FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of
1934
For the period ended February 28, 2001
RTICA Corporation (formerly Inzeco Holdings Inc.)
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(Translation of registrant's name into English)
999 Barton Street, Stoney Creek, Ontario L8E 5H4 Canada
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(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
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131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
February 28, 2001 and May 31, 2000
(Unaudited)
================================================================================
February 28 May 31
- --------------------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 1,992,420 $ 1,712,725
Miscellaneous receivables (note 3) 181,530 92,953
Prepaid expenses 8,442 8,442
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2,182,392 1,814,120
Fixed assets, net of accumulated depreciation
of $142,854 (2000: $24,114) 657,371 534,481
Deferred development costs (note 3) 464,583 1
Goodwill, net of accumulated amortization
of $75,983 (2000 - $56,210) 32,955 52,728
- --------------------------------------------------------------------------------
$ 3,337,301 $ 2,401,330
================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 124,137 $ 768,248
Convertible debentures 358,663 -
------------------------------------------------------------------------------
482,800 768,248
Convertible debentures - 349,278
Shareholders' equity:
Share capital 8,373,046 5,613,805
Equity component of convertible debentures 10,722 10,722
Deficit (5,529,267) (4,340,723)
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2,854,501 1,283,804
- --------------------------------------------------------------------------------
$ 3,337,301 $ 2,401,330
================================================================================
See accompanying notes to interim financial statements.
131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations and Deficit
Three month periods ended February 28, 2001 and February 29, 2000
(Unaudited)
================================================================================
2001 2000
- --------------------------------------------------------------------------------
Income:
Interest $ 19,363 $ 73
Fees and licenses - -
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19,363 73
Operating expenses:
General and administrative 189,525 487,033
Development 81,637 143,966
Depreciation and amortization 56,798 6,591
Interest on convertible debenture 10,031 3,895
Interest and bank charges 212 236
Research and development contributions (note 3) (238,708) -
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99,495 641,721
- --------------------------------------------------------------------------------
Loss for the period (80,132) (641,648)
Deficit accumulated during development
stage, beginning of period (5,449,135) (3,660,780)
Deficit accumulated during development
stage, end of period $ (5,529,267) $ (4,302,428)
================================================================================
Loss per share $ (0.01) $ (0.02)
================================================================================
Weighted average number of common shares
outstanding 32,871,886 25,165,635
================================================================================
See accompanying notes to interim financial statements.
131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations and Deficit
Nine month periods ended February 28, 2001 and February 29, 2000
(Unaudited)
================================================================================
2001 2000
- --------------------------------------------------------------------------------
Income:
Interest $ 83,189 $ 4,810
Fees and licenses - 6,077
- --------------------------------------------------------------------------------
83,189 10,887
Operating expenses:
General and administrative 719,065 447,841
Development 662,271 776,395
Depreciation and amortization 138,513 13,182
Interest on convertible debenture 37,881 40,000
Interest and bank charges 711 580
Research and development contributions
(note 3) (286,708) -
- --------------------------------------------------------------------------------
1,271,733 1,277,998
- --------------------------------------------------------------------------------
Loss for the period (1,188,544) (1,267,111)
Deficit accumulated during development
stage, beginning of period (4,340,723) (3,035,316)
- --------------------------------------------------------------------------------
Deficit accumulated during development
stage, end of period $ (5,529,267) $ (4,302,427)
================================================================================
Loss per share $ (0.04) $ (0.05)
================================================================================
Weighted average number of common shares
outstanding 30,422,510 23,701,773
================================================================================
See accompanying notes to interim financial statements.
131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
Three month periods ended February 28, 2001 and February 29, 2000
(Unaudited)
================================================================================
2001 2000
- --------------------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Loss for the period $ (80,132) $ (641,648)
Items not involving cash:
Interest on convertible debenture 10,031 -
Depreciation and amortization 56,798 6,591
Change in non-cash operating
working capital:
Miscellaneous receivable (161,404) (14,787)
Accounts payable and accrued liabilities (4,496) 283,031
- --------------------------------------------------------------------------------
(179,203) (366,813)
Financing activities:
Issuance of common shares - 1,630,000
Conversion of convertible debenture - (1,565,000)
Proceeds from loan payable - 276,580
- --------------------------------------------------------------------------------
- 341,580
Investing activities:
Acquisition of fixed assets (231,430) -
Investment in deferred development costs (464,582) -
- --------------------------------------------------------------------------------
(696,012) -
- --------------------------------------------------------------------------------
Decrease in cash and
cash equivalents (875,215) (25,233)
Cash and cash equivalents,
beginning of period 2,867,635 70,035
- --------------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 1,992,420 $ 44,802
================================================================================
See accompanying notes to interim financial statements.
131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
Nine month periods ended February 28, 2001 and February 29, 2000
(Unaudited)
================================================================================
2001 2000
- --------------------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Loss for the period $ (1,188,544) $ (1,267,111)
Items not involving cash:
Interest on convertible debenture 37,881 -
Depreciation and Amortization 138,513 13,182
Change in non-cash operating
working capital:
Miscellaneous receivable (88,577) 11,492
Loan receivable - (25,000)
Prepaid expenses - (700)
Accounts payable and accrued liabilities (672,607) 271,180
- --------------------------------------------------------------------------------
(1,773,334) (996,957)
Financing activities:
Issuance of common shares 2,759,241 98,750
Proceeds from loan payable - 276,580
- --------------------------------------------------------------------------------
2,759,241 375,330
Investing activities:
Acquisition of fixed assets (241,630) -
Investment in deferred development costs (464,582) -
- --------------------------------------------------------------------------------
(706,212) -
- --------------------------------------------------------------------------------
Increase (decrease) in cash and
cash equivalents 279,695 (621,627)
Cash and cash equivalents,
beginning of period 1,712,725 666,429
- --------------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 1,992,420 $ 44,802
================================================================================
See accompanying notes to interim financial statements.
131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements
Nine month periods ended February 28, 2001
(Unaudited)
================================================================================
1 Significant accounting policies:
These interim financial statements have been prepared in accordance with
accounting principles generally accepted in Canada, and include estimates
and adjustments which in the opinion of management are necessary in order
to make the financial statements not misleading. For a full description
of accounting polices which have been applied on a consistent basis in
these interim financial statements, except as described in note 2, refer
to the Company's annual financial statements.
2. Change in accounting policy:
Effective January 1, 2000, The Canadian Institute of Chartered Accountants
("CICA") changed the accounting standards relating to the accounting for
income taxes. The CICA's new standard on accounting for income taxes
adopts the liability method of accounting for future income taxes. Under
the liability method, future income tax assets and liabilities are
determined based on "temporary differences" (differences between the
accounting basis and the tax basis of the assets and liabilities), and are
measured using the currently enacted, or substantively enacted, tax rates
and laws expected to apply when these differences reverse. A valuation
allowance is recorded against any future income tax asset if it is more
likely than not that the asset will not be realized. Income tax expense
or benefit is the sum of the Company's provision for current income taxes
and the difference between the opening and ending balances of the future
income tax assets and liabilities.
Prior to adoption of this new accounting standard, income tax expense was
determined using the deferral method. Under this method, deferred income
tax expense was determined based on "timing differences" (difference
between the accounting and tax treatment of items of expense or income),
and were measured using the tax rates in effect in the year the
differences originated. Certain deferred tax assets, such as the benefit
of tax losses carried forward, were not recognized unless there was
virtual certainty that they would be realized.
The adoption of this standard has had no impact on the Company's financial
position, results of operations or cash flows.
131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements (Cont'd)
Nine month periods ended February 28, 2001
(Unaudited)
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3. Deferred Development Expenditures:
Development costs of $464,582 incurred over the nine month period June 1,
2000 to February 28, 2001 have been deferred and recorded as Deferred
Development Costs, since in the Company's view, the specific criteria
related to technical, market and financial feasibility, for deferring
these costs, have been met. These costs will be amortized on a rational
and systematic basis upon commencement of commercial production of the
Company's technology.
The Company has signed a contract with the National Research Council
Canada who is to perform certain research and development projects on the
Company's behalf. The Company is committed to pay $745,000 to June 1,
2002. The Company is eligible to be reimbursed for up to 40% of total
expenditures incurred, to a maximum of $200,000. As of February 28, 2001,
the Company has paid the National Research Council a cumulative of
$420,000 and has been reimbursed $168,000 (of which $50,000 is included in
Miscellaneous receivables) under the contract.
The Company has signed a contract with the National Research Council
Canada whereby it is eligible to receive up to $445,000 as a repayable
contribution for various research and development projects carried out by
the Company. As of February 28, 2001, the Company is entitled to receive
$148,708 under this contract of which $74,354 is included in Miscellaneous
receivables.
Repayment of these contributions begin on January 1, 2004 based on 1% of
RTICA Inc.'s (the company's wholly owned subsidiary) gross revenues.
4. Share capital:
As of February 28, 2001, the Company had 32,871,886 common shares and
2,920,250 stock options outstanding.
(a) On June 14, 2000, the Company completed a private placement of
4,033,333 special warrants at a subscription price of $0.60 each for
gross cash proceeds of $2,420,000. Each special warrant was converted
into 1 common share. Costs of arranging the private placement,
including agent's commissions, was $217,300 plus 201,667 special
compensation options granted to the Agent, exercisable at $0.60 per
option share until June 14, 2002. These options remain outstanding as
of February 28, 2001.
131615.2
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements (Cont'd)
Nine month period ended February 28, 2001
(Unaudited)
================================================================================
4. Share capital (cont'd):
(b) On October 31, 2000, 15,000 shares were issued for gross proceeds of
$3,000.
(c) On May 31, 2000, the Company completed a private placement of
2,807,500 common shares with a subscription price of U.S. $0.40 per
share for gross proceeds of U.S. $1,123,000 or $1,680,570. Costs of
arranging the private placement were $23,466. Pursuant to the terms of
the private placement, since the Company did not have a Registration
Statement filed and declared effective by the Securities and Exchange
Commission in the United States by December 31, 2000, the Company is
required to issue an additional 280,750 common shares. The issuance
of these shares will be accounted for as a stock split with no change
to the value of share capital. These shares have not been issued as of
February 28, 2001.
(d) The potential effects of the issuance of common shares under stock
option plans, as well as due to common share purchase warrants and
convertible debentures is not dilutive to the loss per share.
131615.2
RTICA Corporation
(Formerly Inzeco Holdings Inc.)
Management Discussion and Analysis
April 19, 2001
The following discussion and analysis assumes the reader is familiar with the
Company's audited consolidated financial statements for the year ending May 31,
2000 and its interim financial statements dated February 28, 2001 and the notes
to the financial statements therein. This discussion and analysis contains
statements that are not historical facts and forward looking statements which
involve risk and uncertainties that could cause actual results to differ
materially from those anticipated by management or inferred by the reader.
Overview
RTICA Corporation is commercializing RTICA brand insulation through its wholly
owned subsidiary, RTICA Inc. RTICA is a competitive, high performance insulating
material made from recycled plastic with improved industrial hygiene features
compared to conventional mineral fiber products such as fiber glass. During Q3
Fiscal 2001, the Company continued its pre-commercial activities focusing on
preparing for the commercial introduction of RTICA blowing wool in the
insulation contractor market in Canada and the United States. Initial
commercial shipments of blowing wool to contractors are expected in Q4 Fiscal
2001.
Regarding the related building codes, testing on against criteria defined in the
Loose Fill Technical Guide for Canada has confirmed that RTICA loose fill
insulation meets all key test parameters including flammability and thermal
performance. As soon as the plant is running continuously we will request an
Evaluation Report, or certification from the National Research Council
completing the building code process for blowing wool in Canada. This involves
both testing of our product and an ISO like evaluation of our manufacturing,
quality assurance and other systems. Our quality control and operating
management system are near complete. We have sufficient data to present to
local code officials on a case-by-case basis for field-testing.
Our specifications for the US will be based on the Canadian Technical Guides and
we are in the process of establishing US specifications and arranging
evaluations. We have met the key criteria for loose fill material in
development testing and have sufficient data to present to local code officials
on a case-by-case basis for field testing.
Although the scale up of our production facility in Stoney Creek is behind
schedule we are preparing for the initial commercial sales of RTICA blowing wool
before the company's year-end of May 31, 2001. Spending for the period is below
budget but we have increased the rate of expenditures over the previous two
quarters as we prepare for commercial shipments and continuous production.
The small manufacturing system being constructed at NRC-Industrial Materials
Institute in Montreal for Research and Development work is 70% complete. We
have registered our new technology with our patent attorney relating to our
advances in fiber production and loose fill product.
Our potential customers remain anxious to receive material as soon as possible.
131615.2
Financial
Operating expenses are lower as we have capitalized equipment and deferred
development expenses for the first time in anticipation of imminent sales of
product. These changes were made retroactive to the beginning of F2001.
However, spending for Q3 was about as budgeted.
The US securities registration statement was declared effective until January 9,
2001 and an additional 280,000 shares issued to the US investors as per our
contract. We have applied to the National Association of Securities Dealers for
a Market Maker in preparation for achieving our goal of trading on the Over the
Counter Bulletin Board (OTCBB) in the US as soon as possible.
The company has started receiving funds from the National Research Council
Industrial Research Assistance Program (NRC-IRAP) and continues to receive
contributions from NRC-IRAP for its R&D project.
The current level of spending on capital equipment and pre commercial costs is
expected to continue for the next quarter. The Company estimates that it has
working capital for approximately 12 months although working capital required to
support pending commercial sales may decrease cash reserves more than
anticipated.
131615.2
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.
RTICA Corporation
-------------------------------------
(Registrant)
Date April 27, 2001 By: /s/ Warren Arseneau
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*Warren Arseneau,
President
* Print the name and title of the signing officer under his signature.
131615.2