FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of
1934
For the period ended November 30, 2002
[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
RTICA CORPORATION Interim Financial statements Period ended November 30, 2002 UNAUDITED |
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
November 30, 2002 and May 31, 2002
(Unaudited)
| November 30 | May 31 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and short-term investments | $ | 1,350,450 | $ | 4,152 | ||
| GST and other receivables | 39,780 | 27,941 | ||||
| Prepaid expenses | 10,575 | 10,685 | ||||
| 1,400,805 | 42,778 | |||||
| Fixed assets (note 2) | 290,387 | 334,536 | ||||
| Deferred development costs | 1 | 1 | ||||
| Goodwill, net of accumulated amortization | 1 | 1 | ||||
| $ | 1,691,194 | $ | 377,316 | |||
| Liabilities and Shareholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ | 899,027 | $ | 912,077 | ||
| Promissory notes | 271,894 | 355,280 | ||||
| 1,170,921 | 1,267,357 | |||||
| Due to government (note 5) | 445,000 | 445,000 | ||||
| Convertible debentures (note 4) | 2,038,262 | 73,264 | ||||
| Shareholders' equity: | ||||||
| Share capital (note 3) | 9,286,768 | 8,986,768 | ||||
| Equity component of convertible debenture | 514,738 | 12,736 | ||||
| Deficit | (11,764,495 | ) | (10,407,809 | ) | ||
| (1,962,989 | ) | (1,408,305 | ) | |||
| $ | 1,691,194 | $ | 377,316 | |||
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations and Deficit
Three month periods ended November 30, 2002 and 2001
(Unaudited)
| 2002 | 2001 | |||||
| Income: | ||||||
| Interest | $ | - | $ | 30,787 | ||
| Operating expenses: | ||||||
| Development | 86,139 | 230,121 | ||||
| Sales and marketing | 59,768 | 65,310 | ||||
| Consulting | 117,533 | 61,408 | ||||
| Professional fees (note 8) | 332,942 | 47,650 | ||||
| General and administrative | 24,637 | 45,141 | ||||
| Rent and property taxes | 22,065 | 41,648 | ||||
| Management fees | 40,500 | 36,000 | ||||
| Amortization of fixed assets | 23,462 | 32,788 | ||||
| Factory overhead | 8,741 | 17,078 | ||||
| Travel | 2,816 | 8,139 | ||||
| Amortization of goodwill | - | 6,591 | ||||
| Interest and bank charges | 1,154 | 461 | ||||
| Interest on convertible debenture | 59,512 | - | ||||
| Patents | 12,681 | 938 | ||||
| 791,950 | 593,273 | |||||
| Loss for the period | (791,950 | ) | (562,486 | ) | ||
| Deficit accumulated during development | ||||||
| stage, beginning of period | (10,972,545 | ) | (8,164,555 | ) | ||
| Deficit accumulated during development | ||||||
| stage, end of period | $ | (11,764,495 | ) | $ | (8,727,041 | ) |
| Loss per share | $ | (0.03 | ) | $ | (0.02 | ) |
| Weighted average number of common shares | ||||||
| outstanding, excluding shares held in escrow (note 3) | 26,154,030 | 24,753,697 | ||||
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
Three month periods ended November 30, 2002 and 2001
(Unaudited)
| 2002 | 2001 | |||||
| Cash provided by (used in): | ||||||
| Operating activities: | ||||||
| Loss for the period | $ | (791,950 | ) | $ | (562,486 | ) |
| Items not involving cash: | ||||||
| Interest on convertible debenture | 27,618 | - | ||||
| Amortization of fixed assets | 23,462 | 32,788 | ||||
| Amortization of goodwill | - | 6,591 | ||||
| Change in non-cash operating | ||||||
| working capital: | ||||||
| GST and other receivables | (403 | ) | (19,175 | ) | ||
| Prepaid expenses | 110 | - | ||||
| Accounts payable and accrued liabilities | (253,995 | ) | 117,252 | |||
| (995,158 | ) | (425,030 | ) | |||
| Financing activities: | ||||||
| Issuance of convertible debentures | 2,221,000 | - | ||||
| Issuance of common shares | 300,000 | - | ||||
| Proceeds from promissory notes | (183,386 | ) | - | |||
| 2,337,614 | - | |||||
| Investing activities: | ||||||
| Purchase of fixed assets | (637 | ) | - | |||
| (637 | ) | - | ||||
| Change in cash and cash equivalents | 1,341,819 | (425,030 | ) | |||
| Cash and cash equivalents, start of period | 8,631 | 697,494 | ||||
| Cash and cash equivalents, end of period | $ | 1,350,450 | $ | 272,464 | ||
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations and Deficit
Six month periods ended November 30, 2002 and 2001, and cumulative from inception
(Unaudited)
| Cumulative | |||||||||
| Period from | |||||||||
| June 13, 1991 | |||||||||
| (inception) to | |||||||||
| November 30, | |||||||||
| 2002 | 2001 | 2002 | |||||||
| Income: | |||||||||
| Interest | $ | 29 | $ | 37,269 | 205,837 | ||||
| Fees and licenses | - | - | 622,482 | ||||||
| 29 | 37,269 | 828,319 | |||||||
| Operating expenses: | |||||||||
| Development | 300,093 | 674,900 | 4,219,031 | ||||||
| Consulting | 153,936 | 168,137 | 2,271,256 | ||||||
| Sales and marketing | 122,118 | 124,338 | 1,264,668 | ||||||
| Management fees | 81,000 | 78,000 | 1,100,386 | ||||||
| Professional fees (note 8) | 374,433 | 123,914 | 1,031,007 | ||||||
| General and administrative | 69,760 | 76,469 | 871,447 | ||||||
| Travel | 15,142 | 20,682 | 425,056 | ||||||
| Rent and property taxes | 59,655 | 76,510 | 390,723 | ||||||
| Amortization of fixed assets | 44,786 | 65,576 | 332,709 | ||||||
| Interest on convertible debenture | 80,662 | - | 222,496 | ||||||
| Interest and bank charges | 1,825 | 1,014 | 148,929 | ||||||
| Factory overhead | 15,211 | 35,214 | 123,789 | ||||||
| Amortization of goodwill | - | 13,182 | 108,937 | ||||||
| Patents | 38,094 | 938 | 82,380 | ||||||
| 1,356,715 | 1,458,874 | 12,592,814 | |||||||
| Loss for the period | (1,356,686 | ) | (1,421,605 | ) | (11,764,495 | ) | |||
| Deficit accumulated during development | |||||||||
| stage, beginning of period | (10,407,809 | ) | (7,305,436 | ) | - | ||||
| Deficit accumulated during development | |||||||||
| stage, end of period | $ | (11,764,495 | ) | $ | (8,727,041 | ) | $ | (11,764,495 | ) |
| Loss per share | $ | (0.05 | ) | $ | (0.06 | ) | $ | - | |
| Weighted average number of common shares | |||||||||
| outstanding, excluding shares held | |||||||||
| In escrow shares (note 3) | 25,985,081 | 24,753,697 | - | ||||||
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
Six month periods ended November 30, 2002and 2001, and cumulative from inception
(Unaudited)
| Cumulative | |||||||||
| period from | |||||||||
| June 13, 1991 | |||||||||
| (inception) to | |||||||||
| 2002 | 2001 | November 30, | |||||||
| 2002 | |||||||||
| Cash provided by (used in): | |||||||||
| Operating activities: | |||||||||
| Loss for the period | $ | (1,356,686 | ) | $ | (1,421,605 | ) | $ | (11,764,495 | ) |
| Items not involving cash: | |||||||||
| Interest on convertible debenture | 27,618 | - | 143,588 | ||||||
| Amortization of fixed assets | 44,786 | 78,758 | 441,646 | ||||||
| Interest expense on converted loan | - | - | 96,000 | ||||||
| Expenses settled by issuance | |||||||||
| of common shares | - | - | 464,988 | ||||||
| Foreign exchange gain | - | 1,250 | (25,603 | ) | |||||
| Change in non-cash operating | |||||||||
| working capital: | |||||||||
| GST and other receivables | (11,839 | ) | 24,302 | (39,780 | ) | ||||
| Prepaid expenses | 110 | - | (10,575 | ) | |||||
| Accounts payable and accrued liabilities | (40,668 | ) | 161,290 | 790,067 | |||||
| (1,336,679 | ) | (1,156,005 | ) | (9,904,164 | ) | ||||
| Financing activities: | |||||||||
| Due to government | - | 41,055 | 445,000 | ||||||
| Issuance of convertible debentures | 2,467,000 | - | 4,413,000 | ||||||
| Issuance of common shares | 300,000 | - | 2,782,167 | ||||||
| Proceeds from promissory notes | (83,386 | ) | - | 525,891 | |||||
| Issuance of special warrants | - | - | 2,870,659 | ||||||
| Exercise of share purchase warrants | - | - | 553,541 | ||||||
| 2,683,614 | 41,055 | 11,590,258 | |||||||
| Investing activities: | |||||||||
| Purchase of fixed assets | (637 | ) | (5,387 | ) | (623,096 | ) | |||
| Deferred development costs | - | - | (1 | ) | |||||
| Cash acquired on reverse takeover | - | - | 261,850 | ||||||
| (637 | ) | (5,387 | ) | (361,247 | ) | ||||
| Foreign exchange gains held on foreign currency | - | (1,250 | ) | 25,603 | |||||
| Change in cash and cash equivalents | 1,346,298 | (1,121,587 | ) | 1,350,450 | |||||
| Cash and cash equivalents, start of period | 4,152 | 1,394,051 | - | ||||||
| Cash and cash equivalents, end of period | $ | 1,350,450 | $ | 272,464 | $ | 1,350,450 | |||
See accompanying notes to interim financial statements.
| RTICA CORPORATION |
| (FORMERLY INZECO HOLDINGS INC.) |
| (A DEVELOPMENT STAGE COMPANY) |
| Notes to Interim Consolidated Financial Statements |
| Six month period ended November 30, 2002 |
| (Unaudited) |
| 1 | Significant accounting policies: These interim financial statements have been prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”), and include estimates and adjustments which in the opinion of management are necessary in order to make the financial statements not misleading. Canadian GAAP differs in certain respects with those principles and practices that the Company would have followed had its financial statements been prepared in accordance with accounting principles and practices generally accepted in the United States. For a full description of accounting polices which have been applied on a consistent basis in these interim financial statements, refer to the Company's annual financial statements. |
| 2. | Fixed Assets: |
| Accumulated | Net Book | Net Book | |||||||||||
| Cost | Amortization | Value | Value | ||||||||||
| November 2002 | May 2002 | ||||||||||||
| Machinery and equipment | $ | 531,469 | $ | 275,285 | $ | 256,184 | $ | 295,243 | |||||
| Furniture | 11,910 | 6,154 | 5,756 | 6,139 | |||||||||
| Vehicles | 15,848 | 9,675 | 6,173 | 7,214 | |||||||||
| Computer hardware | 63,868 | 41,594 | 22,274 | 25,940 | |||||||||
| $ | 623,095 | $ | 332,708 | $ | 290,387 | $ | 334,536 | ||||||
| 3. | Share capital: During the period, the Company completed a private placement of 1,000,000 units at $0.30 per unit. Each unit consists of one common share and one warrant entitling the holder to purchase one-half of a common share at $0.40 per share for a period of 24 months from the date of issuance. As of November 30, 2002, the Company had 36,119,636 common shares and 2,373,250 Company stock options outstanding. In addition, in conjunction with the private placement for share capital and convertible debentures undertaken in November 2002, the company issued 453,333 broker compensation options outstanding exercisable at $0.345 per share and expiring in 18 months, and 120,000 broker options exercisable at $0.40 and expiring in 24 months. |
| RTICA CORPORATION |
| (FORMERLY INZECO HOLDINGS INC.) |
| (A DEVELOPMENT STAGE COMPANY) |
| Notes to Interim Consolidated Financial Statements (Cont’d) |
| Six month period ended November 30, 2002 |
| (Unaudited) |
| 4. | Share capital (continued): Using the treasury stock method, the weighted average number of common shares outstanding used in determining basic earnings per share excludes 9,298,939 of escrowed shares (2001: 9,298,939) |
| 5. | Convertible debenture: During the period, the Company’s wholly owned subsidiary, RTICA Inc., issued $2.2 million in 12% convertible debentures due in 2007. These debentures are subject to a general security agreement and are convertible at the option of the holder at any time and subject to certain conditions into units consisting of one voting preference share and one warrant to purchase one additional preference share at $0.30 per unit. Each warrant entitles the holder to purchase one additional preference share at $0.40 per share. The debentures are subject to a number of other conditions including, for example, reduction of interest on the occurrence of certain events and take over protection provisions. The preference shares are also accompanied by a right to exchange them on a one-for-one basis with common shares of the Company. The investors have the conditional right at their option to invest up to $1,000,000 under similar terms and conditions except that the conversion rate shall be $0.23 per share. During the six month period ended November 30, 2002, RTICA Corporation raised $267,000 from the issuance of convertible debentures bearing interest at 10% annually, with interest calculated semi-annually in arrears at June 30 and December 31. Including amounts raised in the previous fiscal period, a total of $353,000 has been raised from these debentures. The holders have the right to convert the debenture into that number of units as is obtained by dividing the amount due (excluding interest) by $0.45. Each unit consists of one common share and one common share purchase warrant, which entitle the holder to purchase on common share for $0.54 per share for two years. After May 31, 2003 but prior to May 31, 2005, the Company may redeem the debentures for the principal amount, or issue such common shares by dividing the principal amount and interest accrued by an amount equal to the current market price of the Company's shares, provided such price exceeds $0.70 for one continuous calendar month from the date of the convertible debenture. As security for the payment and performance of obligations, the Company grants to the holders a security interest in the present and future undertaking and property of the Company, including but not limited to receivables, inventory, equipment, chattel paper, documents of title, intangibles, securities and instruments, books and records. |
| RTICA CORPORATION |
| (FORMERLY INZECO HOLDINGS INC.) |
| (A DEVELOPMENT STAGE COMPANY) |
| Notes to Interim Consolidated Financial Statements (Cont’d) |
| Six month period ended November 30, 2002 |
| (Unaudited) |
| 6. | Due to government: The company has signed a contract with the National Research Council of Canada, whereby the Company is eligible to receive up to $445,000 as a repayable contribution for various projects carried out by the Company. Repayment of these contributions begins on January 1, 2004 based on 1% of the Company’s gross revenue up to a maximum of $667,500. |
| 7. | Related party transactions: Amounts expended during the six month period ended November 30, 2002 were as follows: |
| Type of service | Nature of relationship | November 30, 2002 | ||
| Management fees | Shareholder, director and officer | $ 81,000 | ||
| Legal fees | Shareholder, director and officer | 108,440 | ||
| 8. | Professional Fees: In connection with the private placement and convertible debenture financing transactions completed during the period, the Company incurred broker commissions of $79,500 and was required to reimburse third party legal fees in the amount of $108,000. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RTICA Corporation | ||
| (Registrant) | ||
| Date February 11, 2003 | By: | /s/ Warren Arseneau |
| *Warren Arseneau, | ||
| President |
* Print the name and title of the signing officer under his signature.
