UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For quarterly period ended September 30, 2003
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _______
Commission file number: 000-30065
INTREPID TECHNOLOGY & RESOURCES, INC., AND SUBSIDIARIES
-------------------------------------------------------
FKA IRON MASK MINING CO.
------------------------
(exact name of registrant as specified in its charter)
IDAHO
-----
(State or other jurisdiction of incorporation or organization)
501 West Broadway, Suite 200, Idaho Falls, ID 82304
- --------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (208) 529-5337
Indicate by check mark whether the registrant: (1) has filed all reports
required by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ] The number of shares of the
Registrant's Common Stock, as of November 13, 2003: 99,016,139 shares
outstanding of a total 135,000,000 authorized.
EXPLANATION OF AMENDMENT
The Registrant, Intrepid Technology & Resources, Inc., (the "Company"), received
two letters from the Securities and Exchange Commission dated November 24, 2003
and February 3, 2004. The Commission made comments and requested the registrant
amend the original filing of the Report on form 10-QSB to include the
substantive changes resulting from the merger of March 25, 2002. Amended hereto
are Items 1, & 2.
OFFICERS
Dr. Dennis D. Keiser, Chief Executive Officer & President
Dr. Jacob D. Dustin, Vice President, Secretary and Treasurer
DIRECTORS
Dr. Dennis D. Keiser, Chief Executive Officer & President
Chairman of the Board
Dr. Jacob D. Dustin, Vice President, Secretary and Treasurer
Michael F. LaFleur, Board Member
William R. Myers, Board Member
D. Lynn Smith, Board Member
COMMON STOCK
Par value .005
135,000,000 authorized
99,016,139 issued and outstanding at November 13, 2003
Intrepid Technology & Resources, Inc., and Subsidiaries' common stock trades on
the Bulletin Board under the symbol IESV.
FINANCIAL REPORTS
A copy of Intrepid Technology & Resources, Inc.'s Financial Reports, filed with
the Securities and Exchange Commission, may be obtained by writing to:
Intrepid Technology & Resources, Inc.
501 West Broadway
Suite 200
Idaho Falls, Idaho 83402
www.intrepid21.com
or at: The Securities and Exchange Commission office, Public Reference Room 450
Fifth Street, N.W., Washington D.C. 20549 or at the SEC web site address
(http:// www.sec.gov)
TRANSFER AGENT
Columbia Stock Transfer Company
PO Box 2196
Coeur d'Alene, Idaho 83816-2196
Phone: 208-664-3544
Fax: 208-664-3543
Email: columbia5183@cs.com
AUDITOR
Balukoff, Lindstrom & Co., P.A.
877 West Main Street, Suite 805
Boise, Idaho 83702
208-344-7150
2
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<Table>
Item 1. Financial Statements
Balance Sheets........................................................................... 4
Statements of Operations................................................................. 5
Statements of Cash Flows................................................................. 6
Notes to Unaudited Financial Statements.................................................. 7
Item 2. Management's Discussion and Analysis..................................................... 11
Results of Operations.................................................................... 11
Capital Requirements..................................................................... 12
Item 3. Controls and Procedures.................................................................. 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings........................................................................ 14
Item 2. Changes in Securities.................................................................... 14
Item 3. Defaults Upon Senior Securities.......................................................... 14
Item 4. Submission of Matters to a Vote of Security Holders...................................... 14
Item 5. Other Information........................................................................ 14
Item 6. Exhibits and Reports on Form 8-K......................................................... 14
Signature Page........................................................................... 16
Certifications .......................................................................... 18
</Table>
3
ITEM 1. FINANCIAL STATEMENTS
INTREPID TECHNOLOGY & RESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
SEPTEMBER 30, JUNE 30,
2003 2003
UNAUDITED AUDITED
------------- ------------
ASSETS
Current Assets:
Cash $ 105,291 $ 27,175
Receivables, net of allowance for doubtful
accounts of $0 and $0 respectively 297,214 412,058
Investments -- 5,000
Other assets 9,426 3,986
------------ ------------
Total current assets 411,931 448,219
Equipment, net 34,695 37,177
Deferred tax asset 361,121 385,543
------------ ------------
Total Assets $ 807,747 $ 870,939
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 207,072 $ 245,596
Accrued liabilities 79,033 163,097
Deferred compensation 193,232 193,232
Line of credit -- 199,779
Note Payable 201,767 --
Long term debt - current portion 86,845 84,800
------------ ------------
Total current liabilities 767,949 886,504
Long term debt -- --
------------ ------------
Total liabilities 767,949 886,504
Commitments and contingencies
Shareholders' equity:
Common stock, $.005 par value, 135,000,000 authorized, 97,930,584
and 97,130,584 shares issued and outstanding, respectively 459,652 455,653
Additional paid-in capital (164,177) (170,181)
Notes receivable - shareholders (36,900) (36,900)
Retained earnings (deficit) (218,777) (264,137)
------------ ------------
Total shareholders' equity 39,798 (15,565)
------------ ------------
Total Liabilities and Shareholders' Equity $ 807,747 $ 870,939
============ ============
</Table>
The accompanying notes are an integral part of these financial statements.
4
INTREPID TECHNOLOGY & RESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
For the Quarter
Ended
September 30,
2003 2002
------------ ------------
Revenue $ 803,938 $ 645,113
Direct operating costs 494,575 573,264
------------ ------------
Gross profit 309,363 71,849
Selling, general and administrative expenses 232,946 257,494
------------ ------------
Income (loss) from operations 76,417 (185,645)
Interest expense 6,635 6,787
------------ ------------
Net income (loss) before income taxes 69,778 (192,432)
Provision for income taxes (benefit) 24,422 (77,804)
------------ ------------
Net income (loss) $ 45,360 $ (114,628)
============ ============
Net income (loss) to common shareholders $ 45,360 $ (114,628)
============ ============
Basic earnings (loss) per share $ .0005 $ (.0013)
============ ============
Diluted earnings per share $ -- $ --
============ ============
Dividends paid per common share -- --
============ ============
</Table>
The accompanying notes are an integral part of these financial statements
5
INTREPID TECHNOLOGY & RESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ IN WHOLE DOLLARS EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
For the Quarter Ended September 30,
2003 2002
-------------- ---------------
Cash flows from operating activities:
Net income (loss) $ 45,360 $ (114,628)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation 2,482 2,461
Expenses in exchange for issuance of common stock 10,004 41,190
Changes in assets and liabilities:
Accounts receivable, net 114,844 44,822
Prepaids and other assets (5,440) (1,299)
Deferred tax asset 24,422 (77,804)
Accounts payable (38,524) 42,308
Accrued liabilities (84,058) (13,331)
Deferred compensation -- 54,028
------------- -------------
Net cash provided by (used) by operating activities 69,089 (22,253)
Cash flows from investing activities:
Sale of investment 5,000 --
------------- -------------
Net cash used in investing activities 5,000 --
Cash flows from financing activities:
Net change in line of credit 1,982 (4,582)
Proceeds from notes payable 2,045 --
------------- -------------
Net cash provided by (used in) financing activities 4,027 (4,582)
Increase (decrease) in cash and cash equivalents 78,116 (26,835)
Cash and cash equivalents at beginning of period 27,175 71,959
------------- -------------
Cash and cash equivalents at end of period $ 105,291 $ 45,124
============= =============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest paid $ 4,969 $ 6,787
Non cash investing and financing transactions
Expenses in exchange for common stock 10,004 35,190
Payment of accrued expenses with common stock -- 6,000
Conversion of line of credit to note payable 201,767 --
</Table>
The accompanying notes are an integral part of these financial statements
6
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with United States generally accepted accounting principles ("U.S.
GAAP") for interim financial information and with instructions to Form 10-QSB of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by U.S. GAAP for complete financial statements. The
preparation of the consolidated financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying
notes. Actual results could differ from estimates. In the opinion of management,
all adjustments, which consist of normal and recurring adjustments, necessary
for fair presentation have been included. These financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's 2003 Annual Report on Form 10-KSB for the year ended June 30,
2003, as filed with the Securities and Exchange Commission.
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All significant inter-company transactions and
balances have been eliminated in consolidation.
NOTE 2. MERGER.
On March 25, 2002, the Company was created by merging Intrepid Engineering
Services, Inc., an Idaho corporation ("IES"), Western Technology and Management,
Inc., an Idaho corporation ("WTM"), and Iron Mask Mining Company (IMKG).
Originally the merger was reported as a business acquisition under SFAS 141
"Business Combinations," with recognition of goodwill and the reporting of
intangible assets. After consultation with the SEC and review of accounting
standards, it was determined the merger should be accounted for as a capital
transaction with IES as the accounting acquiror. The accounting for this type of
transaction is identical to a reverse merger except that no goodwill or
intangible assets are recorded. The financial statements of the 10-KSB have been
amended to reflect the change in the accounting of the merger.
The consideration paid in connection with the merger, determined through
arms-length negotiations between executive management resulted in IMKG issuing
25 million shares of its common stock for the shares of IES and WTM. As a result
of the merger WTM and IES shareholders own 25% and 6%, respectively, of the
outstanding shares of stock. Subsequent to the merger, the name was changed to
Intrepid Technology and Resources, Inc.
7
The following table reports the Company's condensed and consolidated balance
sheet information as originally reported and amended showing the adjustments for
the merger ($ in whole dollars):
<Table>
<Caption>
SEPTEMBER 30, SEPTEMBER 30,
2003 2003
ORIGINAL ADJUSTMENT RESTATED
------------- ------------- -------------
ASSETS
Current Assets:
Cash $ 105,291 $ 105,291
Receivables, net of allowance 297,214 297,214
Other receivables -- --
Other current assets 9,426 9,426
------------- -------------
Total current assets 411,931 411,931
Equipment, net 34,695 34,695
Goodwill 538,947 (538,947)(a) --
Mining rights 3,273,456 (3,273,456)(b) --
Deferred tax asset 361,121 361,121
------------- -------------
Total Assets $ 4,620,150 $ 807,747
============= =============
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 207,072 $ 207,072
Accrued liabilities 79,033 79,033
Deferred compensation 193,232 193,232
Line of credit 201,767 201,767
Long term debt - current portion 86,845 86,845
------------- -------------
Total current liabilities 767,949 767,949
Long term debt -- --
Commitments and contingencies
Common stock, $.005 par value 459,652 459,652
Additional paid-in capital 12,076,394 (12,240,571)(c) (164,177)
Notes receivable - shareholders (36,900) (36,900)
Retained earnings (deficit) (8,646,945) 8,428,168(d) (218,777)
------------- -------------
Total shareholders' equity 3,852,201 39,798
------------- -------------
Total Liabilities and Shareholders'
Equity $ 4,620,150 $ 807,747
============= =============
</Table>
- ----------
(a) As a result of the merger no goodwill or intangible assets are to be
recorded
(b) To eliminate all value(s) associated with the Garnett and Copper Cliff
properties in Montana
(c) As a result of the merger the equity of the Company is reduced by the
amount of the mining rights and intangible assets that were eliminated
(d) To adjust the accumulated deficit as a result of the merger
8
NOTE 3. DESCRIPTION OF BUSINESS
In March 2002, Iron Mask Mining Company merged with Intrepid Engineering
Services and Western Technology Management. The Company now operates as Intrepid
Technology and Resources, Inc., and subsidiaries ("the Company"), an Idaho
corporation.
The Company is a biofuels renewable and alternative energy development and
operating company with strengths in engineering and technology. While the
Company's primary source of current revenue is the sale of engineering services
to a variety of clients, it is posturing itself for a primary business purpose
of developing, constructing, and operating a portfolio of projects in the
Renewable and Alternative Energy sector, with a special emphasis on production
of biofuels - particularly, biogas (methane), ethanol and, eventually, hydrogen.
The Company's strategy is to provide the overall technical and integration
management for planning, coordinating, developing, operating and implementing
such projects. The Company's initial emphasis is on establishing several
geographically dispersed complexes in the Southern Idaho region and then
expanding to other locations within Idaho and the Western United States. The
Company provides credit in the normal course of business to its customers and
performs ongoing credit evaluations of those customers. It maintains allowances
for doubtful accounts based on factors surrounding the credit risk of specific
customers, historical trends, and other information. Credit losses, when
realized, have been within the range of the Company's expectations and,
historically, have not been significant.
SCIENCE AND TECHNOLOGY DIVISION
The Science and Technology Division, is a collection of nationally recognized
experts in various Scientific and Engineering disciplines that have consulting
arrangements with the Company to provide expert advice and service on an
as-needed basis. Over 200 such experts have made arrangements to consult with
the Company in a host of industries--Nuclear Science, Renewable Energy, Material
Science, Construction Management, Soil Science, Crop Management, Process
Engineering, and others. Individual staff members typically possess advanced
academic credentials and extensive science or engineering work experience.
ENGINEERING SERVICES DIVISION
The Engineering Services Division brings together a team of highly experienced,
professionally registered engineers and construction management personnel to
provide complete in-house "design-build-operate" capability. Besides support of
internal Company projects and initiatives, the Division also services a diverse
external customer base ranging from the federal government to private commercial
and industrial clients. The Engineering Services Division has experienced a
doubling of its "work-for-others" load each year for the past 3 years - a strong
indication of customer satisfaction and recognition of the quality of services
provided.
MINING AND MINERAL RIGHTS
In May 2000, the Company entered into an agreement with American Diatomite,
L.L.C., an Idaho limited liability company ("American") wherein the Company
acquired the right to develop and mine forty-two unpatented mining claims
located in Gooding County, Idaho that contain diatomaceous earth (diatomite).
The agreement also included an option to purchase said claims at a future date
and a continuing annual maintenance obligation. After extensive research and
consultation, Intrepid determined that the available supply of already developed
diatomaceous earth deposits exceed the current demand and was unable to find a
viable market for the diatomite in question. For that reason, the Company saw
little to no opportunity or benefit associated with continuing to maintain
either the development and mining rights or the future purchase option with
their attendant obligations. Consequently, the Company entered into an agreement
effective October 14, 2003 to return the development and mining rights to
American Diatomite, L.L.C., and forego the purchase option in return for
forgiveness of any accrued financial obligations and cancellation the original
May 2000 agreement. The Company is not recording any value for these rights.
The Company entered into an agreement dated August 23, 2001 and Addendum dated
September 24, 2001 with Cordoba Corporation and Garnet Mining Corporation,
whereby in exchange for the issuance of 16,367,280 shares of the common stock of
the Company (subject to later adjustment depending on the share value of the
market trading price of the Company's common shares) it acquired the mineral
rights to lands that have been drilled in the past on approximately 250-foot
centers. These lands are located in Western Montana approximately fifty miles
northeast of
9
Missoula, Montana. There is insufficient data to support whether or not this
property has any definable reserves or tonnages of mineralized materials and
further exploration would be needed in order to make such a determination and
therefore the Company is not reporting any value for the mineral rights.
The Company will continue to explore opportunities to maximize shareholder value
from this asset.
CUSTOMERS
At present, Company revenue is derived from "work-for-others" by the Engineering
Services Division, with any profits being used to develop the Biofuels business
line. In 2003, the Company managed several engineering services agreements with
Idaho National Engineering and Environmental Laboratory ("INEEL") at Idaho
Falls, Idaho, which constituted the majority of the Company's revenue. In 2003,
only INEEL provided more than ten percent of the total.
Development Activities. The primary purpose of the Company is to obtain, permit
and develop favorable properties for alternative/renewable energy production and
provide the associated engineering design and construction management services
required to support the construction and operation of the related facilities.
Secondarily, the Company will continue to expand its engineering services "work
for others" base to generate additional revenue to augment working capital
requirements in support of its alternative and renewable energy efforts. The
realization of profits are dependent upon successful execution of that business
model and inducing larger companies or private investors to purchase these
"turn-key" alternative/renewable energy generation/production facilities;
increasing the number and value of "work for others" services contracts; and the
sale of mineral rights.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the annual financial statements
of the Company as of June 30, 2003, are applied consistently in these financial
statements. In addition, the following accounting policy is applied:
The accompanying unaudited consolidated financial statements for the three
months ended September 30, 2003 reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management, necessary
for a fair presentation of the financial position and operating results for the
interim period. The condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and notes thereto,
together with management's discussion and analysis of the financial condition
and results of operations, contained in the Company Annual Report on Form 10-KSB
for the fiscal year ended June 30, 2003. The results of operations for the three
months ended September 30, 2003 are not necessarily indicative of the results
for the entire fiscal year ending June 30, 2004.
NOTE 4. EARNINGS PER COMMON SHARE
Basic earnings per share are computed based on net income and the weighted
average number of common shares outstanding. The Company does not have any
securities that would cause diluted earnings per share.
<Table>
<Caption>
(000's except per share amounts)
Quarters Ended September 30,
--------------------------------
2003 2002
-------------- -------------
Net income (loss) $ 45 $ (114)
Weighted average shares outstanding-
Common shares 97,130,00 89,896,344
Basic earnings per share $ .0005 $ (.0013)
============ ============
Diluted earnings per share $ -- $ --
============ ============
</Table>
10
NOTE 5. LINE OF CREDIT/TERM LOAN.
The Company had a line of credit of $200,000. As of September 25, 2003 the
Company converted this line of credit to a term loan at the same interest rate
of prime plus two percent. The Company makes monthly payments of $5,000 with
final payment due on March 15, 2004. The loan is secured by all business assets
and personally guaranteed by the principals of the Company. The following
employees of the Company have given unlimited personal guarantees for the loan:
Dennis Keiser (President), Jacob Dustin (Vice President), Donald Kenoyer, S.
Scott Francis, and Gary Mecham.
Shareholder Notes - The following shareholders who are also officers, employees
or directors have personally lent money to the Company. The notes are unsecured
demand notes. It is not anticipated by the Company that the notes will be called
in the next year. The following are shareholder creditors to the Company: The
loans from Mr. Kenoyer of $21,864 and Mr. Dustin of $43,709 accrue interest at
an annual rate of 10 percent payable on demand.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains forward-looking statements that involve known
and unknown risks and uncertainties which may cause actual results in future
periods to differ materially from those indicated herein as a result of a number
of factors, including, but not limited to, those set forth under "Factors That
May Affect Future Results," Notes to the Consolidated Financial Statements, Part
I, Item 1., Legal Proceedings, and the discussion below. When the Company uses
words like "may," "believes," "expects," "anticipates," "should," "estimate,"
"project," "plan," their opposites and similar expressions, the Company is
making forward-looking statements. These expressions are most often used in
statements relating to business plans, strategies, anticipated benefits or
projections about the anticipated revenues, earnings or other aspects of our
operating results. We make these statements in an effort to keep stockholders
and the public informed about our business and have based them on our current
expectations about future events. Such statements should be viewed with caution.
These statements are not guarantees of future performance or events. As noted
elsewhere in this report, all phases of our business are subject to
uncertainties, risks and other influences, many of which the Company has no
control over. Additionally, any of these factors, either alone or taken
together, could have a material adverse effect on the Company and could change
whether any forward-looking statement ultimately turns out to be true. The
Company undertakes no obligation to publicly release updates or revisions to
these statements. The following discussion should be read in conjunction with
audited consolidated financial statements and the notes filed thereto on Form
10-KSB with the U.S. Securities and Exchange Commission for the year ending June
30, 2003.
RESULTS OF OPERATIONS
REVENUE
Revenue for the first quarter ended September 30, 2003, increased 24.6% to
$803,938 compared to $645,113 for the same period of 2002. This increase was
mainly the result of higher dollar engineering services contracts performed in
the first quarter of fiscal year 2003.
Throughout calendar year 2002, and 2003, the Company has managed an engineering
services agreement with Idaho National Engineering and Environmental Laboratory
("INEEL") at Idaho Falls, Idaho, which constituted the majority of the Company's
revenue. The Company's other primary customers were: Fluor Federal Services,
Inc., Duratek, Argonne National Laboratory West, the Bureau of Land Management
and the State of Idaho. Only INEEL provided more than ten percent of the total
revenue recognized by the Company in 2003.
DIRECT OPERATING COSTS
For the quarter ending September 30, 2003, the Company's direct operating costs
decreased 13.7% to $494,575 from $573,264 for the same period ending September
30, 2002. The Company made many efforts to reduce direct costs by using less
subcontracted services, eliminating certain rental fees, closing the Montana and
Washington offices, making better use of supplies, and exercising better
management of direct payroll costs.
11
GROSS PROFIT
The Company had gross profit of $309,363 in the first quarter 2003 compared to
$71,849 for the same quarter ended September 30, 2002. This 330% increase in
gross profit is a mark of increased sales and better management and utilization
of available resources.
GENERAL SELLING AND ADMINISTRATIVE EXPENSES
For the first quarter ended September 30, 2003, the Company had general selling
and administrative expenses of $232,946 compared to $257,494 at September 30,
2002. This 9.5% decrease in general selling and administrative expenses in the
first quarter of fiscal year 2004, is mainly due to the reduced legal,
accounting and consulting fees. The Company also discontinued the rent of
certain office space. The general selling and administrative expenses for
September 30, 2002 is $4,539 less than originally reported as a result of
amortization of intangible assets through the merger which have now been
eliminated as a part of the amendment to this report on Form 10-QSB.
INTEREST EXPENSE
Interest expense decreased slightly by 2.2% for the first quarter ended
September 30, 2003 as compared to the same period ending September 30, 2002
($6,639 vs. $6,787). The interest expense was for interest paid on the line of
credit and 10% interest accrued on notes payable to officers and employees of
the Company.
NET INCOME (LOSS)
The Company realized a profit of $69,778 before taxes for the first quarters
ended September 30, 2003 compared to a net loss of $192,432 for the same period
ending September 30, 2002. For the first quarter ending September 30, 2003 the
net income after tax was $45,360 and can be attributed to the increase in
revenue and corresponding decreases in both direct and indirect expenses. The
loss for September 30, 2002 is $4,539 less than originally reported as a result
of amortization of intangible assets through the merger, which have now been
eliminated as a part of the amendment to this report on Form 10-QSB. The
revision of the report on Form 10-KSB/A for the year ended June 30, 2003 has
since removed all goodwill and intangible assets, and therefore no other merger
costs remain on the balance sheet to be amortized over future periods.
CAPITAL RESOURCES AND LIQUIDITY
The Company has made reasonable efforts to meet cash flow demands from ongoing
operations and has improved its capital position over that of one year ago. The
Company finished the first quarter ending September 30, 2003 with cash available
of $105,291 compared to $27,175 at June 30, 2003. The Company believes that it
will still be necessary to continue to supplement the cash flow from operations
with the use of outside resources such as additional loans and possibly
investment capital by issuance of debenture notes and preferred stock. As of
September 30, 2003, the Company had a working capital of deficit of $356,018
compared to a deficit of $438,285 for the year ending June 30, 2003. The current
ratio at September 30, 2003 was: .54:1 and .51:1 at June 30, 2003.
The Company has had ongoing capital-intensive engineering projects and continues
to search for new investment capital through private preferred stock and
debenture bonds to fund the start up of renewable energy projects. The Company
believes that with new engineering and technical services contracts and
prospects for bringing these renewable energy projects on line that it will be
able to meet obligations as they become due. The Company is also continuing its
aggressive collection of its accounts receivable. No receivables appear to be
uncollectible.
The Company had an available line of credit of $200,000 of which $190,000 was
converted to a term loan as of September 25, 2003. The term loan or note payable
bears interest at the prime rate plus two percent and is secured by all business
assets and personally guaranteed by the officers and key employees of the
Company. As of September 30, 2003, the loan was in good standing. The Company
also has shareholder notes payable from certain officers, employees or
directors. The notes are unsecured demand notes. It is not anticipated by the
Company that
12
the notes will be called in the next year. The following are shareholder
creditors to the company: the loans from Mr. Kenoyer of $21,894 and Mr. Dustin
of $43,709 accrue interest at an annual rate of 10 percent payable on demand.
Access to Capital - Over the next twelve months the Company believes that it
will be necessary to supplement the cash flow from operations with the use of
outside resources such as additional loans and possibly investment capital by
issuance of debenture notes or preferred stock.
Material Commitments for Capital Expenditures - The Company has no outstanding
commitments at this time, though it anticipates purchase of engineering design
hardware and software, additional computers, and office furniture to expand its
operations. The Company also intends to purchase a proprietary process design
for ethanol production. Source of funding for office-related expenses will come
from ongoing operations generated by engineering services. The source of funding
for proprietary design and potential acquisitions will be made by outside
capital resources.
Seasonal Changes -The Company's operating revenue is generally not affected by
seasonal changes.
ITEM 3. CONTROLS AND PROCEDURES
(a) Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation of our disclosure controls and procedures, as such term
is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), within 90 days of the filing date of this
report. Based on this evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and procedures are
effective in alerting them on a timely basis to material information relating to
our Company (including its consolidated subsidiaries) required to be included in
our reports filed or submitted under the Exchange Act.
(b) There have been no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation referenced in paragraph (a) above.
13
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements, Schedules and Exhibits
(b) Three exhibits are filed as part of this report.
(c) The Company filed no reports on Form 8-K in the first quarter of 2004
1. Exhibits
<Table>
<Caption>
Exhibit No. Description Incorporated by Reference from
- ----------- ----------- Registrant's
------------------------------
3.1 Articles of Incorporation. Form 10SB Registration March 22, 2000
3.2 Bylaws. Form 10SB Registration March 22, 2000
3.3 Amended Articles of Incorporation. Form 10SB Registration March 22, 2000
3.4 Amended Articles of Incorporation. Form 10SB Registration March 22, 2000
4.1 Specimen Stock Certificate. Form 10SB Registration March 22, 2000
10.1 Yellow Pines Resources Agreement. Form 10SB Registration March 22, 2000
10.2 American Diatomite Agreement. Form 10SB Registration March 22, 2000
10.3 American Diatomite Agreement. Form 10-KSB October 20, 2000
10.4 Agreement to Sell and Purchase Mineral Reserves, Real Property and
Shares of Common Stock Form 10-KSB October 15, 2001
10.5 Addendum to Agreement to Sell and Purchase Mineral Reserves, Real
Property and Shares of Common Stock Form 10-KSB October 15, 2001
10.7 2003 Stock Option Plan Schedule 14(a) October 24, 2002
31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certification of Principal Financial
Officer by Vice-President, Secretary and Treasurer
32 Certification pursuant to 18 U.S.C. SECTION 1350 by Chairman and
Chief Executive Officer and Vice-President, Secretary and Treasurer
</Table>
14
Reports on Form 8-K
<Table>
10.6 Iron Mask Mining Company merger agreement with Intrepid Engineering
Company and Western Technology and Management, Inc. Form 8-K April 8, 2002
Intrepid Technology and Resources, Inc. change of certifying
accountants Form 8-K May 24, 2002
Amendment to report pro forma financial information on merger filed
on Form 8-K April 8, 2002 Form 8-K/A June 11, 2002
Amendment, Item 7. Letter from accountant and Company correspondence Form 8-K/A June 20, 2002
Resignation of Registrant's Directors and change in management Form 8-K July 8, 2002
Resignation of Registrant's Directors Form 8-K August 21, 2002
Amendment to Form 8-K filed on May 24, 2002 for change of certifying
accountants. Correction letter of predecessor accountant. Form 8-K/A September 10, 2002
Election of Lynn Smith to the Board of Directors and Chairman of the
Audit Committee Form 8-K September 13, 2002
Serving of Cure Notice to Cordoba Corporation for Delivery of Form 8-K February 6, 2003
Lein-Free Deeds to Garnet Mineral Properties
</Table>
15
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.
INTREPID TECHNOLOGY & RESOURCES, INC.
(Registrant)
Date: February 18, 2004 By: /s/ Dr. Dennis D. Keiser, Chief
Executive Officer & President
----------------------------------------
Date: February 18, 2004 By: /s/ Dr. Jacob D. Dustin, Vice President,
Secretary, and Treasurer
----------------------------------------
16
EXHIBIT INDEX
<Table>
<Caption>
Exhibit No. Description Incorporated by Reference from
- ----------- ----------- Registrant's
------------------------------
3.1 Articles of Incorporation. Form 10SB Registration March 22, 2000
3.2 Bylaws. Form 10SB Registration March 22, 2000
3.3 Amended Articles of Incorporation. Form 10SB Registration March 22, 2000
3.4 Amended Articles of Incorporation. Form 10SB Registration March 22, 2000
4.1 Specimen Stock Certificate. Form 10SB Registration March 22, 2000
10.1 Yellow Pines Resources Agreement. Form 10SB Registration March 22, 2000
10.2 American Diatomite Agreement. Form 10SB Registration March 22, 2000
10.3 American Diatomite Agreement. Form 10-KSB October 20, 2000
10.4 Agreement to Sell and Purchase Mineral Reserves, Real Property and
Shares of Common Stock Form 10-KSB October 15, 2001
10.5 Addendum to Agreement to Sell and Purchase Mineral Reserves, Real
Property and Shares of Common Stock Form 10-KSB October 15, 2001
10.7 2003 Stock Option Plan Schedule 14(a) October 24, 2002
31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certification of Principal Financial
Officer by Vice-President, Secretary and Treasurer
32 Certification pursuant to 18 U.S.C. SECTION 1350 by Chairman and
Chief Executive Officer and Vice-President, Secretary and Treasurer
10.6 Iron Mask Mining Company merger agreement with Intrepid Engineering
Company and Western Technology and Management, Inc. Form 8-K April 8, 2002
Intrepid Technology and Resources, Inc. change of certifying
accountants Form 8-K May 24, 2002
Amendment to report pro forma financial information on merger filed
on Form 8-K April 8, 2002 Form 8-K/A June 11, 2002
Amendment, Item 7. Letter from accountant and Company correspondence Form 8-K/A June 20, 2002
Resignation of Registrant's Directors and change in management Form 8-K July 8, 2002
Resignation of Registrant's Directors Form 8-K August 21, 2002
Amendment to Form 8-K filed on May 24, 2002 for change of certifying
accountants. Correction letter of predecessor accountant. Form 8-K/A September 10, 2002
Election of Lynn Smith to the Board of Directors and Chairman of the
Audit Committee Form 8-K September 13, 2002
Serving of Cure Notice to Cordoba Corporation for Delivery of Form 8-K February 6, 2003
Lein-Free Deeds to Garnet Mineral Properties
</Table>