of such plan.  These options were granted at an
     exercise price equal to the fair market value of the Company's Common Stock
     as determined by the Board of Directors of the Company on the date of grant
     and,  as long as the  optionee  maintains  continuous  employment  with the
     Company,  vest over a four year  period  at the rate of  one-fourth  of the
     shares on the first  anniversary  of the date of grant and  1|M/48th of the
     remaining shares per month thereafter.
(2)  In accordance with the rules of the Securities and Exchange Commission (the
     "Commission"),  shown are the  hypothetical  gains or "option spreads" that
     would exist for the  respective  options.  These gains are based on assumed
     rates of annual compounded stock price  appreciation of 5% and 10% from the
     date the option  was  granted  over the full  option  term.  The 5% and 10%
     assumed rates of  appreciation  are mandated by the rules of the Commission
     and do not  represent  the  Company's  estimate  or  projection  of  future
     increases in the price of its Common Stock.

               AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUES

     The  following  table sets forth  certain  information  concerning  options
exercised by the Named Executive  Officers during fiscal year ended November 30,
2001, and exercisable and unexercisable  stock options held by each of the Named
Executive Officers as of November 30, 2001.

<TABLE>
<CAPTION>
                                                                             Fiscal Year-End Option Values
                                                            ----------------------------------------------------------------
                                    Shares                                                         Value of Unexercised
                                   Acquired                      Number of Unexercised           In-the-Money Options at
                                                              Options at Fiscal Year End            Fiscal Year End(1)
                                      on          Value     -------------------------------   ------------------------------
Name                               Exercise     Realized     Exercisable     Unexercisable     Exercisable     Unexercisable
--------------------------------- ----------   ----------   -------------   ---------------   -------------   --------------
<S>                                   <C>          <C>         <C>              <C>                 <C>             <C>
Michael J. Carroll ..............     0            $0          573,957          926,043             $0              $0
Conrad J. Dell'Oca ..............     0             0          135,411           64,589              0               0
Douglas E. Klint ................     0             0          104,352          113,648              0               0
John R. Walsh ...................     0             0           97,958          152,042              0               0
Christopher S. Williams .........     0             0           95,436          404,564              0               0

------------
(1)  The value of an "in the money" of option represents the difference  between
     the  exercise  price  of such  option  and the  fair  market  value  of the
     Company's Common Stock at November 30, 2001, multiplied by the total number
     of shares subject to the option.
</TABLE>


                                       48
<PAGE>

Compensation Of Directors

     Employee  directors are not  compensated  for their  services as directors.
Outside  directors  receive  $10,000  per  year  for  serving  on the  Board  of
Directors,  $1,000 for  attendance at each Board meeting and $2,000 per year for
serving as a member of the Audit or Compensation  Committees.  Outside directors
are reimbursed for all reasonable  expenses  incurred by them in attending Board
and  Committee  meetings.  In  addition,  each  outside  director is eligible to
participate  in the  Company's  1997 Director  Stock Option Plan (the  "Director
Plan").  Under  the  Director  Plan  each  outside  director,   at  present,  is
automatically  granted a nonstatutory option to purchase 50,000 shares of Common
Stock upon the date such person first becomes an outside director.  In addition,
each  director  who has been an outside  director  for at least six months  will
automatically  receive a nonstatutory  option to purchase 5,000 shares of Common
Stock upon such director's  annual  reelection to the Board by the stockholders.
Options  granted  under  the  Director  Plan  have a term  of ten  years  unless
terminated  sooner upon  termination of the  optionee's  status as a director or
otherwise  pursuant to the  Director  Plan.  The  exercise  price of each option
granted  under the Director Plan is equal to the fair market value of the Common
Stock on the date of grant.  Options granted under the Director Plan are subject
to cumulative  yearly vesting over a four year period  commencing at the date of
grant.

     Messrs. Bell and Wilson each received stock options under the Director Plan
to  purchase  25,000  shares  upon the dates when they  first  became an outside
director.  Mr. Bell was granted an additional  5,000 shares on October 21, 1999,
the date of the Company's 1999 Annual Meeting of Stockholders  and also on April
25, 2000, the date of the Company's 2000 Annual Meeting of Stockholders. Messrs.
Bell and Wilson were granted stock  options for an  additional  25,000 shares on
January 18, 2001 and for an additional 5,000 shares on May 16, 2001, the date of
the Company's 2001 Annual  Meeting of  Stockholders.  Mr. Recine  received stock
options under the Director Plan to purchase 50,000 shares upon the date he first
became an outside director.

Compensation Committee Interlocks and Insider Participation

     The  Compensation  Committee of the Board of Directors  during  fiscal year
2001 consisted of Messrs.  Bell, Wilson and Recine. None of such individuals has
been  or is an  officer  or an  employee  of  the  Company.  No  member  of  the
Compensation  Committee or executive  officer of the Company has a  relationship
that would constitute an interlocking  relationship  with executive  officers or
directors of another entity.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of November 30, 2001, the following persons were known by the Company to
be the beneficial  owners of more than 5% of the Company's Common Stock.  Shares
of Common  Stock  that a person has the right to  acquire  within  sixty days of
January 31, 2002 are deemed outstanding for purposes of computing the percentage
ownership of the person holding such rights,  but are not deemed outstanding for
purposes of computing the percentage ownership of any other person.

                                           Beneficial Ownership
                                     --------------------------------
Name                                  Number of Shares     Percent(1)
----------------------------------   ------------------   -----------
Conrad J. Dell'Oca(2) ............       2,766,604            7.14%
 7455 Longard Road
 Livermore, CA 94550

Summit Partners, L.P.(3) .........       2,601,008            6.73%
 499 Hamilton Avenue, Suite 200
 Palo Alto, California 94301

Yen Chang ........................       2,129,070            5.50%
 7455 Longard Road
 Livermore, CA 94550

------------
(1)  Applicable  percentage  is based  on  38,623,062  shares  of  Common  Stock
     outstanding as of January 31, 2002.


                                       49
<PAGE>

(2)  Includes stock options for 141,300 shares that are vested or that will vest
     within sixty days of January 31, 2002.
(3)  Includes  2,601,008 shares held with shared dispositive and voting power by
     Summit Venture IV, L.P.  ("Summit IV"), Summit Investors III, L.P. ("Summit
     Investors III"), L.P., Stamps,  Woodsum & Co. IV and Messrs. E, Roe Stamps,
     IV, Stephen G. Woodsum, Gregory M. Avis, Martin J. Mannion, Bruce R. Evans,
     Thomas S. Roberts,  Walter G. Kortschak,  Joseph F. Trustey, Kevin P. Mohan
     and Peter Y. Chung. Summit Partners IV, L.P. is the sole general partner of
     Summit IV. L.P.  Stamps,  Woodsum & Co. IV is the sole  general  partner of
     Summit Partners IV, L.P. Messrs.  Stamps,  Woodsum,  Avis, Mannion,  Evans,
     Roberts,  Kortschak,  Trustey,  Mohan  and  Chung  are  individual  general
     partners of Stamps, Woodsum & Co. IV and Summit Invest Investors III.

Security Ownership Of Management

     The following  table sets forth the  beneficial  ownership of the Company's
Common Stock as of November 30, 2001 (i) by each  director of the Company,  (ii)
by the Company's Named  Executive  Officers during fiscal 2001, and (iii) by all
current directors and executive officers as a group. Shares of Common Stock that
a person has the right to acquire  within  sixty  days of January  31,  2002 are
deemed  outstanding  for purposes of computing the  percentage  ownership of the
person  holding  such  rights,  but are not deemed  outstanding  for purposes of
computing the percentage  ownership of any other person,  except with respect to
the percentage ownership of all directors and executive officers as a group.

<TABLE>
<CAPTION>
                                                                             Beneficial Ownership
                                                                        -------------------------------
Name                                                                     Number of Shares      Percent
----                                                                     ----------------      -------
<S>                                                                          <C>                <C>
Conrad J. Dell'Oca(1) ...............................................        2,766,604           7.14%
Michael J. Carroll(2) ...............................................          841,875           2.14%
John R. Walsh(3) ....................................................          544,971           1.42%
Christopher S. Williams(4) ..........................................          223,531              *
Douglas E. Klint(5) .................................................          184,271              *
Ronald K. Bell(6) ...................................................           16,250              *
Al Wilson(7) ........................................................            6,250              *
Tom Recine ..........................................................            1,000              *
All directors and executive officers as a group (8 persons) .........        4,584,752          11.44%
</TABLE>

------------
* Less than 1%

(1)  Includes stock options for 141,300 shares that are vested or that will vest
     within sixty days of January 31, 2002.
(2)  Includes stock options for 771,875 shares that are vested or that will vest
     within sixty days of January 31, 2002.
(3)  Includes stock options for 129,292 shares that are vested or that will vest
     within sixty days of January 31, 2002.
(4)  Includes stock options for 197,931 shares that are vested or that will vest
     within sixty days of January 31, 2002.
(5)  Includes stock options for 184,271 shares that are vested or that will vest
     within sixty days of January 31, 2002.
(6)  Includes  stock options for 16,250 shares that are vested or that will vest
     within sixty days of January 31, 2002.
(7)  Includes  stock  options for 6,250 shares that are vested or that will vest
     within sixty days of January 31, 2002.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None.


                                       50
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) List of documents filed as part of this Report.

1. FINANCIAL STATEMENTS

     The following consolidated financial statements of Ingenuus Corporation are
contained in Part II, Item 8 of this Report on Form 10-K:

     Report of Independent Accountants
     Consolidated Balance Sheets
     Consolidated Statements of Operations
     Consolidated Statements of Stockholders' Equity
     Consolidated Statements of Cash Flows
     Notes to Consolidated Financial Statements

2. FINANCIAL STATEMENT SCHEDULE

     Schedule II--Valuation and Qualifying Accounts and Reserves

     *    Allowance for Doubtful Accounts

     *    Valuation Allowance for Deferred Tax Assets

     All  other  schedules  for  which  provision  is  made  in  the  Applicable
Accounting Regulation of the Securities and Exchange Commission are not required
under the related  instructions  or are  inapplicable,  and therefore  have been
omitted.


                                       51
<PAGE>

           SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

<TABLE>
<CAPTION>
                                     Balance      Additions
                                        At        Charged to
                                    Beginning     Costs and                     Balance At
Description                         of Period      Expenses     Deductions     End of Period
--------------------------------   -----------   -----------   ------------   --------------
<S>                                  <C>           <C>             <C>            <C>
Allowance for Doubtful Accounts
 November 30, 1999 .............     $ 1,271           817         (859)          $ 1,229
 November 30, 2000 .............     $ 1,229          (563)        (130)          $   536
 November 30, 2001 .............     $   536             0         (320)          $   216

Valuation Allowance for Deferred
 Tax Assets
 November 30, 1999 .............     $ 2,601         7,328           --           $ 9,929
 November 30, 2000 .............     $ 9,929         6,448           --           $16,377
 November 30, 2001 .............     $16,377      $ (3,395)          --           $12,982
</TABLE>

3. REPORTS ON FORM 8-K

     On March 5, 2001, the Registrant  filed a report on Form 8-K announcing the
resignation   of   PricewaterhouseCoopers   as  the   Registrant's   independent
accountants.

     On March 16, 2001, the Registrant filed a report on Form 8-K announcing the
engagement of Moss Adams LLP as its independent accountant.

EXHIBITS

<TABLE>
<CAPTION>
    Exhibit
     Number                        Description of Document
     ------                        -----------------------
<S>                   <C>
    3.1(1)            Restated Certificate of Incorporation of Registrant.

    3.3(1)            Bylaws of Registrant.

    4.2(1)            Form of Common Stock Certificate.

   10.1(1)            Form of Indemnification Agreement.

   10.2(3)            1996 Stock Plan, as amended, and Form of Stock Option Agreement.

   10.3(1)(3)         1997 Employee Stock Purchase Plan, as amended, and form of Subscription Agreement.

   10.4(1)(3)         1997 Director Stock Option Plan and form of Director Option Agreement.

   10.5(2)            Agreement and Plan of Reorganization dated as of July 29, 1999 among the Registrant,
                      Merger Sub, Verilux Design Corporation and certain shareholders of Verilux Design.

   10.6(2)            Agreement and Plan of Reorganization dated as of July 30, 1999 among the Registrant,
                      Merger Sub, Chip & Chip, Inc., and certain shareholders of Chip & Chip, Inc.

   10.7(2)            Agreement and Plan of Reorganization dated as of October 20, 1999 among the
                      Registrant, Merger Sub, Novo Systems Corporation, and certain shareholders of Novo
                      Systems Corporation.

   10.8(3)            2000 Stock Plan, as amended, and Form of Stock Option Agreement.

   21.1(2)            Subsidiaries of the Registrant.

   23.1               Consent of Independent Accountants.

   23.2               Consent of Independent Accountants.

   24.1               Power of Attorney (see page 53).
</TABLE>

------------
(1)  Incorporated   by  reference  to  an  exhibit   filed  with  the  Company's
     Registration  Statement  on Form S-1  (File  No.  333-22913)  which  became
     effective with the Securities and Exchange Commission on April 27, 1998.
(2)  Incorporated  by reference to an exhibit filed with the Company's Form 10-K
     filed with the Securities and Exchange Commission for fiscal year 1999.
(3)  Incorporated  by reference to an exhibit filed with the Company's Form 10-K
     filed with the Securities and Exchange commission for fiscal year 2000.


                                       52
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K to
be signed on its behalf by the  undersigned,  thereunto  duly  authorized in the
City of Santa Clara, State of California, on the 28th day of February, 2002.

                                        INGENUUS CORPORATION


                                        By:        /s/ DOUGLAS E. KLINT
                                           -------------------------------------
                                                     Douglas E. Klint
                                              Vice President, Secretary, and
                                                     General Counsel

                                POWER OF ATTORNEY

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below hereby  constitutes and appoints  Douglas Klint,  and each of them
acting  individually,  as his or her  attorney-in-fact,  each with full power of
substitution,  for  him or her in any and all  capacities,  to sign  any and all
amendments  to this  Report on Form 10-K,  and to file the same,  with  exhibits
thereto and other  documents in connection  therewith,  with the  Securities and
Exchange Commission,  hereby ratifying and confirming our signatures as they may
be signed by our said attorney to any and all amendments to said Report.

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Annual  Report on Form 10-K has been signed  below on  February  28, 2002 by the
following persons on behalf of the Registrant and in the capacities indicated.

          Signature                                    Title
          ---------                                    -----

   /s/ MICHAEL J. CARROLL     President and Chief Executive Officer and Director
---------------------------     (Principal Executive Officer)
   (Michael J. Carroll)

   /s/ DOUGLAS E. KLINT       Vice President, Secretary, and General Counsel
---------------------------
    (Douglas E. Klint)

      /s/ RANDY SINGH         Corporate Controller and Chief Financial Officer
---------------------------
       (Randy Singh)

     /s/ RONALD K. BELL       Director
---------------------------
     (Ronald K. Bell)

  /s/ CONRAD J. DELL'OCA      Director
---------------------------
   (Conrad J. Dell'Oca)

      /s/ TOM RECINE          Director
---------------------------
      (Tom Recine)

       /s/ AL WILSON          Director
---------------------------
       (Al Wilson)


                                       53
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
      Exhibit
       Number                     Description of Document
       ------                     -----------------------

<S>                   <C>
    3.1(1)            Restated Certificate of Incorporation of Registrant.

    3.3(1)            Bylaws of Registrant.

    4.2(1)            Form of Common Stock Certificate.

   10.1(1)            Form of Indemnification Agreement.

   10.2(3)            1996 Stock Plan, as amended, and Form of Stock Option Agreement.

   10.3(1)(3)         1997 Employee Stock Purchase Plan, as amended, and form of Subscription Agreement.

   10.4(1)(3)         1997 Director Stock Option Plan and form of Director Option Agreement.

   10.5(2)            Agreement and Plan of Reorganization dated as of July 29, 1999 among the Registrant,
                      Merger Sub, Verilux Design Corporation and certain shareholders of Verilux Design.

   10.6(2)            Agreement and Plan of Reorganization dated as of July 30, 1999 among the Registrant,
                      Merger Sub, Chip & Chip, Inc., and certain shareholders of Chip & Chip, Inc.

   10.7(2)            Agreement and Plan of Reorganization dated as of October 20, 1999 among the
                      Registrant, Merger Sub, Novo Systems Corporation, and certain shareholders of Novo
                      Systems Corporation.

   10.8(3)            2000 Stock Plan, as amended, and Form of Stock Option Agreement.

   21.1(2)            Subsidiaries of the Registrant.

   23.1               Consent of Independent Accountants.

   23.2               Consent of Independent Accountants.

   24.1               Power of Attorney (see page 53).
</TABLE>

------------
(1)  Incorporated  by  reference to an exhibit of the same number filed with the
     Company's  Registration  Statement on Form S-1 (File No.  333-22913)  which
     became  effective with the Securities and Exchange  Commission on April 27,
     1998.
(2)  Incorporated  by  reference  to an  exhibit  of the  same  number  with the
     Company's Form 10-K filed with the  Securities and Exchange  Commission for
     fiscal year 1999.
(3)  Incorporated  by reference to an exhibit filed with the Company's Form 10-K
     filed with the Securities and Exchange commission for fiscal year 2000.


                                       54