U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED August 31, 2003
Commission File Number ___________
INGEN TECHNOLOGIES, INC.
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f/k/a CREATIVE RECYCLING TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Georgia 88-0429044
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
35193 Avenue "A", Suite-C, Yucaipa, California 92399
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(Address of principal executive offices) (Zip Code)
(800) 259-9622
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(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, no par value
--------------------------
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 [ ] No [x]
At August 31, 2003, 16,084,208 shares of the registrant's common stock (no par
value) were outstanding.
Transitional Small Business Disclosure Format (check one):
YES / / NO /X/
CREATIVE RECYCLING TECHNOLOGIES, INC.
PART I. - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- ------------------------------------------------------------------------------------------------
As of August 31, 2003 2002
- ------------------------------------------------------------------------------------------------
TOTAL ASSETS $ -- $ --
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 35,000 $ 28,202
----------- -----------
Total current liabilities 35,000 28,202
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Long-term Liabilities
Officer's loan -- 948
----------- -----------
Total long-term liabilities -- 948
----------- -----------
Stockholders' Deficit
Common stock, no par value, authorized 500,000,000 shares; issued
and outstanding 3,221,524 for 2003 and 3,221,524 for 2002 5,758,406 5,758,406
Accumulated deficit (5,793,406) (5,787,556)
----------- -----------
Total stockholders deficit (35,000) (29,150)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -- $ --
=========== ===========
See notes to interim unaudited consolidated financial statement
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CREATIVE RECYCLING TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
For the three months ended August 31, 2003 2002
- --------------------------------------------------------------------------------
Sales $ -- $ --
Cost of Sales -- --
--------- -----------
Gross Profit -- --
Selling, General and Administrative Expenses -- 948
--------- -----------
Operating Loss -- (948)
--------- -----------
Net Loss $ -- $ (948)
========= ===========
Basic and diluted net loss per share NIL NIL
========= ===========
Weighted average number of common shares 3,221,524 3,221,524
See notes to interim unaudited consolidated financial statement
4
CREATIVE RECYCLING TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- -------------------------------------------------------------------------------
For the three months ended August 31, 2003 2002
- -------------------------------------------------------------------------------
Cash Flow from Operating Activities:
Net Loss $ -- $ (948)
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Net Cash Used in Operating Activities -- (948)
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Cash Flow from Investing Activities: -- --
Cash Flow from Financing Activities:
Advance from Officers -- 948
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Net Cash Provided by Financing Activities -- 948
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Net Increase in Cash -- --
Cash Balance at Beginning of Period -- --
---------- ----------
Cash Balance at End of Period $ -- $ --
========== ==========
See notes to interim unaudited consolidated financial statement
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NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Creative Recycling Technologies Inc., (the "Company"), is a
public Company trading under "CRTZ" trading symbol.
The Company is no longer operating, and will attempt to locate a new business
(operating company), and offers itself as a merger vehicle for a company that
may desire to go public through a merger rather than through its own public
stock offering.
Presentation of Interim Information: The accompanying consolidated financial
statements as of August 31, 2003 and 2002, for the three months ended August 31,
2003 and 2002 have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in consolidated financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. However,
the Company believes that the disclosures are adequate to make the information
presented not misleading. These consolidated financial statements should be read
in conjunction with the financial statements and the notes thereto included in
the Company's Annual Report on Form 10-KSB for the year ended May 31, 2003.
In the opinion of Management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows as of August 31, 2003 and 2002, for the
three months ended August 31, 2003 and 2002 have been made. The results of
operations for the three months ended August 31, 2003 are not necessarily
indicative of the operating results for the full year.
The company had no activity during the three months ended August 31, 2003.
Use of Estimates: Use of estimates: The preparation of the accompanying
financial statements in conformity with accounting principles generally accepted
in the United States requires management to make certain estimates and
assumptions that directly affect the results of reported assets, liabilities,
revenue, and expenses. Actual results may differ from these estimates.
Net Loss Per Share: Basic net loss per share includes no dilution and is
computed by dividing net loss available to common stockholders by the weighted
average number of common stock outstanding for the period. Diluted net loss per
share does not differ from basic net loss per share as the Company did not have
dilutive items during the audit period.
Principle of Consolidation and Presentation: The accompanying consolidated
financial statements include the accounts of Ingen Technologies, Inc. and its
subsidiaries after elimination of all intercompany accounts and transaction.
Certain prior period balances have been recalculated to conform to the current
period presentation.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting principles
generally accepted in the United Stated of America applicable to a going concern
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the Company does not have significant
cash or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to continue as
a going concern. Until that time, the stockholders have committed to covering
the operating costs of the Company.
The Company is not operating, and will attempt to locate a new business
(operating company), and offer itself as a merger vehicle for a company that may
desire to go public through a merger rather than through its own public stock
offering.
The company incurred a loss of none and $948 for the three months ended August
31, 2003 and 2002, respectively, and as of those dates, had an accumulated
deficit of $5,793,406 and $5,787,556, respectively.
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NOTE 3 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net loss per
share for the three months ended:
August 31, August 31,
2003 2002
----------- -----------
Numerator:
Net Loss $ -- $ (948)
----------- -----------
Denominator:
Weighted Average Number of Shares 3,221,524 3,221,524
----------- -----------
Net loss per share-Basic and Diluted NIL NIL
NOTE 4 - SEGMENT INFORMATION
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires that a publicly traded company must disclose information
about its operating segments when it presents a complete set of financial
statements. Since the Company is not operating, it has no reportable segment.
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company had notes payable to a related party in the amounts of none and $948
as of August 31, 2003 and 2002, respectively. The amount is non-interest bearing
and has no repayment terms.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
This Quarterly Report on Form 10-QSB contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, which
reflect management's current views with respect to future events and financial
performance. In this report, the words "anticipates," "believes," "expects,"
"intends," "future," "may" and similar expressions identify forward-looking
statements. These and other forward-looking statements are subject to certain
risks and uncertainties, including those discussed in the Risk Factors section
of this Item 2 and elsewhere in this Form 10-QSB, that could cause actual
results to differ materially from historical results or those anticipated.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. We undertake no obligation
to publicly release the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances occurring
subsequent to the filing of the Form 10-QSB with the Securities and Exchange
Commission.
OVERVIEW
Ingen Technologies, Inc., (formerly known as Creative Recycling Technologies
Inc., the "company") is a Georgia corporation. Creative Recycling Technologies,
Inc. merged with Ingen Technologies, Inc. in March of 2004 and changed its name
to Ingen Technologies, Inc. Prior to that, Creative Recycling Technologies, Inc.
traded under the symbol "CRTZ." The company discontinued its periodic reporting
under the Securities Act of 1934 in 1998. The company began reporting on EDGAR
again in November of 2005.
This Form 10-QSB is for a period of time prior to the merger of Ingen
Technologies, Inc. and Creative Recycling Technologies, Inc. During the quarter
reported on, to the best of current management's knowledge and belief, the
company was not actively engaged in a business and may or may not have been
actively seeking a merger candidate (depending on the particular period of
time). The information contained herein is compiled from a limited amount of
source material and may be subject to amendment if we are able to uncover more
information (our effort to do so is ongoing as of the date of the certification
of this Form 10-QSB by current company management).
As stated, we were not operational in fiscal year 2004 (June 1, 2003 to May 31,
2004). Therefore, we had no sales revenues in the fiscal quarter ending August
31, 2003 and no sales revenues in the fiscal quarter ending August 31, 2002.
We have had significant losses since inception. Our net loss was $948 in the
first quarter of fiscal year 2003, compared with no loss in the first quarter of
fiscal year 2004 (this quarter). We anticipate that we will not incur
substantial additional
operating losses until such time, and if, we actively engage in a business
enterprise. As of August 31, 2003, we had an accumulated deficit of $5,793,406
(up from $5,787,556 in the first quarter of fiscal year 2002).
We do not have a business plan for the remainder of fiscal year 2004. We may
attempt to find a merger candidate (with an active business enterprise).
Records currently available to company management do not indicate that any of
our securities were sold during this fiscal quarter.
CRITICAL ACCOUNTING POLICIES
Our significant accounting policies are disclosed in Note 2 to our consolidated
financial statements. Certain of our policies require the application of
management judgment in making estimates and assumptions that affect the amounts
reported in the consolidated financial statements and disclosures made in the
accompanying notes. Those estimates and assumptions are based on historical
experience and various other factors deemed to be applicable and reasonable
under the circumstances. The use of judgment in determining such estimates and
assumptions is by nature, subject to a degree of uncertainty. Accordingly,
actual results could differ from the estimates made. Our significant accounting
policies include:
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STOCK-BASED COMPENSATION
SFAS No. 123, "Accounting for Stock-Based Compensation," establishes the use of
the fair value based method of accounting for stock-based compensation
arrangements under which compensation cost is determined using the fair value
stock-based compensation determined as of the date of grant and is recognized
over the periods in which the related services are rendered. The statement also
permits companies to elect to continue using the intrinsic value accounting
method specified in Accounting Principles Bulletin Opinion No. 25, "Accounting
for Stock Issued to Employees," to account for stock-based compensation issued
to employees. Through May 31, 2005, we have elected to use the intrinsic value
based method and have disclosed the pro forma effect of using the fair value
based method to account for our stock-based compensation. We plan to continue
using the intrinsic value based method and providing disclosure for the pro
forma effect of using the fair value based method to account for our stock-based
compensation through our fiscal quarter ending in November, 2005.
As a result of the recent adoption by the Financial Accounting Standards Board
of SFAS No. 123 (revised 2004) "Share-Based Payment," or SFAS No. 123(R), we
will be required, beginning in our fiscal quarter ending February of 2006, to
apply the fair value method as prescribed in SFAS No. 123(R). Although our
adoption of SFAS No. 123(R) could have a material impact on our financial
position and results of operations, we are still evaluating the potential impact
from adopting this statement.
ALLOCATION OF COSTS
We allocate certain indirect costs associated with support activities such as
the rent and utilities for facilities. These costs are allocated between
research and development expense and general and administrative expense based on
headcount and/or square footage.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have off-balance sheet arrangements, financings, or other
relationships with unconsolidated entities or other persons, also known as
"special purpose entities" (SPEs).
RESULTS OF OPERATIONS
We were not operating in the first quarter of fiscal year 2004 and in the first
quarter of fiscal year 2003, and did not have sales revenues, costs of sales or
a gross profit or loss. We had no selling, general and administrative expenses
recorded for the quarter ending August 31, 2003 and have a record of $948 in
such expenses during the quarter ending August 31, 2002.
Our operating and net losses for the first quarter of fiscal year 2003 were
$948. We had no such losses in the first quarter of fiscal year 2004. We do not
anticipate profits or losses to accumulate until such time as we engage in a
business activity or merge with a company so engaged.
We have not generated profits to date and therefore have not paid any federal
income taxes since inception.
LIQUIDITY AND CAPITAL RESOURCES
We were not operational during the first quarter of fiscal year 2004, had no
sales revenues, securities sales or cash on hand.
Our future cash requirements will depend on whether we engage in a business
enterprise or merge with an active entity. Until then, we will have minimal
costs of staying in good standing as a corporation in Georgia. We have no
current plan in place, nor did we have the financial resources available in this
first quarter of fiscal year 2004 to resume periodic reporting on EDGAR or to
catch up on filing delinquent reports.
PLAN OF OPERATION
We had no plan in place in the first quarter of fiscal year 2004 to actively
engage in a business enterprise and no plan to do so during the rest of this
fiscal year.
TRENDS THAT MAY IMPACT OUR LIQUIDITY
Not applicable.
9
NEW EMPLOYEES
We do not anticipate hiring employees over the next twelve months.
BUSINESS RISKS
The following is a summary of the many risks and uncertainties we face in our
business. You should carefully read these risks and uncertainties as well as the
other information in this report in evaluating our business and its prospects.
WE HAVE A HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT, AND WE MAY NOT
ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE.
We have experienced significant operating losses in each period since our
inception. As of August 31, 2003, we have incurred total accumulated losses of
$5,793,406. We expect these losses to continue when we re-engage in an active
business enterprise or merge with an active entity; and it is uncertain when, if
ever, we will become profitable. These losses have resulted principally from
costs incurred in research and development and from general and administrative
costs associated with operations. If operational again, we expect to incur
operating losses in the future as a result of expenses associated with research
and product development as well as general and administrative costs. Even if we
do achieve profitability, we may not be able to sustain or increase
profitability on a quarterly or annual basis.
WE MAY BE LIABLE FOR DEBTS AND OBLIGATIONS FROM PRIOR OPERATIONS
As stated, we are not currently engaged in a business activity. However, given
the length of the statute of limitations for written contracts in many
jurisdictions (as well as the discovery of civil fraud), we may be liable in the
future for debts or claimed damages arising from our former operations.
WE ARE NOT CURRENT IN SECURITIES ACT OF 1934 PERIODIC REPORTING
We have not filed periodic reporting on the SEC's EDGAR system since 1998. We
have not filed a Form 15 that would end our prospective reporting obligation.
The filing of a Form 15 does eliminate the need to file past due EDGAR filings.
There is a risk the SEC could take steps to prevent our shareholders and the
public from trading in our securities because of our failure to file required
periodic reporting. There may be other risks associated with a failure to keep
up with periodic reporting to the SEC such as shareholder claims against the
company. If the company does attempt to catch up our SEC filings, there will be
substantial cost involved that may drain needed resources from the company's
operations (if any).
THERE ARE RISKS INVOLVED IN MERGING WITH ANOTHER COMPANY
If we choose to merge with another company, we may not be able to do so under
terms that are favorable to the company and our shareholders. The operations of
the other company may not be adequate or sustainable, resulting in a loss of
value of company stock. The company may sustain additional losses and ultimately
have to go out of business because of the intervening lack of success of the
company's business after a merger. There may be claims against the company or
past management filed by management, shareholders and/or creditors of the new
company after the merger if there is evidence of past acts or omissions that
have not be disclosed in the merger process or otherwise become matters of
material concern. Those currently in control of the company on a management
level, or on a stockholder voting level, will likely have no control over the
affairs of the company after a merger.
IF WE ENGAGE IN AN ACTIVE BUSINESS AGAIN, WE WILL LIKELY NEED ADDITIONAL CAPITAL
IN THE FUTURE TO SUPPORT OUR GROWTH, AND RAISING SUCH CAPITAL WILL LIKELY CAUSE
SUBSTANTIAL DILUTION TO EXISTING STOCKHOLDERS. IF ADDITIONAL CAPITAL IS NOT
AVAILABLE, WE MAY HAVE TO CURTAIL OR CEASE OPERATIONS (AGAIN).
Our current plans do not include starting up active business operations.
However, we may do so in the future or we may merge with a company that is
engaged in a business. If and when we do, it is likely the business will be in a
research and development phase, with or without sales revenues. We may have the
following considerations to manage while seeking and then utilizing additional
capital:
o the extent to which we enter into licensing arrangements,
collaborations or joint ventures;
o our progress with research and development;
10
o the costs and timing of obtaining new patent rights (if any);
o cost of continuing operations and sales;
o the extent to which we acquire or license other technologies; and
o regulatory changes and competition and technological developments
in the market.
We may be relying on future securities sales to enable us to grow and reach
profitability. There is no guarantee we will be able to sell our securities.
WE ARE SUBJECT TO NEW CORPORATE GOVERNANCE AND INTERNAL CONTROLS REPORTING
REQUIREMENTS, AND OUR COSTS RELATED TO COMPLIANCE WITH, OR OUR FAILURE TO COMPLY
WITH EXISTING AND FUTURE REQUIREMENTS COULD ADVERSELY AFFECT OUR BUSINESS.
We face new corporate governance requirements under the Sarbanes-Oxley Act of
2002, as well as new rules and regulations subsequently adopted by the SEC.
These laws, rules and regulations continue to evolve and may become increasingly
stringent in the future. In particular, we will be required to include
management and auditor reports on internal controls as part of our annual report
for the year ended December 31, 2006 pursuant to Section 404 of the
Sarbanes-Oxley Act. We cannot assure you that we will be able to fully comply
with these laws, rules and regulations that address corporate governance,
internal control reporting and similar matters. Failure to comply with these
laws, rules and regulations could materially adversely affect our reputation,
financial condition and the value of our securities.
OUR PRODUCTS MAY NOT BE SUCCESSFULLY DEVELOPED OR COMMERCIALIZED, WHICH WOULD
HARM US AND FORCE US TO CURTAIL OR CEASE OPERATIONS.
If we merge with an active company or start into business ourselves, it is
likely our product(s) will be relatively new in its or their development. These
products, once, and if, marketing commences, may not be successfully developed
or commercialized on a timely basis, or at all. If we are unable, for
technological or other reasons, to complete the development, introduction or
scale-up of manufacturing of these products or other potential products, or if
our products do not achieve a significant level of market acceptance, we would
be forced to curtail or cease operations. Even if we develop our products for
commercial use, we may not be able to develop products that:
o are accepted by, and marketed successfully to, the medical
marketplace;
o are safe and effective;
o are protected from competition by others;
o do not infringe the intellectual property rights of others;
o are developed prior to the successful marketing of similar
products by competitors; or
o can be manufactured in sufficient quantities or at a reasonable
cost.
WE MAY NOT BE ABLE TO FORM AND MAINTAIN THE COLLABORATIVE RELATIONSHIPS THAT OUR
BUSINESS STRATEGY REQUIRES, AND IF WE CANNOT DO SO, OUR ABILITY TO DEVELOP
PRODUCTS AND REVENUE WILL SUFFER.
If we become active, we may form research collaborations and licensing
arrangements with several partners at the same time to operate our business
successfully. To succeed, we will have to maintain our existing relationships
and establish additional collaborations. We cannot be sure that we will be able
to establish any additional research collaborations or licensing arrangements
necessary to develop and commercialize products using our technology or that we
can do so on terms favorable to us. If our collaborations are not successful or
we are not able to manage multiple collaborations successfully, our programs may
suffer.
Collaborative agreements generally pose the following risks:
o collaborators may not pursue further development and
commercialization of products resulting from collaborations or may
elect not to continue or renew research and development programs;
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o collaborators may delay clinical trials, under-fund a clinical
trial program, stop a clinical trial or abandon a product, repeat
or conduct new clinical trials or require a new formulation of a
product for clinical testing;
o collaborators could independently develop, or develop with third
parties, products that could compete with our future products;
o the terms of our agreements with our current or future
collaborators may not be favorable to us;
o a collaborator with marketing and distribution rights to one or
more products may not commit enough resources to the marketing and
distribution of our products, limiting our potential revenues from
the commercialization of a product;
o disputes may arise delaying or terminating the research,
development or commercialization of our products, or result in
significant litigation or arbitration; and
o collaborations may be terminated and, if terminated, we would
experience increased capital requirements if we elected to pursue
further development of the product.
IF WE HAVE AND ARE UNABLE TO PROTECT EFFECTIVELY OUR INTELLECTUAL PROPERTY,
THIRD PARTIES MAY USE OUR TECHNOLOGY, WHICH COULD IMPAIR OUR ABILITY TO COMPETE
IN OUR MARKETS.
If we become active, our success will likely depend on our ability to obtain and
protect patents on our technology and to protect our trade secrets. The patents
may not afford meaningful protection for our technology and products. Others may
challenge our patents and, as a result, our patents could be narrowed,
invalidated or unenforceable. In addition, our patent applications may not
result in the issuance of patents in the United States or foreign countries.
Competitors might develop products similar to ours that do not infringe on our
patents. In order to protect or enforce our patent rights, we may initiate
interference proceedings, oppositions, or patent litigation against third
parties, such as infringement suits. These lawsuits could be expensive, take
significant time and divert management's attention from other business concerns.
In addition, there is a substantial backlog of applications at the U.S. Patent
and Trademark Office, and the approval or rejection of patent applications may
take several years.
We cannot guarantee that our management and others associated with us will not
improperly use our patents, trademarks and trade secrets. Further, others may
gain access to our trade secrets or independently develop substantially
equivalent proprietary information and techniques.
OUR SUCCESS WILL DEPEND PARTLY ON OUR ABILITY TO OPERATE WITHOUT INFRINGING ON
OR MISAPPROPRIATING THE PROPRIETARY RIGHTS OF OTHERS.
If we become operational, we may be sued for infringing on the patent rights or
misappropriating the proprietary rights of others. Intellectual property
litigation is costly, and, even if we prevail, the cost of such litigation could
adversely affect our business, financial condition and results of operations. In
addition, litigation is time consuming and could divert management attention and
resources away from our business. If we do not prevail in any litigation, we
could be required to stop the infringing activity and/or pay substantial
damages. Under some circumstances in the United States, these damages could be
triple the actual damages the patent holder incurs. If we have supplied
infringing products to third parties for marketing or licensed third parties to
manufacture, use or market infringing products, we may be obligated to indemnify
these third parties for any damages they may be required to pay to the patent
holder and for any losses the third parties may sustain themselves as the result
of lost sales or damages paid to the patent holder.
If a third party holding rights under a patent successfully asserts an
infringement claim with respect to any of our products, we may be prevented from
manufacturing or marketing our infringing product in the country or countries
covered by the patent we infringe, unless we can obtain a license from the
patent holder. Any required license may not be available to us on acceptable
terms, or at all. Some licenses may be non-exclusive, and therefore, our
competitors may have access to the same technology licensed to us. If we fail to
obtain a required license or are unable to design around a patent, we may be
unable to market some of our anticipated products, which could have a material
adverse effect on our business, financial condition and results of operations.
12
IF WE LOSE OUR KEY MANAGEMENT PERSONNEL, OUR PRODUCT DEVELOPMENT AND
COMMERCIALIZATION EFFORTS WOULD SUFFER.
If we become operational, our performance will likely be substantially dependent
on the performance of our senior management, Board of Directors and key
technical personnel and advisers. The loss of the services of any member of our
senior management, Board of Directors, technical staff or advisory personnel (if
any) may significantly delay or prevent the achievement of product development
and other business objectives and could have a material adverse effect on our
business, operating results and financial condition.
OUR STOCK IS THINLY TRADED, WHICH CAN LEAD TO PRICE VOLATILITY AND DIFFICULTY
LIQUIDATING YOUR INVESTMENT.
The trading volume of our stock has been low, which can cause the trading price
of our stock to change substantially in response to relatively small orders.
Both volume and price could also be subject to wide fluctuations in response to
various factors, many of which are beyond our control, including:
o actual or anticipated variations in quarterly and annual operating
results;
o announcements of technological innovations by us or our
competitors;
o developments or disputes concerning patent or proprietary rights;
and
o general market perception of medical device and provider
companies.
IF THE OWNERSHIP OF OUR COMMON STOCK IS SOMEWHAT CONCENTRATED, IT MAY PREVENT
YOU AND OTHER STOCKHOLDERS FROM INFLUENCING SIGNIFICANT CORPORATE DECISIONS AND
MAY RESULT IN CONFLICTS OF INTEREST THAT COULD CAUSE OUR STOCK PRICE TO DECLINE.
It is likely our executive officers, directors and their affiliates own a
substantial, if not controlling, interest in our common stock. Accordingly, our
executive officers, directors and their affiliates will have some control over
the outcome of corporate actions requiring stockholder approval, including the
election of directors, any merger, consolidation or sale of all or substantially
all of our assets or any other significant corporate transactions. These
stockholders may also delay or prevent a change of control of us, even if such a
change of control would benefit our other stockholders. The concentration of
stock ownership may adversely affect the trading price of our common stock due
to investors' perception that conflicts of interest may exist or arise.
WE MAY ISSUE PREFERRED STOCK IN THE FUTURE, AND THE TERMS OF THE PREFERRED STOCK
MAY REDUCE THE VALUE OF YOUR COMMON STOCK.
Our Board of Directors will be able to determine the terms of
preferred stock attributes and issuances without further action by our
stockholders. If we issue preferred stock, it could affect your rights or reduce
the value of your common stock. In particular, specific rights granted to future
holders of preferred stock could be used to restrict our ability to merge with
or sell our assets to a third party. These terms may include voting rights,
preferences as to dividends and liquidation, conversion and redemption rights,
and sinking fund provisions.
WE HAVE NOT, AND CURRENTLY DO NOT ANTICIPATE, PAYING DIVIDENDS ON OUR COMMON
STOCK.
We have never paid any dividends on our common stock and do not plan to pay
dividends on our common stock for the foreseeable future. If operational in the
future, we intend to retain future earnings, if any, to finance operations,
capital expenditures and the expansion of our business.
ITEM 3. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures designed to ensure that material
information related to our company is recorded, processed, summarized and
reported within the time periods specified in the SEC rules and forms.
13
(a) As of the end of the period covered by this report, we carried out an
evaluation under the supervision and with the participation of our Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934). Based upon that evaluation, our CEO and CFO concluded, as
of the date of such evaluation, that the design and operation of such disclosure
controls and procedures were effective.
(b) No significant changes were made in our internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during our most recent fiscal quarter.
(c) Limitations. Our management, including our CEO and CFO, does not expect that
our disclosure controls or internal controls over financial reporting will
prevent all errors or all instances of fraud. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute, assurance
that the control system's objectives will be met. Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their costs. Because of
the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within our company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Controls can also be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the controls. The design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and any design may not succeed in achieving its stated goals
under all potential future conditions. Over time, controls may become inadequate
because of changes in conditions or deterioration in the degree of compliance
with policies or procedures. Because of the inherent limitation of a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We may from time to time become a party to legal proceedings arising in the
ordinary course of our existence or business (if and when we have one again). We
are not currently a party to any material pending litigation or other material
legal proceeding.
ITEM 6. EXHIBITS
Exhibit No. Document Description
- ----------- --------------------
31.1 Certification of Chief Executive Officer as required pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2 Certification of Chief Financial Officer as required pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*
32 Certification of Chief Executive Officer and Chief Financial Officer as
required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
- ---------------
* Filed herewith.
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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.
INGEN TECHNOLOGIES, INC.
March 2, 2006 /s/ Scott R. Sand
-------------------------------------
Scott R. Sand
Chief Executive Officer and Chairman
March 2, 2006 /s/ Thomas J. Neavitt
-------------------------------------
Thomas J. Neavitt
Secretary and Chief Financial Officer
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