RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Financial statements
(Expressed in canadian dollars)
Period ended August 31, 2001
UNAUDITED
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
August 31, 2001 and May 31, 2001
(Unaudited)
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August 31 May 31
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ASSETS
Current assets:
Cash and short-term investments $ 697,494 $ 1,394,051
GST and other receivables 30,824 74,301
Prepaid expenses 8,442 8,442
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736,760 1,476,794
Fixed assets (note 2) 407,835 435,236
Deferred development costs 1 1
Goodwill, net of accumulated
amortization of $89,165 (May 31 - $82,574) 19,773 26,364
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$ 1,164,369 $ 1,938,395
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 343,597 $ 299,369
Due to government (note 4) 241,559 200,694
Shareholders' equity:
Share capital (note 3) 8,743,768 8,743,768
Deficit (8,164,555) (7,305,436)
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579,213 1,438,332
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$ 1,164,369 $ 1,938,395
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See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations and Deficit
Three month periods ended August 31, 2001 and 2000, and cumulative from
inception
(Unaudited)
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Cumulative
Period from
June 13, 1991
(inception) to
2001 2000 August 31, 2001
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Income:
Interest $ 6,482 $ 22,626 $ 174,006
Fees and licenses -- -- 622,482
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6,482 22,626 796,488
Operating expenses:
Development 444,779 123,141 3,102,079
Consulting 106,729 159,207 1,533,917
Professional fees 76,264 56,337 985,635
Sales and marketing 59,028 36,953 442,583
Management fees 42,000 50,000 915,386
Rent and property taxes 34,862 31,125 258,404
Depreciation and amortization 32,788 34,267 206,041
General and administrative 31,328 50,885 664,994
Factory overhead 18,136 5,686 71,202
Travel 12,543 15,410 368,868
Amortization 6,591 6,591 89,165
Interest and bank charges 553 271 136,649
Interest on convertible debenture -- 7,043 141,834
Patents -- -- 44,286
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865,601 576,916 8,961,043
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Loss for the period (859,119) (554,290) (8,164,555)
Deficit accumulated during development
stage, beginning of period (7,305,436) (4,340,723) --
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Deficit accumulated during development
stage, end of period $(8,164,555) $(4,895,013) $(8,164,555)
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Loss per share $ (0.03) $ (0.03) $ --
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Weighted average number of common
shares outstanding (note 3) 24,753,697 19,372,905 --
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See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
Three month periods ended August 31, 2001 and 2000, and cumulative from
inception
(Unaudited)
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Cumulative
Period from
June 13, 1991
(inception) to
2001 2000 August 31, 2001
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Cash provided by (used in):
Operating activities:
Loss for the period $ (859,119) $ (554,290) $(8,164,555)
Items not involving cash:
Interest on convertible debenture -- 7,043 115,970
Amortization of fixed assets 32,788 34,267 206,041
Amortization of goodwill 6,591 6,591 89,165
Interest expense on converted loan -- -- 96,000
Expenses settled by issuance of
common shares -- -- 431,388
Foreign exchange gain 1,250 -- (25,621)
Change in non-cash operating
working capital:
GST and other receivables 43,477 (28,117) (30,824)
Prepaid expenses -- -- (8,442)
Accounts payable and
accrued liabilities 44,228 (732,986) 262,252
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(730,785) (1,267,492) (7,028,626)
Financing activities:
Due to government 40,865 -- 241,559
Issuance of convertible debentures -- -- 1,860,000
Issuance of common shares -- 2,202,700 2,272,767
Issuance of special warrants -- -- 2,870,659
Exercise of share purchase warrants -- 553,541 553,541
Proceeds from loan payable -- -- 254,000
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40,865 2,756,241 8,052,526
Investing activities:
Purchase of fixed assets (5,387) (10,200) (613,876)
Deferred development costs -- -- (1)
Cash acquired on reverse takeover -- -- 261,850
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(5,387) (10,200) (352,027)
Foreign exchange gains held on
foreign currency (1,250) -- 25,621
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Change in cash and cash equivalents (696,557) 1,478,549 697,494
Cash and cash equivalents,
start of period 1,394,051 1,712,725 --
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Cash and cash equivalents, end
of period $ 697,494 $ 3,191,274 $ 697,494
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See accompanying notes to interim financial statements.
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements
Three month periods ended August 31, 2001
(Unaudited)
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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 policies which have been applied on a consistent basis in these
interim financial statements, refer to the Company's annual financial
statements.
2. FIXED ASSETS:
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Accumulated Net Book Net Book
Cost Amortization Value Value
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Machinery and equipment $ 530,336 $ 166,602 $ 363,734 $ 409,498
Furniture 11,451 4,186 7,265 8,288
Vehicles 15,848 6,315 9,533 5,897
Computer hardware 56,241 28,938 27,303 11,553
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$ 613,876 $ 206,041 $ 407,835 $ 435,236
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3. SHARE CAPITAL:
There were no common shares issued during the period. As of August 31,
2001, the Company had 34,052,636 common shares and 3,240,250 Company stock
options outstanding. In addition, there are 201,667 compensation options
outstanding exercisable at $0.60 per share and expiring on June 14, 2002,
issued in connection with a private placement in June 2000. During the
period, the company granted 125,000 options pursuant to the stock option
plan, exercisable at $0.70 and expiring on July 31, 2004. There were NIL
Company stock options which expired during the period.
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 (2000: 9,845,939).
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements (Cont'd)
Three month periods ended August 31, 2001
(Unaudited)
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4. 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. During the period,
the Company received $40,865 of repayable contributions.
5. RELATED PARTY TRANSACTIONS:
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Type of service Nature of relationship August 31, 2001
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Sales and marketing Shareholder and officer $ 44,028
Management fees Shareholder, director and officer 39,000
Development charges Shareholders and director 123,953
Consulting Shareholder and director 4,350
Professional fees Shareholder, director and officer 10,487
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6. COMPARATIVE FIGURES:
Certain comparative figures have been reclassified to conform with
presentation adopted in the current year.