Organitech USA (ORGT) 10QSB 2002 Q3 Quarterly report (small business)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-QSB

(Mark One)

[ x ] Quarterly Report under Section 13 or 15(d)

of the Securities Exchange Act of 1934

for the quarterly period endedSeptember 30^th, 2002

[ ] Transition Report under Section 13 or 15(d)

of the Exchange Act

for the transition period from ________________ to ______________

Commission File Number     000-22151     

                   ORGANITECH USA, INC.                

(Exact Name of Small Business Issuer as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation or Organization)

93-0969365

(IRS Employer Identification No.)

                   Technion Science Park, Nesher 36001, Israel                  

(Address of principal executive offices)

     972-4-830-8320     

(Issuer's Telephone Number)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of September 30, 2002, this issuer had 11,000,000 shares of its common stock outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ x ]

ORGANITECH USA, INC.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2002

(UNAUDITED)

Organitech USA, Inc.

(A Development Stage Company)

Condensed Consolidated Interim Financial Statements

As of September 30, 2002

(Unaudited)

Contents
	page
Condensed Consolidated Interim Balance Sheets	4
Condensed Consolidated Interim Statements of Operations	5
Condensed Consolidated Interim Statements of Cash Flows	6-7
Notes to Condensed Consolidated Interim Financial Statements	8-11

Organitech USA, Inc.

(A Development Stage Company)

Condensed Consolidated Interim Balance Sheets

	September 30	September 30		December 31,
	2002	2001		2001
	Unaudited	Unaudited		Audited
	U.S. $	U.S. $		U.S. $
Assets
Current assets :
Cash and cash equivalents	166,689	1,056,927		620,329
Short-term investments	-	22,970		196,551
Other accounts receivable	88,046	64,881		71,165
Prepaid expenses	3,000	54,143		36,852
Raw material inventory	23,334	94,811		11,808
	281,069	1,293,732		936,705
Other assets	16,880	16,880		16,880
Amount funded for liability for employee rights upon retirement	37,811	-		-
Fixed assets, net	130,162	116,804		105,099
	465,922	1,427,416		1,058,684
Liabilities and shareholders' equity
Current liabilities :
Short - term credits	-	9,685		-
Trade accounts payable	26,290	67,237		135,785
Other accounts payable	219,381	105,419		123,323
Deferred income	135,000	135,000		135,000
	380,671	317,341		394,108
Liability for employee rights upon retirement	56,056	15,240		24,780
Contingencies and Commitments (Note 5)
Shareholders' equity
Common shares of U.S.$ 0.001 par value, authorized - 80,000,000 shares, issued and outstanding - 11,000,000 shares	11,100	11,100		11,100
Additional paid in capital	3,398,017	3,398,017		3,398,017
Proceeds for future share issuance (Note 4)	100,000	-		-
Stock based compensation	464,907	403,352		426,329
Accumulated deficit during the development stage	(3,944,829)	(2,717,634)		(3,195,650)
Total shareholders' equity	29,195	1,094,835		639,796
	465,922	1,427,416		1,058,684
The accompanying notes are an integral part of the consolidated interim financial statements.
Chairman of the Board of Directors			President

Organitech USA, Inc.

(A Development Stage Company)

Condensed Consolidated Interim Statements of Operations

	Nine months ended September 30,		Three months ended September 30,		Year ended December 31,	Amounts accumulated during the development stage
	2002	2001	2002	2001	2001
	Unaudited		Unaudited		Audited	Unaudited
	U.S. $		U.S. $		U.S. $	U.S. $
Sales of PhytoChamber	6,033	8,500	-	8500	32,620	39,308
Cost of sales	-	6,444	-	6,444	20,567	20,567
Gross profit	6,033	2,056	-	2,056	12,053	18,741
Research and development expenses, net	331,085	673,527	132,574	107,849	956,252	2,457,907
Selling and marketing expenses	35,875	99,685	18,019	99,685	145,416	181,291
General and administrative expenses	382,695	477,190	77,375	156,680	626,130	1,335,571
Operating loss	743,622	1,248,346	227,968	362,158	1,715,745	3,956,028
Financing expenses (income), net	5,557	(28,036)	(5,759)	(332)	(27,419)	(31,199)
Other expenses, net	-	10,000	-	10,000	20,000	20,000
Loss before income tax	749,179	1,230,310	222,209	371,826	1,708,326	3,944,829
Income tax	-	-	-	-	-	-
Net loss	749,179	1,230,310	222,209	371,826	1,708,326	3,944,829
Basic and diluted net loss
per common share (Note 3)	0.068	0.115	0.020	0.033	0.16
Weighted average number of common shares outstanding used in basic and diluted loss per share calculation	11,000,000	10,700,000	11,000,000	11,100,000	10,757,595

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

Organitech USA, Inc.

(A Development Stage Company)

Condensed Consolidated Interim Statements of Cash Flows

	Nine months ended September 30,		Year ended December 31,	Amounts accumulated during the development stage
	2002	2001	2001
	Unaudited		Audited	Unaudited
	U.S. $	U.S. $	U.S. $	U.S. $
Cash flows used in operating activities:
Net loss for the period	(749,179)	(1,230,310)	(1,708,326)	(3,944,829)
Adjustments to reconcile net loss to net cash used in operating activities :
Depreciation	18,317	16,076	22,137	50,311
Liability for employee rights upon retirement, net of amount founded	(6,535)	(1,871)	7,669	18,245
Compensation from stock options	38,578	88,039	111,016	464,907
Changes in assets and liabilities :
Increase in other accounts receivable	(16,881)	(30,114)	(33,009)	(88,046)
decrease (Increase) in prepaid expenses	33,852	-	13,902	(3,000)
Increase in raw material inventory	(11,526)	(94,811)	(11,808)	(23,334)
(Decrease) Increase in trade accounts payable	(109,495)	(61,221)	(795)	26,290
Increase in other accounts payable	96,058	14,916	41,554	219,381
(Decrease) Increase in deferred income	-	(25,000)	(25,000)	135,000
Total adjustments	42,368	(93,986)	125,666	799,754
Net cash used in operating activities	(706,811)	(1,324,296)	(1,582,660)	(3,145,075)
Cash flows from investing activities :
Decrease (Increase) in short-term investments	196,551	(22,970)	(196,551)	-
Investment in fixed assets	(43,380)	(24,252)	(18,608)	(180,473)
Investment in other assets	-	-	-	(16,880)
Net cash provided by (used in) investing activities	153,171	(47,222)	(215,159)	(197,353)
Cash flows from financing activities :
Increase (decrease) in short-term credit, net	-	9,685	-	-
Proceeds for future share issuance	100,000	-	-	100,000
Proceeds from issuance of shares, net of issuance expenses	-	2,265,514	2,265,514	3,409,117
Net cash provided by financing activities	100,000	2,275,199	2,265,514	3,509,117

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

Organitech USA, Inc.

(A Development Stage Company)

Condensed Consolidated Interim Statements of Cash Flows - Continued

	Nine months ended September 30,		Year ended December 31,	Amounts accumulated during the development stage
	2002	2001	2001
	Unaudited		Audited	Unaudited
	U.S. $	U.S. $	U.S. $	U.S. $
Net cash used in operating activities	(706,811)	(1,324,296)	(1,582,660)	(3,145,075)
Net cash provided by (used in) investing activities	153,171	(47,222)	(215,159)	(197,353)
Net cash provided by financing activities	100,000	2,275,199	2,265,514	3,509,117
Effect of exchange rate changes on cash	-	(8,122)	(8,734)	-
Net (decrease) increase in cash and cash equivalents	(453,640)	895,559	458,961	166,689
Cash and cash equivalents at beginning of period	620,329	161,368	161,368	-
Cash and cash equivalents at end of period	166,689	1,056,927	620,329	166,689
Supplementary disclosure of cash flow information :
Interest received (paid), net	1,632	(80)	(200)
Income tax paid, net	(1,357)	(282)	(1,113)

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

Organitech USA, Inc.

(A Development Stage Company)

Notes to Condensed Unaudited Consolidated Interim Financial Statements

Note 1 -	Description of Business
	A.	Organitech USA, Inc. (the "Company") (formerly "Incubate This!, Inc."), organized under the laws of the state of Delaware, is presently and primarily engaged through its wholly-owned subsidiary, Organitech Ltd. ("Organitech Ltd."), a company organized under the laws of Israel, in the development of technologies, platforms, and applied engineering solutions that cost effectively and completely automate the method by which many foods, plants, and extracts are cultivated. Since its formation, Organitech Ltd. has been developing its first proprietary solution, the GrowTECH 2000 (TM), which is a low input-high output, self-contained, portable, robotic, sustainable agricultural platform designed to automatically seed, transplant and harvest commercial quantities of hydroponics, pesticide free, green leaf vegetables. Another engineering solution developed by Organitech Ltd. is a commercial new highly portable, reliable, cost-effective, and versatile turnkey growth c hamber solution known as PhytoChamber.
		The high technology industry, in which the Company is involved, is competitive and is characterized by the risks of rapidly changing technologies and penetration into world markets. This requires the investment of considerable resources and continuous development efforts. The Company's future success is dependent upon several factors including the technological quality and price/performance of its products relative to those of its competitors. Some of the Company's competitors and potential competitors may have greater research, development, financial or other resources or more extensive business experience than the Company. There can be no assurance that the Company will be able to maintain the high technological quality of its products relative to those of its competitors or to continue to develop or market new products effectively.
	B.	The Company has not generated material revenues from sales of the GrowTECH 2000 platform, and has incurred losses from operations at the amount of U.S$ 749,179, U.S.$ 1,230,310, U.S.$ 1,708,326 and 3,944,829 U.S.$ for the nine-month periods ended September 30, 2002 and 2001, for the year ended December 31, 2001 and for the period from July 4, 1999 (inception) to September 30, 2002, respectively.
		The Company's losses could continue for the next several years as it continues to expand research and development activities, increase its manufacturing, sales and marketing capabilities. The Company does not have sufficient cash to satisfy the operational and developmental requirements over the next 12 months which raise substantial doubt about its ability to continue to operate as a "going concern".
		The continuation of the Company's operation as a "going concern" is dependant upon its ability to invest the required resources in completion of the research and development, the quality of its technologies, future market, selling the GrowTECH 2000 platform and the continued financial support of its shareholders or on obtaining of additional external sources of financing, in order to secure the continuity of its operations. See Note 4 regarding private placement agreement for investment of U.S.$ 2 million in the Company's equity.
Note 2 -	Basis of Presentation
	A.	The accompanying unaudited interim consolidated financial statements as of September 30, 2002 and for the nine month period then ended ("the Interim Financial Statements") were prepared in a condensed form in accordance with the instructions for Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of financial condition, results of operations, cash flows and all the data and notes which are required when preparing annual financial statements, in conformity with generally accepted accounting principles
	B.	The accounting principles used in the presentation of Interim Financial Statements are consistent with those principles used in the presentation of the latest annual financial statements. All significant accounting policies have been applied consistently with year ended December 31, 2001.

Organitech USA, Inc.

(A Development Stage Company)

Notes to Condensed Unaudited Consolidated Interim Financial Statements

Note 2 -	Basis of Presentation (Continued)
	C.	The preparation of Interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation of the Interim Financial Statements have been included. The results of operations for the nine month period ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. The Interim Financial Statements should be read in conjunction with the Company's annual financial statements as of December 31, 2001 and for the year then ended and the accompanying notes thereto.
	D.	Accounting for the impairment or disposal of Long-Lived Assets
		Effective January 1, 2002, the Company adopted SFAS No. 144 - Accounting for the Impairment or Disposal of Long-Lived Assets. This Statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated. Impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. SFAS No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
Note 3 -	Loss Per Share
	Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. The computation of diluted loss per share does not assume the issuance of common shares for all potential common shares as the effect would be anti-dilutive.
Note 4 -	Private placement
	On June 16, 2002, the Company entered into a securities purchase agreement with third party ("investor"), with respect to the issuance of 5,500,000 common shares, at a price of U.S.$. 0.363 each and granting to the investor options to purchase 188,179 common shares at an exercise price of U.S.$.0001 per share and 46,242 common shares at an exercise price of U.S.$1 per share, represent 33.1/3 % of the Company's issued share capital on a fully diluted basis.
	The Company and the investor, signed on amended schedule to the securities purchase agreement, whereby:
	1.	On July 8, 2002 the total proceed U.S.$ 2 million shall be paid to the Company over a period of 25 months, commencing August 2002.
	2.	The Company shall issue to the investor common shares on a pro-rata basis upon actual payments of the proceed.
	3.	"Vote together" agreement was signed between the first two investors and the Company's president and shareholder of approximately 35% of the Company's share capital.
	As of October 30, 2002 the Company have received the first two installments in the total of U.S.$ 100,000, but did not yet issue the applicable shares or granted options under the said agreement.

Organitech USA, Inc.

(A Development Stage Company)

Notes to Condensed Unaudited Consolidated Interim Financial Statements

Note 5 -	Contingencies and Commitments
	A.	Organitech Ltd. is committed to pay royalties to the Israeli government on proceeds from the sales of products, which the Israeli government participated in their research and development by way of grants. Under the terms of the Company's approved funding programs by the Israeli government - Office of the Chief Scientist, royalty payments are computed on the portion of sales from such products at a rate 3% to 5%. The commitment to the Office of the Chief Scientist is limited to the amount of the received participation.
		The terms of the Chief Scientist grants restrict Organitech Ltd. ability to manufacture products or transfer the technologies developed using this grants outside of Israel.
		As of September 30, 2002, the balance of royalty bearing grants due by the Company to the Office of the Chief Scientist is approximately U.S. $ 288 thousands.
	B.		In February 2000, Organitech Ltd. signed a distribution agreement whereby it granted Net Alim the exclusive right to market Organitech Ltd.'s GrowTECH platforms in Israel. Under the terms of the agreement, Net Alim agreed to purchase two GrowTECH platforms in consideration for U.S. $100,000. In March 2000, Organitech Ltd. received an advance payment from Net Alim in an amount of U.S.$ 60,000. In July 2000, Organitech Ltd. delivered the two GrowTech platforms to Net Alim.
			Organitech Ltd. is currently involved in negotiations with Net Alim regarding certain claims concerning the GrowTech platforms delivered and the distribution agreement. According to the Company's legal advisors the Company's exposure in respect of these claims would be immaterial.
	C.		In July 2000, the Company signed a memorandum of understanding with a Singaporean company ("Agronaut") whereby the Company committed to sell two beta version GrowTECH platforms ("GrowTECH platforms") in consideration for U.S.$ 50,000 each. The Company received an advance of U.S.$100,000 for two GrowTECH platforms which were scheduled to be delivered during 2001. The two GrowTECH platforms were delivered in June 2001. An experimental stage commenced upon delivery of the two GrowTECH platforms. Agronaut will be released from its obligations under this agreement should the GrowTECH platforms show unsatisfactory production capabilities, as agreed upon between the parties. In this case, the Company will return U.S.$75,000 to Agronaut upon receipt of the two GrowTECH platforms. As of the balance sheet date the Company has not received acceptance approval from Agronaut regarding the two GrowTECH platforms.
	D.		In July 2001, the Fund for Export Encouragement of the Israeli Ministry of Industry and Trade ("FEE"), has agreed to participate in financing Organitech Ltd. marketing expenses incurred during 2001 and according to the approved marketing plan, up to an amount of U.S.$ 40,000, subject to fulfillment of the Fund's requirements.
			As of September 30, 2002, Organitech Ltd. has received grants from the FEE in the amount of U.S.$ 40 thousands.
	E.		In November 2001, Organitech Ltd. and Agronaut received approval from the Singapore-Israel Industrial Research and Development ("SIIRD") for funding the development of an updated commercial version of the GrowTECH. SIIRD will participate in 40% of the research and development expenses incurred, subject to a maximum amount of U.S.$ 421,359. As of September 30, 2002 Organitech Ltd. has received U.S.$ 193,000 from SIIRD. Organitech Ltd., together with the Singaporean company is obligated to pay royalties to SIIRD ranging from 1.5% to 2.5% on sales of products developed with the grants from SIIRD, not to exceed the total amount of grants received.

Organitech USA, Inc.

(A Development Stage Company)

Notes to Condensed Unaudited Consolidated Interim Financial Statements

Note 5 -	Contingencies and Commitments (Continued)
	F.	In September 2001, Organitech Ltd. received an approval for Magnaton program through the Office of the Israeli Chief Scientist ("OCS"). This R&D program reflects a joint venture between Organitech Ltd. and the Weitzman Institute in order to develop new varieties of miniature tomatoes that can be adapted to the GrowTECH 2000 system. The OCS participates in 66% of the research and development expenses incurred, subject to a maximum amount of NIS 344,282 (approximately U.S.$ 74 thousands). In October 2001, Organitech Ltd. received a down payment of U.S.$ 19,779. Organitech Ltd. is obligated to pay royalties to the Weitzman institute up to 5% on sales of products developed with the grants from the Magnaton program.
	G.	On December 1, 2001, the Company signed an agreement with Agronaut to establish and incorporate a Singaporean company, subject to obtaining sufficient government and/or private funding, which will be engaged in the Agro-Technologies field under the name of "Organitech Asia". Organitech Asia will be established with an authorized share capital of 100,000 Singapore Dollars, of which the Company shall hold 50% and Agronaut shall hold the remaining 50%.
	H.	On September 27, 2002, the Company signed a memorandum of understanding with an Israeli herbs farmer and exporter (the grower) to establish joint venture to be incorporated as an Israeli company, which will be engaged in the Agro-Technologies field under the name of "Jordan River Herbs". Jordan River Herbs will be established with an authorized share capital of NIS 100,000, of which the Company shall hold 50% and the grower shall hold the remaining 50%. Under the memorandum of understanding the Company will sell and provide Jordan River Herbs equipment and services on exclusive basis. Under the said memorandum both the Company and the grower agreed to invest in Jordan River Herbs sum of NIS 25,000 each.

Item 2. Plan of Operation.

Forward Looking Statements

This report contains forward-looking statements about our plans, objectives, expectations and intentions. You can identify these statements by words such as "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "anticipate" or other similar words. You should read statements that contain these words carefully. They discuss our future expectations, contain projections concerning our future results of operations or our financial conditions or state other forward-looking information, and may involve known and unknown risks over which we have no control. We cannot guarantee any future results, level of activity, performance or achievements or the Company's ability to continue as a going concern. Moreover, we assume no obligation to update forward-looking statements or update the reasons why actual results could differ materially from those anticipated in forward-looking statements.

Plan of Operation

Our core business is conducted primarily through our wholly-owned subsidiary OrganiTech Ltd., a company organized under the laws of Israel (hereinafter - "OrganiTech"). OrganiTech develops technologies, platforms, and applied engineering solutions that cost effectively and completely automate the method by which many foods, plants, and extracts are cultivated. Since OrganiTech's formation, it has been developing its first proprietary solution, the GrowTECH 2000(TM) ("GrowTech"), which is a low input-high output, self-contained, portable, robotic, sustainable agricultural platform designed to automatically seed, transplant and harvest commercial quantities of hydroponic, pesticide free, green leaf vegetables. OrganiTech has received a U.S. patent for the GrowTech, which we believe will provide OrganiTech with a strong advantage over its competitors and enable OrganiTech to increase its research and development efforts of integrating the technologies of the GrowTech into new platfor ms. OrganiTech recently commenced the commercial launch and initial sales of a new line of its products, PhytoChamber(TM). PhytoChamber is a two-chambered, cost-effective platform that maximizes growth conditions for certain plants used by biotechnology researchers.

GROWTECH-3000

The company is researching new application for the GrowTech platforms both in the agro field and in the Ag-Bio. A most interesting application, still to be commercially proven is tissue culture propagation or more specifically the acclimatization of tissue culture matter. The propagation of tissue culture is the method used in many plants such as strawberries, bananas, tobacco and many other houseplants and other plants. The machine used for this implication is called the GROWTECH-3000.

GROWTECH-4000

The Company has also developed a machine to answer market demand in the field of growth platforms for potted products, including the significant market of home plants. The machine that has the ability to provide cheap and quality solution is called the GROWTECH-4000.

The GT-2000, GT-3000 and GT-4000, all have a horizontal version GT-X500 that is more suitable for geographical areas that can use a significant supply of sun light throughout the year. This will enable the company to market its products in these countries as well and not be limited to difficult climate countries only

We intend to focus the majority of our financial resources over the next 12 months on OrganiTech, which is endeavoring, among other things, to complete development of the different versions of GrowTech machines and increase the marketing efforts related thereof. The primary research and development goals of OrganiTech over the next 12 months are to:

[ ] Develop a commercially viable cultivation platform for green leaf plants;

[ ] Continue research on the development of new platforms by migration of its existing technologies to new applications;

[ ] Improve the operational characteristics of the GrowTech and the PhytoChamber;

[ ] Research new potential markets and opportunities.

Additionally, we plan to increase OrganiTech's involvement with its business activities in Singapore through the development of an updated commercial version of the GrowTech which is adaptable to the needs of the Southeast Asian market. In order to fund this activity in Singapore, OrganiTech and a Singaporean company have received approval for financing from the Singapore-Israel Industrial Research and Development Foundation ("SIIRDF"). SIIRDF will fund 40% of the research and development expenses incurred in connection with the development of a commercial version of the GrowTech, up to a maximum amount of U.S.$421,359. OrganiTech Ltd. has received final approval from the SIIRDF for the funding project.

OrganiTech, together with the Singaporean company, will be obligated to pay royalties to SIIRDF ranging from 1.5% to 2.5% on sales of products developed with the funding from the SIIRDF. The amount of royalties payable to the SIIRDF shall not exceed the amount of funding from the SIIRDF. In November 2001, Organitech received U.S.$126,000 from SIIRDF. In September 2002, the company has received an additional amount of over 67,000 US$. During 2002 The Company expects to receive an additional $60,000.

OrganiTech is also planning on increasing its involvement with its business activities in Europe and North America. OrganiTech is currently negotiating with third parties to establish beta site farms in Europe and North America.

During the course of the first quarter of 2002, the Company applied for financing of up to $40,000 for the fiscal year 2002 from the Fund for Export Encouragement of the Israeli Ministry of Industry and Trade ("FEE").

On June 16, 2002, the Company entered into a securities purchase agreement with B.L.M N.V. ("the investor"), with respect to the issuance of 5,500,000 common shares, at a price of U.S.$. 0.363 each and granting to the investor options to purchase 188,179 common shares at an exercise price of U.S.$.0001 per share and 46,242 common shares at an exercise price of U.S.$1 per share, represent 33.1/3 % of the Company's issued share capital on a fully diluted basis.

The Company and the investor, signed an amended schedule to the securities purchase agreement, whereby:

1. The total proceed U.S.$ 2 million shall be paid to the Company over a period of 25 months, commencing August 2002.
2. The Company shall issue to the investor common shares on a pro-rata basis upon actual payments of the procedure.
3. "Vote together" agreement was signed between the investor and the Company's president and shareholder of approximately 35% of the Company's share capital.
4. Following the signature of the amended schedule to the agreement, a new director was nominated to the board of directors of the company.

The execution of the securities purchase agreement, as well as fulfilling all government support already approved, should be sufficient for the Company's work plan for the next 24 months.

To date, B.L.M N.V. has executed the first 2 payments with accordance to the securities purchase agreement.

The Company is currently evaluating funding alternatives. Although in April 2002 the management decided on reduction of current burn rate by the dismissal of 60% of the employees and by reducing other expenses, due to the Agreement with B.L.M company, the Company is planning to hire new employees in the R& D and marketing areas.

On September 2002, the Company entered into a corporation with a major grower and exporter of herbs to Europe (hereinafter - "the partner").

Subsequent to the balance sheet, Organitech has signed a memorandum of understanding with the partner in order to establish a new Israeli company, on basis of equal ownership of the Company and the partner, that will use The Company's technology as well as the partner's marketing ability and connections in Europe. We predict that the new company will start operating during the last quarter of 2002, with possible sales within the next 4 months, using our GROWTECH 2500 machines.

A first batch of propagated tissue cultures was supplied to a major plant grower and distributor in Israel. OrganiTECH hopes to use this milestone as a jumping board to our GROWTECH 3000 machines.

As a part of an on-going process, Organitech has been making an effort to make it's products both easier and cheaper to manufacture and use. Technical improvements have been made so the reliability of the machines is now higher then ever.OrganiTech's and our success and our, as well as future operational and developmental requirements, will depend upon numerous factors, including:

[ ] the progress of our and OrganiTech's research activities;

[ ] the number and scope of our and OrganiTech's research programs;

[ ] the establishment of additional beta site farms in other key markets apart from Singapore, such as in Europe and North America;

[ ] the progress of our and OrganiTech's development activities;

[ ] our and OrganiTech's ability to maintain current research and development programs;

[ ] the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and

[ ] the costs and timing of regulatory approvals.

OrganiTech is currently in negotiations with a third party to lease and operate a production facility. OrganiTech has received approval from the Investment Center of the Israel Ministry of Commerce and Trade to operate a production facility under certain tax exempt conditions. The receipt of such tax benefits is conditional upon OrganiTech's fulfilling certain obligations stipulated by Israeli law, regulations published thereunder and instruments of approval, such as moving our operations into a certain geographic area as determined by the Investment Center. If OrganiTech fails to comply with such conditions, the tax benefits may be canceled and OrganiTech may be required to refund, in whole or in part, any benefits previously received. In connection with the production facility, we and/or OrganiTech may purchase plant equipment or other significant equipment.

Item 3. Controls and Procedures

a. Within 90 days prior to the date of the filing of this report, the Company's Chief Executive Officer and Chief Financial Officer conducted An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.

Based upon that evaluation such officers concluded that our disclosure controls and procedures are effective to ensure that information is gathered, analyzed and disclosed on a timely basis.

PART II - OTHER INFORMATION

 Item 6. Exhibits and Reports on Form 8-K.

(b) Reports on Form 8-K

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

OrganiTech USA, Inc.

Date: October 30th, 2002

By:/s/Lior Hessel

Name: Lior Hessel

Title: President and chief of operations

By:/s/ Doron Shachar

Name: Doron Shachar

Title: Company's Secretary

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-QSB of OrganiTech USA, Inc. (the "Company") for the three months ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "report"), the undersigned, Lior Hessel, Director, President and Chief Executive Officer of the Company, certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and result of operations of the Company.

November 21st, 2002

/s/ Lior Hessel

Lior Hessel

Director, President and

Chief Executive Officer

(Principal Executive Officer)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-QSB of OrganiTech USA, Inc. (the "Company") for the three months ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "report"), the undersigned, Doron Shachar, Acting Chief Financial Officer of the Company, certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and result of operations of the Company.

November 21st, 2002

/s/ Doron Shachar

Doron Shachar, Adv.

Acting Chief Financial Officer

(Principal Financial Officer)

[Section 302/Form 10-QSB Certification]

CERTIFICATION

I, Doron Shachar, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of OrganiTech USA, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 21st, 2002

/s/ Doron Shachar________________
Doron Shachar, Adv.

Acting Chief Financial Officer

[Section 302/Form 10-QSB Certification]

CERTIFICATION

I, Lior Hessel, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of OrganiTech USA, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 21st, 2002

/s/ Lior Hessel
Lior Hessel

Director, President and Chief Executive Officer