SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For The Quarterly Period Ended December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
Commission File Number 33-2775-A
TECHNICAL VENTURES INC.
______________________________________________________________________________
(Exact Name of Small Business Issuer As Specified In Its Charter)
New York 13-3296819
______________________________________________________________________________
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Of Organization) Identification No.)
3411 McNicoll Avenue, Unit 11, Scarborough, Ontario, Canada M1V 2V6
______________________________________________________________________________
(Address of Principal Executive Offices, Zip Code)
Issuer's Telephone Number, Including Area Code (416) 299-9280
______________________________________________________________________________
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last
Report)
Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of February 14, 2003.
38,705,706 Shares Of Common Stock, $.01 Par Value
______________________________________________________________________________
Page 1 of 18 Pages
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31, 2002
CONSOLIDATED BALANCE SHEETS[ Notes 1 and 2 ]
ASSETS December 31,2002 June 30,2002
Not Audited Audited
CURRENT ASSETS
Cash $17,800 $32,663
Accounts Receivable 87,509 140,195
Inventory [Note 3] 53,028 69,377
TOTAL CURRENT ASSETS $158,337 $242,235
OTHER ASSETS
Deposits [Note 8] 44,240 49,528
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation of $559,373
at Dec. 31,2002 and $548,763 at June 30,
2002 271,053 93,058
TOTAL ASSETS $473,630 $384,821
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
CONSOLIDATED BALANCE SHEETS [Notes 1 and 2]
LIABILITIES December 31,2002 June 30,2002
Not Audited Audited
CURRENT LIABILITIES
Accounts Payable And Accrued Expenses $534,721 $531,252
Current Portion of Notes Payable
(Note 4) 89,875 82,357
Capital Lease Obligations (Note 4) 71,670 74,474
Loans From Private Lenders 65,292 66,878
Current Portion of Loan From
Stockholders, Unsecured, Interest Free 120,899 263,210
Total Current Liabilities 882,457 1,018,171
LONG-TERM LIABILITIES, net of current portion
Notes Payable 38,026 78,360
Shareholders 273,710 115,980
Other 24,993 25,823
336,729 220,163
STOCKHOLDERS' DEFICIENCY
Common stock $.01 par value, 50,000,000
shares authorized (Note 6):
Issued and outstanding, 36,195,706 at
Dec. 31, 2002 and 34,595,706 at
June 30, 2002 $361,957 $345,957
Additional Paid in Capital (Note 6): 6,168,320 5,874,321
ACCUMULATED OTHER COMPREHENSIVE INCOME 353,351 344,128
Deficit (7,629,184) (7,417,919)
Total Stockholders' Deficiency (745,556) (853,513)
$473,630 $384,821
See Notes To Condensed Consolidated Financial Statements
(2)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31, 2002
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(NOT AUDITED)
Six Months Ended Six Months Ended
Dec. 31, 2002 Dec. 31, 2001
SALES $397,616 $547,666
COST OF SALES 391,456 399,805
GROSS MARGIN 6,160 147,861
EXPENSES
Administration 103,646 48.852
Interest and Other 32,145 60,152
Research & Development 50,395 30,653
Selling 33,760 54,178
219,946 193,835
LOSS BEFORE UNDER NOTED ITEMS (213,786) (45,974)
Recovery of Realty Taxes 2,521 -
NET LOSS ($211,265) ($45,974)
BASIC LOSS PER COMMON SHARE ($0.00) ($0.00)
FULLY DILUTED LOSS PER COMMON SHARE ($0.00) ($0.00)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING FOR THE PERIOD 35,797,880 27,163,006
See Notes To Condensed Consolidated Financial Statements
(3)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31, 2002
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(NOT AUDITED)
Three Months Ended Three Months Ended
Dec. 31, 2002 Dec. 31, 2001
SALES $147,342 $224,326
COST OF SALES 162,217 169,684
GROSS MARGIN (14,875) 54,642
EXPENSES
Administration 59,994 17,335
Interest and Other 17,948 38,571
Research & Development 25,678 15,838
Selling 11,391 26,685
115,011 98,429
LOSS BEFORE UNDER NOTED ITEMS (129,886) (43,787)
NET LOSS ($129,886) ($43,787)
BASIC LOSS PER COMMON SHARE ($0.00) ($0.00)
FULLY DILUTED LOSS PER COMMON SHARE ($0.00) ($0.00)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING FOR THE PERIOD 36,125,054 27,163,006
See Notes To Condensed Consolidated Financial Statements
(4)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31, 2002
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIENCY)
(Amounts Expressed In US Dollars)
NOT AUDITED
<Table>
Common Stock Additional Cumulativ
Issued and Outstanding Paid In Translati
Shares Amount Capital Deficit Adjustmen
$ $ $ $
Balance June 30, 2001 27,163,006 271,630 5,342,204 (7,557,014) 327,035
Common Shares Issued 0
Net Loss (45,974)
Cumulative Translation
Adjustment 43,461
Balance, December 31,
2001 27,163,006 271,630 5,342,204 (7,602,988) 370,496
Balance June 30, 2002 34,595,706 345,957 5,874,320 (7,417,920) 344,128
Subscription Received 150,000
Common Shares Issued
(Note 6) 1,600,000 16,000 144,000
Net Loss (211,264)
Cumulative Translation
Adjustment 9,223
Balance, December 31,
2002 36,195,706 361,957 6,168,320 (7,629,184) 353,351
</Table>
See Notes To Consolidated Financial Statements
(5)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amount Expressed In US Dollars)
Not Audited
Six Month Period Six Month Period
Ended Ended
Dec. 31, 2002 Dec. 31, 2001
CASH FLOW FROM OPERATING ACTIVITIES
Net Loss ($211,265) ($45,974)
Adjustment to reconcile net loss
used by operating activities
Depreciation and amortization 25,701 11,507
Increase) Decrease In Accounts
Receivable 47,409 (14,479)
(Increase) Decrease In Prepaid Expenses 3,630 (556)
(Increase) Decrease In Inventory 13,737 11,128
Increase (Decrease) In Accounts
Payable And Accrued Expense 23,470 43,336
(97,318) 4,962
CASH FLOW FROM INVESTING ACTIVITIES
(Increase) Decrease In Deposits (143) 315
(Increase) Decrease In Advances
to Stockholders (63) (26)
Acquisition of Equipment & Property (207,202) -
(207,408) 289
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of note payable to Cooper
Financial (10,225) (11,520)
Repayments from Private Lenders (23,399) -
Proceeds from (repayments of)
Stockholders' Loans 29,695 11,228
Proceeds from stock option issuances 309,999 -
306,070 (292)
EFFECT OF EXCHANGE RATE ON CASH (16,207) (21,102)
NET INCREASE (DECREASE) IN CASH
BALANCE FOR THE PERIOD (14,863) (16,143)
Cash Balance, beginning of period 32,663 22,960
Cash Balance, end of period $17,800 $6,817
PAYMENTS MADE DURING THE PERIOD
FOR INTEREST $11,359 $8,630
See Notes To Condensed Consolidated Financial Statements
(6)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :
a) The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to
Form 10-QSB and Regulation S-B. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for fair presentation have been included.
Operating results for the six months ended December 31,2002 are not
necessarily indicative of the results that may be expected for the year
ended June 30, 2003. For further information refer to the financial
statements and footnotes thereto included in the annual report on form
10-KSB for the year ended June 30, 2002.
b) Principals Of Consolidation
The consolidated financial statements include the accounts of Technical
Ventures Inc. ("TVI") and its majority-owned subsidiaries, Mortile
Industries Ltd., ("Mortile"), Fam Tile Restoration Services Ltd. and
MPI Perlite Ltd. All material intercompany transactions and balances
have been eliminated.
c) Foreign Currency Translation:
Mortile maintains its books and records in Canadian dollars. Foreign
currency transactions are reflected using the temporal method. The
translation of the financial statements of the subsidiary from
Canadian dollars into United States dollars is performed for the
convenience of the reader. Balance sheet accounts are translated using
closing exchange rates in effect at the balance sheet date and income
and expense accounts are translated using an average exchange rate
prevailing during each reporting period. No representation is made
that the Canadian dollar amounts could have been or could be realized
at the conversion rates. Adjustments resulting from the translation
are included in the accumulated comprehensive income in stockholders'
deficiency.
d) Fair Value Presentation:
There are financial instruments, none of which are held for trading
purposes. Estimates that the fair value of all financial instruments
at December 31, 2002, does not differ materially from the aggregate
carrying values of its financial instruments recorded in the
accompanying balance sheet. The estimated fair value amounts have
been determined using available market information and appropriate
valuation methodologies. Considerable judgement is necessarily
required in interpreting market data to develop the estimates of fair
value, and accordingly, the estimates are not necessarily indicative
of the amounts that could realize in a current market exchange.
(7)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
NOTE 1: (cont'd)
e) Net Income (Loss) Per Share:
Basic net income (loss) per share is computed based on the average
number of common shares outstanding during the period. Fully diluted
net income (loss) per share reflects the potential dilution that
could occur if securities, or other contracts to issue common stock,
were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in any income . Such
securities or contracts are not considered in the calculation of
diluted income per share if the effect of their exercise or
conversion would be antidilutive.
f) Stock Based Compensation:
In December 1995, SFAS No. 123, Accounting for Stock-Based
Compensation, was issued. It introduced the use of a fair value-based
method of accounting for stock-based compensation. It encourages, but
does not require, companies to recognize compensation expense for
stock-based compensation to employees based on the new fair value
accounting rules. Companies that choose not to adopt the new rules
will continue to apply the existing accounting rules contained in
Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees. However, SFAS No. 123 requires companies that
choose not to adopt the new fair value accounting rules to disclose
pro forma net income and earnings per share under the new method.
SFAS No. 123 is effective for financial statements for fiscal years
beginning after December 15, 1995. The disclosure provisions of SFAS
No. 123 has been adopted.
NOTE 2: GOING CONCERN
Significant operating losses have been sustained since inception and
there is substantial doubt as to the ability to continue as a going
concern. Continued existence is dependent upon the ability to
generate sufficient cash flow to meet obligations on a timely basis.
As a result there is need of additional financing. No adjustment has
been made to the value of assets in consideration of the financial
condition.
NOTE 3: INVENTORY:
Inventory is comprised of the following:
December 31, June 30,
2002 2002
Raw Materials $53,028 $69,377
(8)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
NOTE 4: LONG TERM DEBT:
In August 1999 refinancing of the note payable to Cooper Financial
Corp. was completed. This obligation was guaranteed by a
stockholder. A refinancing charge was assessed thereby increasing
the principal owed to US $95,999 . At September 30, 2002 the new
loan provisions consisting of monthly payments of $3,150 were
fulfilled and the note was discharged.
The interest accrued on the Convertible Debenture was converted to a
promissory note of $179,585 . This note is payable monthly at the
amount of $6,500, including interest at the rate of 5% per annum.
At December 31, 2002 the company was current with these payments.
At December 31, 2002 a lease payable to FBX Holdings, in the amount
of $127,295 including principal and interest is in default. The
creditor has not called the obligation, however payment is due on
demand and as such the balance is reflected on the December 31,2002
balance sheet as a current liability.
NOTE 5: CONTINGENT LIABILITY AND RELATED COSTS:
Contingent liability under a breach of secrecy agreements, fiduciary
duty and misuse of confidential information lawsuit. Company's
attorneys are of the opinion that it's defences are meritorious
and the lawsuit will result in no material losses. Accordingly,
no provision is included in the accounts for possible related losses.
However,legal and any other related costs incurred, are reflected
for any contingencies, as a charge to operations for the year in
which the expenditures are determined.
NOTE 6: COMMON SHARES
The shares issuance's for the six months ended December 31, 2002
are summarized as follows:
Nature
Of
Payments Number of Paid Up Additional Issue
Shares Capital Paid Expense Proceeds Expense
In Capital
For Cash
Consid-
eration
From
Private
Investors 1,600,000 16,000 144,000 160,000
TOTALS 1,600,000 16,000 144,000 160,000
Common shares were issued during the six month period ending December 31, 2002
for cash. The shares have been valued at their fair market value considering
that they are restricted shares.
(9)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
The share issuance's for the six months ended December 31, 2001 are
summarized as follows:
Nature
Of
Payments Number of Paid Up Additional Issue
Shares Capital Paid Expense Proceeds Expense
In Capital
NONE -
TOTALS - - - - - -
NOTE 7: MAJOR CUSTOMERS
Five customers accounted for 78 % of consolidated net revenues for
the six month period of fiscal 2003, ending December 31, 2002.
In the corresponding period of fiscal 2001, 74 % of consolidated
revenues were accounted for by four customers. The loss of one or
more of these customers would have a detrimental effect on operating
results.
NOTE 8: ACQUISITION LETTER OF INTENT
On October 1, 2000, the company entered into a letter of intent to
acquire by November 1, 2000, all of the outstanding shares of an
unrelated company in exchange for the issuance of 2,125,000 shares
of common stock. Subsequently, both parties agreed to postpone the
closing date but have now mutually agreed to cancel the letter of
intent. The acquiree company has agreed to repay to the company,
the loan of $50,000 CND made to it in late 2000.
currently, negotiations are still ongoing. This acquisition, if
completed, will be accounted for as a purchase. The acquiree company
is a manufacturer of industrial products compatible to current
operations.
(10)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31, 2002
PART 1 - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
Liquidity and Capital Resources:
During the first six months of fiscal 2003 the company incurred an operating
loss of ($213,786), on net sales revenues of $397,616. Operations were
funded by investment capital, accounts receivable and a realty tax refund.
Subscribed capital of $150,000, at June 30, 2002, was received during the
first six months of fiscal 2003. Additionally the private placement of 1.6
million restricted shares, for US $160,000 was transacted at a price of
US $0.10 per share.
An income tax claim relative to R&D expenses will be filed for fiscal 2002 of
approximately $41,000 CD. . All such claims are audited by the Canadian Tax
Department and therefore there can be no assurance that the claim will be
refunded as filed or even in its entirety. As a result, the benefits of such
claims are only recorded when it is received.
Additionally, 3,600,000 options were outstanding as of December 31, 2002, with
an aggregate strike price value of US $650,000, should they be exercised.
However, there can be no assurance of this; 3,500,000 of these options were
to have expired at December 31, 2002, but have subsequently been extended to
March 31, 2003.
The accrued and outstanding interest due a former debenture holder was
established as a note payable, bearing 5% per annum interest, with an
outstanding balance of $127,901 at December 31, 2002 , with monthly payments
current at December 31, 2002. A lease payable to FBX Holdings and which has
been in default since 1994, continues to be reflected on the December 31, 2002
balance sheet as a current liability. The creditor fully appreciates the
circumstance of the corporation and has not called the obligation, however,
payment is due on demand. Reference should also be made to Financial Note 4
in regard of this matter.
Continued existence is dependent upon the ability to generate sufficient cash
flow to meet obligations on a timely basis; please reference Financial Note 2,
"Going Concern". It is anticipated that cash flows from operations in the
immediate future will be insufficient to meet requirements, however, there can
be no assurance of this and in order that current operations, development and
growth be sustained, there is therefore the need of additional financing.
TVI will continue to assess and investigate all avenues in respect of it's
financial requirements. If it is deemed to be in the best interest of the
Company and its stockholders, serious consideration will be given to raising
additional funds through private or public issuance's in the future.
(11)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
Significant property and equipment purchases and/or expansion of facilities
will only be considered if demand for company products warrant such expansion
and the financing of such expansion would not adversely effect the Company's
financial condition.
The new foaming product's introduction to many potential customers could
necessitate, should the marketing efforts come to fruition, immediate
expansion of existing warehouse facilities by approximately 30%.
Acquisition of additional equipment became necessary to performing relative
manufacturing functions in house and afford the ability to demonstrate the
use of proprietary foams and the new HSF foam to potential customers; rather
than contracting the work to an outside firm. In that regard, two injection
molding machines and a compound mixer were acquired during the first six
months of fiscal 2003 at a total purchase value of $203,071 . The units are
not new equipment but had been well maintained and are operational. These
units are being financed by investment in the company.
Results of Operations:
Net sales revenues for the first six months of fiscal 2002 decreased 27 % when
compared to those for the corresponding period of the previous year. The
decrease taking place in both custom compounding and proprietary products. The
decrease due to in part to the loss of a major customer, who have moved their
compounding requirements to their own facility off shore, and whose revenue
had accounted for 23 % of all revenues in the first six months of fiscal 2002.
Additionally, another major customer incurred steep declines of 39% in their
sales orders, which in turn effected the company's proprietary products
revenue. However, sales revenues as a result of the new HSF foaming
proprietary product, partially offset the declines experienced. With the new
equipment acquired and on going marketing efforts it is expected that this
decline will be slowed and hopefully eliminated in the third quarter, with
sales revenues increasing in the fourth quarter, although there can be no
assurance of this.
Comparative gross margins, as a percent of revenue, decreased to 2 % from
27 %. for the six month comparative period. This decline is primarily based
on decreased sales, resources directed to the installation and set up of the
acquired equipment, the upgrading and maintenance of existing equipment,
thereby maintaining the highly experienced manufacturing work-force.
Overall operating expenses increased 13 % over the corresponding period of
the previous year.
Administrative expenses increased 112%, when compared to those for the
corresponding six month period of the previous year as legal expense occurred
relative to a claim by a former financial consulting firm, Please note
Part II, Item I. Additionally there has been an accrual for potential
vacation pay expense.
Financial expenses decreased 47% when compared to those for the corresponding
six month period of the previous year, expenses such as accrued interest
declined due to reduction of debt, the non-recurrence of accrued interest for
ODC/IOC and the convertible debenture.
(12)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
R&D expenses increased 64 % when compared to those for the corresponding
period of the previous year as development of proprietary products continues
to be expanded.
Selling expenses decreased 38% when compared to previous year as selling
expenses in the US and Canada have been reduced and the resources redirected
to product development.
For the quarter ending December 31, 2002, net revenues decreased 34% when
compared to the corresponding period of the previous fiscal year. As reported
for the six month period; the loss of a major customer, steep declines in
compounding requirements of another major customer, resources directed to the
installation and set up of acquired equipment and the upgrading and
maintenance of existing equipment, and maintaining the highly
experienced manufacturing work-force, effected manufacturing
performance for this most recent fiscal period and the resultant manufacturing
loss of ($14,874).
As reported for the six month period, administration expenses increased
over the corresponding period of the previous year due to increase legal
expense and accrual of potential vacation pay expense. The decrease for
Financial expense, the increase in R&D expense and decline in Selling expense
are as reported for the six month period of fiscal 2003.
The foaming products are for the plastics and rubber industry, and are a
processing aid, providing significant cost reductions by reducing the amount
of plastic consumed, but also provides many other advantages to the industry,
such as improved surface finishes, physical properties and sink mark
elimination, lower part weight and shorter cycle times. Morfoam is a
concentrate encapsulated in an olefin binder, presented in pellet form to be
easily blended or metered into the users formulations. The product improves
cell structure and reduces voids when nitrogen is used as the primary foaming
agent. During fiscal 2002 the company finished developing it's HSF type
foaming compound. HSF is a cross-linkable - expandable plastic compound made
for direct injection processes. During a 'direct inject' process, a granular,
expandable compound is being transformed with a specialized injection molding
machine into a finished foamed part, which combines several features, such as
fine and closed cell structure, soft skin, profiled and color surface,
flexibility, buoyancy and light weight. HSF is based on ethylene and
propylene (co)polymers blends which can be processed into a finished foamed
part with commercially available injection-molding machines. The flow
properties of the HSF foaming material have been adjusted in such a manner
that these machines are able to process it without any modification. The
most significant attribute of HSF foams is heat stability. The heat stability
has been quantified as a % of shrinkage of a foam specimen after a 24 hour
treatment at 105 degrees Celcius (221 Degrees F). The shrinkage of HSF foams
typically is 4% - highly competitive with industry standards.
Potential customers that have completed their testing, advise that the
Company's foaming products are the product of choice, in that regard; a major
international toy manufacturer, a plastic crate and skid manufacturer, as well,
manufacturers in the construction and marine industries, with applications
for plastic wood, decorative trim and marine plywood. Sales revenue in this
product have more than doubled over the corresponding period of the previous
year and future sales appear even more promising.
(13)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
At December 31, 2002 there was a back log of orders totaling $93,264 .
Forward Looking Statements:
This Form 10-QSB contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially
from those set forth in the forward looking statements.
(14)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31, 2002
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
A legal action was commenced against the Corporation, its subsidiary,
Mortile Industries Ltd., their President, Frank Mortimer and the Dow
Chemical Company, on June 4,1999 in the Ontario Superior Court of
Justice (Commerical List); by a former customer, Endex Polymer
Additives Inc., Endex Polymer Additives Inc. (USA), Endex International
Limited and G. Mooney And Associates. The Dow Chemical Company is
defending separately.
The claims allege breach of secrecy agreements, fiduciary duty and misuse
of Endex confidential information. The Plaintiffs are seeking CAD $10
Million compensatory damages, further punitive damages of CAD $1 Million
and interlocutory and permanent injunctions.
Based on prior written legal opinions from its patent attorneys that the
allegations are without merit, the Corporation retained a law firm
specializing in Intellectual Property Law and is vigorously defending the
action.
After submission of the Defendants' evidence, the Plaintiffs abandoned
their claim for an interim injunction. The Defendants have moved for an
expeditious trial. The Court has ordered the parties to combine the
examinations for injunction proceedings with those for the preparation for
trial.
On September 16-17, 1999, at the hearing of the interlocutory injunction
motion, the parties agreed, on consent, to adjourn the motion until trial.
The parties agreed to expedite the matter to trial with an original target
date of about December 1999.
At December 31, 2002 no further direction had been received by the
company's counsel as to when the matter might proceed to trial nor had any
direction been received at the time of filing this report.
Separately, Technical Ventures Inc. has retained counsel to submit, on its
behalf, a motion to set aside a default judgment entered against the
Company, in the amount of US$172,500, in the District Court in the third
Judicial District, Court of Salt Lake City, Utah. The Company bases its
motion on two grounds. First, the default judgment is void because The
Company was not properly served with the Summons and Complaint. Secondly,
the Company claims that it should also be relieved from the default
judgment in the interest of justice because its failure to timely file an
answer due to lack of notice constitutes, at the least, excusable neglect
on the part of the Clerk's Office or the postal service and because it has
a meritorious defense to the complaint. On September 30, 2002 the Company's
motion was granted and the default judgment was set aside. On October
18 th, 2002 the Company filed a counter claim against plaintiff in the
Utah court.
(15)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31, 2002
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the first six months of fiscal 2003, 1,600,000 Restricted common
stock were issued pursuant to Section 4, of The Securities Exchange
Act. This Private Placement afforded the company $160,000. US in
equity capital.
All capital received relative to the Private Placement issuances is
being used for working capital.
At December 31, 2002, 3,600,000 options were outstanding; 3.5 million
of these options expired on December 31,2002, and were subsequently
extended to March 31, 2003. Should all the options be exercised they
have an aggregate strike price value of $650,000 . However, there
can be no assurance of this.
Restricted Stock is issued to pursuant to Section 4(2) of The
Securities Exchange Act and may only be registered and sold
pursuant to Rule 144, unless the restricted stock is registered by
the company, by means of any formal registrations which may be
available to it.
Additionally, on November 20th, 2002 the Board of Directors resolved
to establish register The 2002 Benefit Plan of Technical Ventures Inc.,
in which four million common stock of the company would be made
available to employees, managers, officers and other contributing
individuals, deemed fit by the board, as incentives to develop and
maintain personel and would proceed to prepare and file an S8
Registration relative to this plan.
In that regard, on December 24th, 2002, the company filed an S8
Registration, relative to The 2002 Benefit Plan of Technical Ventures
Inc., in which four million common stock were registered. The
registration became effective on filing. All capital received
pursuant to this plan will be used for working capital.
At the date of this report and during the current fiscal quarter
2,510,000 shares have been issued pursuant to the S8 Registration,
and The 2002 Benefit Plan of Technical Ventures Inc. Issuances were
to personell of the company's wholly owned subsidiary Mortile
Industries Ltd. Included in the issuances are 550,000 shares acquired
by Mr. Frank Mortimer, President of Mortile Industries and Technical
Ventures Inc; as well, 350,000 shares acquired by Larry Leverton
VP/Secretary of Mortile Industres and Technical Ventures Inc.
(16)
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
ITEM 6. EXHIBITS AND REPORTS ON FORM 8 K
(a) Exhibits - none
(b) Reports - none
(17)
<Page>
Technical Ventures Inc. Condensed Consolidated Report 10QSB For Financial
Period Ending December 31,2002
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.
TECHNICAL VENTURES INC.
Date: February 14, 2003 BY: /S/Frank Mortimer
Frank Mortimer, President
and Chief Executive Officer
Date: February 14, 2003 BY: /S/Larry Leverton
Larry Leverton
Chief Financial Officer
(18)
<Page>
CERTIFICATIONS
I Frank Mortimer, certify that:
1. I have reviewed this periodic report of Technical Ventures Inc. on
Form 10 QSB, dated December 31, 2002 .
2. Based on my knowledge, this periodic 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 report; and
3. Based on my knowledge, the financial statements,and other financial
information included in this periodic report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the period presented
in this periodic report.
February 14, 2002 By: /S/Frank Mortimer
President & Principal
Executive Officer
(19)
<Page>
CERTIFICATIONS
I Larry Leverton, certify that:
1. I have reviewed this periodic report of Technical Ventures Inc. on
Form 10 QSB, dated December 31, 2002 .
2. Based on my knowledge, this periodic 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 periodic report; and
3. Based on my knowledge, the financial statements,and other financial
information included in this periodic report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the period presented
in this periodic report.
February 14, 2002 By: /S/Larry Leverton
Larry Leverton, Secretary
Treasurer and Principal
Accounting Officer and Director
(20)