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 November 30, 2001
RTICA Corporation (formerly Inzeco Holdings Inc.)
-------------------------------------------------
(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
----- -----
[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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RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Financial statements
(Expressed in Canadian dollars)
Period ended November 30, 2001
UNAUDITED
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
November 30, 2001 and May 31, 2001
(Unaudited)
===============================================================================
November 30 May 31
- -------------------------------------------------------------------------------
Assets
Current assets:
Cash and short-term investments $ 272,464 $ 1,394,051
GST and other receivables 49,999 74,301
Prepaid expenses 8,442 8,442
----------------------------------------------------------------------------
330,905 1,476,794
Fixed assets (note 2) 375,047 435,236
Deferred development costs 1 1
Goodwill, net of accumulated amortization
of $95,756 (May 31 - $82,574) 13,182 26,364
- -------------------------------------------------------------------------------
$ 719,135 $ 1,938,395
===============================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 460,659 $ 299,369
Due to government (note 4) 241,749 200,694
Shareholders' equity:
Share capital (note 3) 8,743,768 8,743,768
Deficit (8,727,041) (7,305,436)
----------------------------------------------------------------------------
16,727 1,438,332
- --------------------------------------------------------------------------------
$ 719,135 $ 1,938,395
================================================================================
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations and Deficit
Three month periods ended November 30, 2001 and 2000
(Unaudited)
===============================================================================
2001 2000
- -------------------------------------------------------------------------------
Income:
Interest and other $ 30,787 $ 41,200
Operating expenses:
Development 230,121 162,441
Sales and marketing 65,310 68,839
Consulting 61,408 88,871
Professional fees 47,650 44,045
General and administrative 45,141 76,949
Rent and property taxes 41,648 37,768
Management fees 36,000 35,000
Amortization of fixed assets 32,788 34,266
Factory overhead 17,078 6,569
Travel 8,139 16,991
Amortization 6,591 6,591
Interest and bank charges 461 228
Interest on convertible debenture - 13,764
Patents 938 -
----------------------------------------------------------------------------
593,273 592,322
Loss for the period (562,486) (551,122)
Deficit accumulated during development
stage, beginning of period (8,164,555) (4,898,013)
- -------------------------------------------------------------------------------
Deficit accumulated during development
stage, end of period $ (8,727,041) $ (5,449,135)
===============================================================================
Loss per share $ (0.02) $ (0.02)
===============================================================================
Weighted average number of common shares
outstanding, excluding shares held in
escrow (note 3) 24,753,697 21,961,602
===============================================================================
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
Three month periods ended November 30, 2001 and 2000
(Unaudited)
===============================================================================
2001 2000
- -------------------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Loss for the period $ (562,486) $ (551,122)
Items not involving cash:
Interest on convertible debenture - 13,764
Amortization of fixed assets 32,788 34,266
Amortization of goodwill 6,591 6,591
Change in non-cash operating
working capital:
GST and other receivables (19,175) 100,944
Accounts payable and accrued liabilities 117,252 68,918
----------------------------------------------------------------------------
(425,030) (326,639)
Financing activities:
Issuance of convertible debentures - 3,000
----------------------------------------------------------------------------
- 3,000
Investing activities:
Purchase of fixed assets - -
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- -
Change in cash and cash equivalents (425,030) (323,639)
Cash and cash equivalents, start of period 697,494 3,191,274
- -------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 272,464 $ 2,867,635
===============================================================================
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations and Deficit
Six month periods ended November 30, 2001 and 2000, and cumulative from
inception
(Unaudited)
===============================================================================================================
Cumulative
Period from
June 13, 1991
(inception) to
November 30,
2001 2000 2001
Income:
Interest $ 37,269 $ 63,826 $ 204,793
Fees and licenses - - 622,482
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37,269 63,826 827,275
Operating expenses:
Development 674,900 284,954 3,332,200
Consulting 168,137 166,532 1,595,325
Sales and marketing 124,338 113,031 507,893
Professional fees 123,914 179,272 1,033,285
Management fees 78,000 85,000 951,386
Rent and property taxes 76,510 68,893 300,052
General and administrative 76,469 126,881 710,135
Amortization of fixed assets 65,576 68,533 238,829
Factory overhead 35,214 12,255 88,280
Travel 20,682 32,399 377,007
Amortization 13,182 13,182 95,756
Interest and bank charges 1,014 499 137,110
Interest on convertible debenture - 20,807 141,834
Patents 938 - 45,224
------------------------------------------------------------------------------------------------------------
1,458,874 1,172,238 9,554,316
- ---------------------------------------------------------------------------------------------------------------
Loss for the period (1,421,605) (1,108,412) (8,727,041)
Deficit accumulated during development
stage, beginning of period (7,305,436) (4,340,723) -
- ---------------------------------------------------------------------------------------------------------------
Deficit accumulated during development
stage, end of period $ (8,727,041) $ (5,449,135) $ (8,727,041)
===============================================================================================================
Loss per share $ (.06) $ (.05) $ -
===============================================================================================================
Weighted average number of common shares
outstanding, excluding shares held
In escrow shares (note 3) 24,753,697 20,576,571 -
See accompanying notes to interim financial statements.
RTICA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
Six month periods ended November 30, 2001 and 2000, and cumulative from
inception
(Unaudited)
===============================================================================================================
Cumulative
Period from
June 13, 1991
(inception) to
November 30,
2001 2000 2001
Cash provided by (used in):
Operating activities:
Loss for the period $ (1,421,605) $ (1,108,412) $ (8,727,041)
Items not involving cash:
Interest on convertible debenture - 20,807 115,970
Amortization of fixed assets 65,576 68,533 238,829
Amortization of goodwill 13,182 13,182 95,756
Interest expense on converted loan - - 96,000
Expenses settled by issuance
of common shares - - 431,388
Foreign exchange gain 1,250 - (25,621)
Change in non-cash operating
working capital:
GST and other receivables 24,302 72,827 (49,999)
Prepaid expenses - - (8,442)
Accounts payable and accrued liabilities 161,290 (661,068) 379,314
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(1,156,005) (1,594,131) (7,453,846)
Financing activities:
Due to government 41,055 - 241,749
Issuance of convertible debentures - - 1,860,000
Issuance of common shares - 2,205,700 2,272,767
Issuance of special warrants - - 2,870,659
Exercise of share purchase warrants - 553,541 553,541
Proceeds from loan payable - - 254,000
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41,055 2,759,241 8,052,716
Investing activities:
Purchase of fixed assets (5,387) (10,200) (613,876)
Deferred development costs - - (1)
Cash acquired on reverse takeover - - 261,850
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(5,387) (10,200) (352,027)
Foreign exchange gains held on foreign currency (1,250) - 25,621
- ---------------------------------------------------------------------------------------------------------------
Change in cash and cash equivalents (1,121,587) 1,154,910 272,464
Cash and cash equivalents, start of period 1,394,051 1,712,725 -
- ---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 272,464 $ 2,867,635 $ 272,464
===============================================================================================================
See accompanying notes to interim financial statements.
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements
Six month period ended November 30, 2001
(Unaudited)
================================================================================
1. Significant accounting policies:
These interim financial statements have been prepared in accordance with
accounting principles generally accepted in Canada ("Canadian GAAP"), and
include estimates and adjustments which in the opinion of management are
necessary in order to make the financial statements not misleading
Canadian GAAP differs in certain respects with those principles and
practices that the Company would have followed had its financial statements
been prepared in accordance with accounting principles and practices
generally accepted in the United States. For a full description of
accounting polices which have been applied on a consistent basis in these
interim financial statements, refer to the Company's annual financial
statements.
2. Fixed Assets:
===================================================================================================
Accumulated Net Book Net Book
Cost Amortization Value Value
November 30 May 31
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Machinery and equipment $ 530,336 $ 195,899 $ 334,437 $ 409,498
Furniture 11,451 4,690 6,761 8,288
Vehicles 15,848 7,088 8,760 5,897
Computer hardware 56,241 31,152 25,089 11,553
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$ 613,876 $ 238,829 $ 375,047 $ 435,236
===================================================================================================
3. Share capital:
There were no common shares issued during the period. As of November 30,
2001, the Company had 34,052,636 common shares and 3,240,250 Company stock
options outstanding. In addition, there are 201,667 compensation options
outstanding exercisable at $0.60 per share and expiring on June 14, 2002,
issued in connection with a private placement in June 2000. During the
period, the company granted 125,000 options pursuant to the stock option
plan, exercisable at $0.70 and expiring on July 31, 2004. There were NIL
Company stock options which expired during the period.
Using the treasury stock method, the weighted average number of common
shares outstanding used in determining basic earnings per share excludes
9,298,939 of escrowed shares (2000: 9,845,939).
RTICA CORPORATION
(FORMERLY INZECO HOLDINGS INC.)
(A DEVELOPMENT STAGE COMPANY)
Notes to Interim Consolidated Financial Statements
Six month period ended November 30, 2001
(Unaudited)
================================================================================
4. Due to government:
The company has signed a contract with the National Research Council of
Canada, whereby the Company is eligible to receive up to $445,000 as a
repayable contribution for various projects carried out by the Company.
Repayment of these contributions begins on January 1, 2004 based on 1% of
the Company's gross revenue up to a maximum of $667,500.
5. Related party transactions:
Amounts expended during the six month period ended November 30, 2001 were
as follows:
===========================================================================
Type of service Nature of relationship November 30, 2001
---------------------------------------------------------------------------
Sales and marketing Shareholder and officer $ 91,328
Management fees Shareholder, director and officer 78,000
Development charges Shareholders and director 172,887
Consulting Shareholder and director 4,350
Professional fees Shareholder, director and officer 17,727
===========================================================================
6. Comparative figures:
Certain comparative figures have been reclassified to conform to
presentation adopted in the current year.
DESCRIPTION OF BUSINESS
RTICA Corporation is involved in the commercial development of patented
technology of insulation made from polyethylene terephthalate. RTICA insulation
is made in a one step process that creates fibers and a high performance
insulating structure. Multiple filaments of molten polymer are introduced into
a high-speed airflow through proprietary dies to create thin fibers that become
entangled to form a veil. These fibers are then further processed to form
batts, loose fill (blow in) material, or other products.
The company operates a research and testing facility at 999 Barton Street,
Stoney Creek Ontario, L8E 5H4. The Company manages its own research,
development and product development activities. Certain research projects are
contracted to the National Research Council of Canada, Industrial Materials
Institute in Boucherville, Quebec. Technologically, the Company's priority is
to advance RTICA insulation material and process for full scale commercial
production.
The Company has two wholly owned subsidiaries; however, the entity is managed as
a consolidated entity.
DISCUSSIONS OF OPERATING RESULTS AND FINANCIAL CONDITION
Consolidated assets of RTICA Corporation during the interim period ended
November 30, 2001 decreased from $1,164,369 at August 31, 2001 to $719,135.
Cash and short-term investments decreased from $697,494 at August 31, 2001, to
$272,464 at November 30, 2001.
During the three months ended November 30, 2001, there were no capital stock
transactions
RTICA has generated NIL revenues from the sale of product during the quarter
ended November 30, 2001; interest income of $30,787 was earned. Year to date,
interest income was $37,269 versus $63,826.
Operating expenses during the quarter ended November 30, 2001 of $593,273 were
comparable with the prior period of $593,322. Year to date, operating expenses
were $1,458,874 versus $1,172,238 in the prior period. The increase over the
prior year was the result of increased technology development initiatives.
ACCOUNTING TREATMENT FOR DEVELOPMENT EXPENDITURES
RTICA has adopted generally accepted accounting pronouncements for development
costs requiring that these items be expensed in the period incurred until
technical feasibility has been obtained, adequate resources exist to market the
technologies, and recoverability of costs incurred is assured, at which time
development costs are capitalized.
During the three month period ended November 30, 2001, RTICA expended $230,121
on development, $61,408 on consulting fees, $65,310 on sales and marketing
initiatives (compares to $162,441, $88,871 and $68,839 respectively).
Besides development costs, no capital assets or other intangible assets have
been written off during the year. Capital assets indicated on the balance sheet
include machinery and equipment, computer hardware, office furniture and
vehicles.
RELATED PARTY AGREEMENTS
The Company has entered into consulting agreements with certain directors,
officers and shareholders for services, as described in schedule B. Due to the
nature of the company, the use of consultant agreements limits the Company's
commitments which would arise in the case of employee contracts.
MATERIAL COMMITMENTS
On June 21, 1999, the Company signed a contract with the National Research
Council of Canada. The Company is committed to pay NRC $745,000 to June 2002.
The Company is eligible to be reimbursed up to 40% of total expenditures
incurred, to a maximum of $200,000.
On November 1, 2000, the Company signed a contract with the NRC whereby the
Company is eligible to receive up to $445,000 as a repayable contribution for
various research and development projects carried out by the Company. Repayment
of these contributions begins on January 1, 2004 based on 1% of the Company's
gross revenues up to a maximum of $667,500. The Company is required to
contribute two-thirds of the total cost of the work, otherwise its
reimbursements will be proportionately reduced.
INVESTOR RELATIONS ARRANGEMENTS
The Company has entered into an agreement with First Canadian Capital
Corporation for corporate communications and investor relations, including
communicating with present and potential shareholders and media, relating to the
affairs of the Company. During the period ended November 30, 2001, this
consultant received $12,000 for fees and expenses (year to date $24,000).
OTHER MATERIAL ITEMS
During the quarter ended November 30, 2001, there have been:
a) no material legal proceedings against the Company
b) except as described elsewhere, no contingent liabilities
c) no defaults under debt or other contractual obligations
d) no breach of corporate, securities or other laws
e) no regulatory approvals required
f) no significant management changes
g) no special resolutions passed by shareholders and not otherwise
communicated to appropriate regulatory bodies
SUBSEQUENT EVENTS
Subsequent to November 30, 2001, there have been no significant events requiring
disclosure
FINANCINGS, PRINCIPAL PURPOSES and MILESTONES
Not applicable
LIQUIDITY AND SOLVENCY
As at November 30, 2001, the Company has current assets of $330,905 and current
liabilities of totaling $460,659. As stated in note 1 to the audited financial
statements dated May 31, 2001, the ability of the Company to continue as a going
concern is depending upon the ongoing support of its shareholders, the
attainment of financing necessary to complete the technology and begin
commercial production and the achievement of profitable operations from the
commercial production and licensing of the insulating products and sale of
licensing rights.
The Company plans to enter into private placement and/or other financing
arrangements during the next fiscal year in order to finance continued
development of Company technologies and commence commercial production. As of
the date thereof, no arrangements have been consummated for such financing
activities.
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
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(Registrant)
Date January 30, 2002 By:/s/ Warren Arseneau
---------------- ------------------------------------
*Warren Arseneau,
President
* Print the name and title of the signing officer under his signature.