From quickly skimming the filings, looks like they're liquidating everything to another company, and hoping to win a lawsuit against another company for 34.6 million, although the outcome is uncertain -- stated in the PR they would distribute the proceeds to shareholders...looks like the current bid/ask is reflecting some interest in the company. Any thoughts?

Press release:

2004-12-17 06:00:36
Cygnus and Animas Corporation Enter Into $10 Million Asset Purchase Agreement

REDWOOD CITY, Calif., Dec. 17 /PRNewswire-FirstCall/ -- Cygnus, Inc.
(OTC Bulletin Board: CYGN) announced today that it had entered into an Asset
Purchase Agreement with Animas Corporation (Nasdaq: PUMP) pursuant to which
Animas will acquire certain assets of Cygnus (the "Acquisition") for a
purchase price of $10 million in cash. The assets to be sold by Cygnus to
Animas include substantially all of Cygnus' intellectual property rights,
fixed assets, supplier, manufacturing and license agreements, inventory and
tangible personal property.
Assets excluded from the Acquisition include Cygnus' cash and cash
equivalents, accounts receivable and its arbitration claim against
Ortho-McNeil Pharmaceutical, Inc., a Johnson & Johnson company.
The Asset Purchase Agreement was unanimously approved by the Cygnus Board
of Directors. Cygnus currently expects the Acquisition to close in the first
quarter of 2005, subject to certain conditions. First Albany Capital Inc.
served as the Company's exclusive financial advisor for this transaction.
Cygnus will submit for a stockholder vote two proposals: to approve the
Acquisition and to approve a plan of dissolution. Cygnus will be filing a
proxy statement and other relevant documents concerning the transaction with
the Securities and Exchange Commission (SEC). The Acquisition and the
liquidation proposals are not conditioned upon one another.
If the Acquisition and plan of dissolution are approved by stockholders
and the Acquisition closes, Cygnus will complete the liquidation of its
remaining assets and satisfy its remaining obligations. Upon the closing of
the Acquisition, Cygnus would settle its obligations with Sanofi Aventis and
the lien on Cygnus' assets would be released. Cygnus would use its remaining
cash to fund its further scaled-back operating expenses and the expenses of
prosecuting the arbitration claim against Ortho-McNeil Pharmaceutical, Inc.
As previously disclosed, Cygnus is seeking $34.6 million in damages in this
arbitration. The outcome of the arbitration matter is inherently uncertain.
There is risk inherent in all litigation. Accordingly, it is impossible to
predict whether Cygnus will prevail in the arbitration matter, or to determine
the amount of money, if any, Cygnus will recover. Upon the resolution of the
arbitration, Cygnus would make a distribution to stockholders of any remaining
liquidation proceeds.
If the Acquisition is not completed, whether due to the failure of
stockholders to approve the transaction or any other reason, Cygnus would
likely file for, or be forced to resort to, bankruptcy protection and it is
unlikely that there would be funds available for a distribution to
stockholders.
In a separate transaction, Cygnus signed a lease termination agreement
with its Redwood City facility landlord whereby Cygnus paid a termination
fee of $500,000, forfeited its security deposit of approximately $77,600 and
will leave certain trade fixtures and personal property in the facility when
the Company vacates on or before March 31, 2005. The early termination
relieves the Company of its contractual obligations of approximately $3.7
million for the remaining lease term through April 30, 2009.
Stockholders of Cygnus are urged to read the proxy statement and any other
relevant documents filed with the SEC when they become available because they
will contain important information. Investors and security holders can obtain
free copies of the proxy statement and other relevant documents when they
become available by contacting Cygnus, Inc., 400 Penobscot Drive, Redwood
City, CA 94063-4719. In addition, documents filed with the SEC by Cygnus will
be available free of charge at the SEC's web site at www.sec.gov.
Information regarding the identity of the persons who may, under SEC
rules, be deemed to be participants in the solicitation of stockholders of
Cygnus in connection with the transaction, and their direct and indirect
interest, by security holding or otherwise, in the solicitation, will be set
forth in a proxy statement that will be filed by Cygnus with the SEC.
The GlucoWatch G2(R) Biographer and AutoSensors will remain available for
purchase until the completion of the Acquisition. To purchase these products,
call 1-866-GLWATCH (1-866-459-2824). After completion of the Acquisition, then
future availability of GlucoWatch G2(R) Biographer products will be determined
by Animas.
ABOUT CYGNUS
Cygnus (www.cygn.com and www.glucowatch.com) has developed, manufactured
and commercialized new and improved glucose-monitoring devices. Cygnus'
products are designed to provide more data to individuals and their physicians
and enable them to make better-informed decisions on how to manage diabetes.
The three generations of Cygnus' GlucoWatch Biographers are the only products
approved by the FDA that provide frequent, automatic and non-invasive
measurement of glucose levels. Cygnus believes its products represent the most
significant commercialized technological advancement in self-monitoring of
glucose levels since the advent of "finger-stick" blood glucose measurement
approximately 20 years ago. The Biographer is not intended to replace the
common "finger-stick" or alternative site testing methods, but is indicated as
an adjunctive device to supplement blood glucose testing to provide more
complete, ongoing information about glucose levels.
Some of the statements in this news release are forward-looking statements
that involve risks and uncertainties. These forward-looking statements include
statements about Cygnus' plans, objectives, expectations, intentions and
assumptions and other statements contained in this news release that are not
statements of historical fact. Forward-looking statements include, but are not
limited to statements about the consummation of the Acquisition including
obtaining stockholder approval, the outcome of the Ortho-McNeil Pharmaceutical
arbitration, the ability to satisfy Cygnus' obligations without resorting to
protection under bankruptcy laws, the timing and amounts of distribution of
liquidation proceeds to stockholders, the capabilities and potential of the
GlucoWatch G2 Biographer business, Cygnus' ability to achieve market
acceptance of the GlucoWatch G2 Biographer, Cygnus' ability to manufacture the
GlucoWatch G2 Biographer, and Cygnus' plans for other commercialization
alliances. In some cases, you can identify these statements by words such as
"may," "will," "should," "estimates," "predicts," "potential," "continues,"
"strategy," "believes," "anticipates," "plans," "expects," "intends" and
similar expressions. Cygnus cannot guarantee future results, levels of
activity, performance or achievements. Cygnus' actual results and the timing
of certain events may differ significantly from the results and timing
discussed in this news release. With respect to the sale of assets and
liquidation, many of the risks and uncertainties involved are beyond Cygnus'
control. These risks and uncertainties include, but are not limited to, the
ability to obtain stockholder approval of the transactions and to satisfy the
other closing conditions to the Acquisition, the risk that Cygnus incurs
additional liabilities that Cygnus does not now anticipate, that Cygnus'
expenses, including the expenses in prosecuting the arbitration matter, may be
higher than expected whether due to length of time involved or otherwise, that
the settlement of Cygnus' liabilities could be higher than expected, and,
since litigation is inherently uncertain, the possibility that Cygnus receives
no recovery at all in the arbitration matter. All forward-looking statements
included in this news release are based on information available to Cygnus on
the date hereof, and Cygnus assumes no obligation to update any such
forward-looking statements.
NOTE: "GlucoWatch" and "G2" are registered trademarks of Cygnus, Inc.
SOURCE Cygnus, Inc.

Contact Information:
Cygnus Corporate Communications, +1-650-369-4300 (option 2)