KFI Disclosure Schedule
to
Agreement and Plan of Merger
dated August 7, 2000
by and between
Calipso, Inc.
and
Knowledge Foundations, Inc.
*Capitalized terms used herein not otherwise defined herein shall have the
meanings given to them in the Agreement and Plan of Merger.
<PAGE>
Schedule 3.2(b)
Issued Capital Stock
No shares of KFI's capital stock have been issued since June 30, 2000. KFI
has been in negotiations with a consultant over consideration to be received
by him as a finder's fee for introducing KFI to an investor or investors who
invest $3,000,000 in equity financing.
<PAGE>
Schedule 3.2(c)
Convertible Securities
8% Convertible Subordinate Promissory Note Due 2003.
See disclosure regarding consultant in Schedule 3.2(b), which disclosure is
incorporated herein by reference.
<PAGE>
Schedule 3.2(e)
Ownership of Other Entities
None
<PAGE>
Schedule 3.5
Consents and Approvals
From Governmental Entities
Tax Clearance Certificate from the California Tax Franchise Board.
<PAGE>
Schedule 3.6
Default
None
<PAGE>
Schedule 3.7
Liabilities; Change
See disclosure regarding consultant on Schedule 3.2(b), which disclosure is
incorporated herein by reference.
<PAGE>
Schedule 3.8
Litigation
See disclosure regarding consultant on Schedule 3.2(b), which disclosure is
incorporated herein by reference.
<PAGE>
Schedule 3.9
Compliance with Applicable Law
KFI holds all the KFI Permits necessary for the lawful conduct of its
business, except where the failure to hold the KFI Permits would not have a
Material Adverse Effect on KFI.
<PAGE>
Schedule 3.10(c)
Stock Option Holders
None
<PAGE>
Schedule 3.10(e)
Employee Benefit Plans:
Payment, Accrual of Additional Benefits,
Acceleration of Payments, Vesting
Michael W. Dochterman and Robert A. Dietrich have change-in-control
provisions in their Stock Purchase Agreements.
<PAGE>
Schedule 3.10(f)
Controversies Pending or Threatened
See disclosure regarding consultant on Schedule 3.2(b), which disclosure is
incorporated herein by reference.
<PAGE>
Schedule 3.11(a)
Compliance with Environmental Laws
KFI is in material compliance with all Environmental Laws except where non-
compliance would not have a Material Adverse Effect on KFI.
<PAGE>
Schedule 3.11(b)
Environmental Claims
None
<PAGE>
Schedule 3.12
Tax Matters
None
<PAGE>
Schedule 3.13
Title to Property
Encumbrance - In accordance with the 8% Convertible Subordinate Promissory
Note Due 2003 (the "Note"), KFI promised to pay to Regency Group Limited,
Inc. ("Regency") or the holder of the Note, or Regency's registered assigns,
the principal sum of Three Hundred Thousand Dollars ($300,000.00), at
maturity, with interest (computed on the basis of a 360-day year of twelve 30-
day months) on the unpaid principal amount at the rate of 8% per annum.
KFI has entered into a License and Royalty Agreement with Richard Ballard and
Janet Pettitt, a copy of which has been provided to CALIPSO.
KFI has entered into a Real Property Lease Agreement with Richard Ballard, a
copy of which has been provided to CALIPSO.
<PAGE>
Schedule 3.14(b)
Title to Intellectual Property
The validity of the KFI Intellectual Property Rights and the title thereto of
KFI is not being questioned in any litigation to which KFI is a party.
KFI, Dr. Richard Ballard and Janet Pettitt are parties to that certain
License and Royalty Agreement pursuant to which the KFI has acquired an
exclusive, transferable license on the terms and conditions set forth
therein. A copy of the License and Royalty Agreement has been provided to
Calipso.
<PAGE>
Schedule 3.18
Affiliates
Richard Ballard, Ph.D.
Michael W. Dochterman
Robert A. Dietrich
Janet J. Pettitt
Joel Vest
<PAGE>
Schedule 3.20
Insider Interest
KFI has entered into a License and Royalty Agreement with two of its
Directors and Executive Officers, Richard Ballard, and Janet Pettitt.
Richard Ballard and Janet Pettitt are married.
KFI has also entered into a Real Property Lease Agreement with Richard
Ballard.
<PAGE>
Schedule 3.21
Brokers
Please refer to the disclosure regarding consultant on Schedule 3.2(c).
Pursuant to the Wright & Bleers Agreement referred to in Section 2.22,
Calipso will issue to Wright & Bleers Two Million (2,000,000) common
restricted shares on certain conditions.
<PAGE>
Schedule 3.24(c)
Material Contracts
See disclosure regarding consultant on Schedule 3.2(b), which disclosure is
incorporated herein by reference
<PAGE>
Schedule 4.2
Conduct of Business
During the period from the date of the Agreement to the Effective Time, KFI
will conduct its operations in the ordinary course of business consistent
with past practice.
<PAGE>
