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: September 30, 2000.
____ Transition Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the
Transition Period From ____ to ____
Commission file number: 333-72405
R-TEC TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-3615979
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
37 Ironica Road, Flanders, NJ 07836
(Address of principal executive offices) (Zip Code)
(973) 252-5233
(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. No.
Applicable only to corporate issuers
As of November 10, 2000, the Company had outstanding 3,198,360 shares of
its common stock.
<PAGE>
Table of Contents to Form 10QSB
Part I - FINANCIAL INFORMATION Page
Item 1. Financial Statements (unaudited)
Balance Sheet September 30, 2000.......................4
Statements of Operations - Six Months
Ended September 30, 1999 and September 30, 2000........5
Statements of Cash Flows - Six Months
Ended September 30, 1999 and September 30, 2000........6
Notes to Financial Statements.........................10
Item 2. Management's Discussion and Analysis or Plan
of Operation..........................................11
Part II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds...........None
Item 6. Exhibits and Reports on Form 8-K....................None
Signatures....................................................17
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
R-TEC TECHNOLOGIES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
See accompanying notes to financial statements.
R-TEC TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
ASSETS
September 30, 2000
<S> <C>
Current assets
Cash and cash equivalents $ 40,607
Accounts receivable 20,617
Inventory 53,005
Prepaid expenses 12,083
-------------------
Total current assets 126,312
Equipment, net 23,332
Other assets
Patent, net 794,639
Deposits 5,500
-------------------
Total other assets 800,139
-------------------
Total Assets $ 949,783
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenss $ 21,655
Notes payable 35,000
-------------------
Total current liabilities $ 56,655
Commitments and contingencies (Note 3)
Stockholders' equity
Common stock, par value $.00001 per share, 50,000,000
shares authorized, 3,198,360 shares issued and
outstanding 32
Additional paid-in capital 2,102,828
Accumulated deficit (1,209,732)
-------------------
Total stockholders' equity 893,128
-------------------
Total Liabilities and Stockholders' Equity $ 949,783
</TABLE>
<PAGE>
R-TEC TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Three-Months Ended Nine-Months Ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenue $ 38,515 $ - $ 57,476 $ -
Cost of revenues 9,881 - 20,914 -
--------------- --------------- -------------- --------------
Gross profit 28,634 - 36,562 -
Selling, general and administrative expenses 170,323 101,264 515,984 302,938
---------------- --------------- ---------------- -------------
Loss from operations (141,689) (101,264) (479,422) (302,938)
Other income (expenses)
Other income 15,161 - 20,332 -
Interest expense (744) (12,000) (7,779) (36,000)
---------------- --------------- ----------------
Total other income (expenses) 14,417 (12,000) 12,553 (36,000)
---------------- --------------- ----------------
Net loss $ (127,272) $ (113,264) $ (466,869) $ (338,938)
Net loss per common share $ (.04) $ (.04) $ (.19) $ (.12)
Weighted average common shares outstanding 3,198,360 2,916,666 2,502,876 2,916,666
</TABLE>
See accompanying notes to financial statements
<PAGE>
R-TEC TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) In Cash and Cash Equivalents
(Unaudited)
<TABLE>
Nine-Months Ended September30,
________________________________
2000 1999
-------------- ----------------
<S> <C> <C>
Cash flows from operating activities
Net loss $ (466,869) $ (338,938)
Adjustments to reconcile net loss to net cash used in operating activities:
Unreimbursed expenses contributed to capital by shareholders 1,584 14,500
Stock issued for services 3,000 -
Salaries contributed by stockholders 26,001 -
Depreciation and amortization 44,038 -
Interest expense - amortization of discount on note payable - 36,000
Increase in accounts receivable (20,617) -
Increase in inventory (53,005) -
Increase in prepaid assets (12,083) -
Increase in deposits (3,500) (1,000)
Increase (decrease) in accounts payable and accrued expenses (110,649) 95,044
--------------- ------------------
Total adjustments (125,231) 144,544
--------------- ------------------
Net cash used in operating activities (592,100) (194,394)
Cash flows from investing activities
Patent costs (3,700) (53,585)
Purchase of equipment (6,706) (10,083)
Net cash used in investing activities (10,406) (63,668)
---------------- ------------------
Cash flows from financing activities
Decrease (increase) in deferred offering costs 25,526 (297,926)
Proceeds from notes payable - 80,000
Repayments of notes payable (465,000) -
Increase (decrease) in due to stockholders (252,416) 264,035
Proceeds from sale of stock 1,334,555 -
Capital contributed by stockholders - 169,003
Net cash provided by financing activities 642,665 215,112
--------------- ----------------
Net increase (decrease) in cash and cash equivalents 40,159 (42,950)
Cash and cash equivalents, beginning of period 448 43,500
--------------- ----------------
Cash and cash equivalents, end of period $ 40,607 $ 550
Supplemental disclosures of cash flow information --------------- ----------------
Cash paid during the period for interest $ 4,750 $ -
Supplemental disclosures of noncash investing and financing activities:
Issuance of common stock for repayment of debt 30,000 -
Issuance of common stock in satisfaction of obligation 428,000 -
</TABLE>
<PAGE>
R-TEC TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
The information presented herein as of September 30, 2000, and for the
three and nine-months ended September 30, 2000 and 1999, is unaudited.
(1) Basis of Presentation:
The accompanying financial statements of R-Tec Technologies, Inc. and
subsidiary (the Company) have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal required adjustments)
considered necessary for a fair presentation have been included.
Prior to April 1, 2000, the Company was considered a development stage
enterprise.
Operating results for the three and nine-month periods ended September 30,
2000, are not necessarily indicative of the results that may be expected for the
year ending December 31, 2000. For further information, refer to the financial
statements and footnotes included in the Company's annual report of Form 10-KSB
for the year ended December 31, 1999.
() Stock Offering:
During 1999 and 2000, the Company offered up to 1,250,000 shares of its
common stock for sale at $8.00 per share. The Company sold 166,819 shares in
2000 and the offering was closed effective June 27, 2000.
The Company has filed a proposed offering of up to 1,000,000 shares of its
common stock for sale at $3.50 per share. There is no assurance the offering
will become effective. Should the offering become effective, there is no
assurance it will be successful.
() Commitments and Contingencies:
On April 14, 1999, the Company adopted a stock bonus plan and reserved
1,000,000 shares of its authorized but unissued common stock under this plan. In
March 2000, the Company issued stock options for 190,000 shares at $8.00 per
share to various employees and consultants. As of September 30, 2000, no options
had been exercised.
In connection with the public offering as described in Note 2, the Company
entered into an agreement with a placement agent contingent on the Company
raising at least $1 million. The Company agreed to pay the placement agent 9% of
the amount raised plus 2.25% of the amount raised for nonaccountable expenses
and issue warrants to purchase 12,500 shares at $13.20 per share on a pro rata
basis for each $1 million raised. The Company canceled the agreement and paid
$50,000 during the second quarter of 2000.
The Company is the defendant and plaintiff in a lawsuit with a vendor. The
vendor alleges unpaid amounts due by the Company for services rendered. The
Company has countersued for breech of contract and damages. The Company believes
the vendor's suit is without merit and is vigorously defending its position,
however there is no guarantee of a favorable outcome. The Company has not
recorded any potential liability from this matter in the accompanying financial
statements. () Patent Acquisition and Notes Payable:
The Company purchased a patent from a related party on December 1, 1998,
the terms of which were substantially modified in May 1999 and September 1999.
In February 2000, the Company issued 100,000 shares of the Company's common
stock and paid $450,000 in satisfaction of amounts owed under the purchase
agreement.
<PAGE>
In June 1999, the Company borrowed $60,000. The promissory note is due in
full within thirty days of $2 million being raised in the stock offering
described in Note 2; or if $2 million is not raised the note is due in full on
or before November 15, 2000. Interest at 8.5% is due monthly. As of
September 30, 2000, $15,000 in principal had been paid by the Company.
Additionally, 5,000 shares of common stock have been issued by the Company in
satisfaction of $20,000 in principal. No interest has been paid on the note.
In June 1999, the Company also borrowed $20,000. The promissory note plus
interest at 8.5% is due in full within thirty days of the completion of the
stock offering described in Note 2 or is convertible into unregistered common
stock at $4.00 per share at the option of the holder. As of September 30, 2000,
3,500 shares of common stock have been issued by the Company in satisfaction of
$10,000 in principal. No interest has been paid on the note.
(5) Net Loss Per Common Share:
Net loss per common share is computed in accordance with the requirements
of Statement of Financial Accounting Standards No. 128 (SFAS 128). SFAS 128
requires net loss per share information to be computed using a simple weighted
average of common shares outstanding during the periods presented.
(6) Segments:
The Company has two segments, gas-detecting paints and household products.
The following reflects financial information about the segments as of September
30, 2000:
<TABLE>
<S> <C> <C>
Paints Household products
___________________ __________________
Total assets $ 855,333 $ 94,450
___________________ ___________________
Revenues $ - $ 57,476
___________________ ___________________
Net loss from operations $ (448,180) $ (18,689)
___________________ ___________________
</TABLE>
<PAGE>
R-TEC TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
The information presented herein as of June 30, 2000, and for the three and
six-months ended September 30, 2000 and 1999, is unaudited.
(1) Basis of Presentation:
The accompanying financial statements of R-Tec Technologies, Inc. and subsidiary
(the Company) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal required adjustments)
considered necessary for a fair presentation have been included.
Prior to April 1, 2000, the Company was considered a development stage
enterprise.
Operating results for the three and six-month periods ended June 30, 2000, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. For further information, refer to the financial
statements and footnotes included in the Company's annual report of Form 10-KSB
for the year ended December 31, 1999.
(2) Stock Offering:
During 1999 and 2000, the Company offered up to 1,250,000 shares of its common
stock for sale at $8.00 per share. The Company sold 166,819 shares in 2000 and
the offering was closed effective June 27, 2000.
(3) Commitments and Contingencies:
On April 14, 1999, the Company adopted a stock bonus plan and reserved 1,000,000
shares of its authorized but unissued common stock under this plan. In March
2000, the Company issued stock options for 190,000 shares at $8.00 per share to
various employees and consultants. As of June 30, 2000, no options had been
exercised.
In connection with the public offering as described in Note 2, the Company
entered into an agreement with a placement agent contingent on the Company
raising at least $1 million. The Company agreed to pay the placement agent 9% of
the amount raised plus 2.25% of the amount raised for nonaccountable expenses
and issue warrants to purchase 12,500 shares at $13.20 per share on a pro rata
basis for each $1 million raised. The Company canceled the agreement and paid
$50,000 during the second quarter of 2000.
The Company is the defendant and counter-plaintiff in a lawsuit with a vendor.
The vendor alleges unpaid amounts due by the Company for services rendered. The
Company has countersued for breech of contract and damages. The Company believes
the vendor's suit is without merit and is vigorously defending its position,
however there is no guarantee of a favorable outcome. The Company has not
recorded any potential liability from this matter in the accompanying financial
statements. 7
<PAGE>
R-TEC TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(4) Patent Acquisition and Notes Payable:
The Company purchased a patent from a related party on December 1, 1998, the
terms of which were substantially modified in May 1999 and September 1999. In
February 2000, the Company issued 100,000 shares of the Company's common stock
and paid $450,000 in satisfaction of amounts owed under the purchase agreement.
In June 1999, the Company borrowed $60,000. The promissory note is due in full
within thirty days of $2 million being raised in the stock offering described in
Note 2; or if $2 million is not raised the note is due in full on or before
November 15, 2000. Interest at 8.5% is due monthly. As of June 30, 2000, $15,000
in principal had been paid by the Company. Additionally, 5,000 shares of common
stock have been issued by the Company in satisfaction of $20,000 in principal.
No interest has been paid on the note.
In June 1999, the Company also borrowed $20,000. The promissory note plus
interest at 8.5% is due in full within thirty days of the completion of the
stock offering described in Note 2 or is convertible into unregistered common
stock at $4.00 per share at the option of the holder. As of June 30, 2000, 3,500
shares of common stock have been issued by the Company in satisfaction of
$10,000 in principal. No interest has been paid on the note.
(5) Net Loss Per Common Share:
Net loss per common share is computed in accordance with the requirements of
Statement of Financial Accounting Standards No. 128 (SFAS 128). SFAS 128
requires net loss per share information to be computed using a simple weighted
average of common shares outstanding during the periods presented.
(6) Segments:
The Company has two segments, gas-detecting paints and household products. The
following reflects financial information about the segments as of 6/30/00:
<TABLE>
<S> <C> <C>
Paints Household products
------------------- -------------------
Total assets $ 1,024,066 $ 71,473
=================== ===================
Revenues $ - $ 18,961
=================== ===================
Net loss from operations $ (312,977) $ (26,621)
=================== ===================
</TABLE>
<PAGE>
Item 2. Management Discussion and Analysis or Plan of Operation
OVERVIEW
During 1999, R-Tec was a development stage company engaged in the
acquisition and development of patented technology, the development of a
business plan, arranging for potential suppliers and distribution channels and
raising capital. From inception through December 31, 1999, the Company issued
2,916,666 shares of stock to its founders. The Company's registration statement
was effective November 12, 1999, and sales commenced on January 7, 2000. R-Tec's
initial public ofering is for 1,250,000 shares of common stock to raise a
maximum of $10,000,000. Since sales commenced, the Company sold 166,819 shares
and raised $1,334,555. The offering closed in April, 2000.
On October 27, 2000, we filed form SB-2 to register 1,000,000 of its common
shares at an anticipated sale price of $3.50 per share. The proceeds of the
offering will be used to pay research and development expenses, salaries,
marketing and general administrative expenses. There is no assurance that this
offering will be successful. Should this offering prove unsuccessful, it would
be necessary for us to obtain financing from some other source in order to
continue operation.
R-Tec has operated at a loss from inception, incurring a loss of $127,272
during the three months ended September 30, 2000. In order to achieve profitable
operations, we will have to successfully manufacture, distribute and
commercialize our initial products. We will also have to secure all intellectual
property rights. For these reasons it is difficult for R-Tec to forecast our
revenue or earnings accurately. We believe that period-to-period comparisons of
our operating results may not be meaningful. As a result of our extremely
limited operating history, we do not have historical financial data for a
significant number of periods on which to base planned operating expenses. Our
expense levels are based upon our expectations concerning future revenue. Thus,
quarterly revenue and results of operation are difficult to project.
PLAN OF OPERATION
Two-Phase Business Plan
Our business plan is based on implementing our strategy in two phases:
o Phase 1 - Establish Manufacturing and Distribution Relationships and
Begin Distribution of Three Initial Products, and
o Phase 2 - Expand Product Lines.
The key elements of each phase of our strategy are described below:
Phase 1 - Establish Manufacturing and Distribution Relationships
and Begin Distribution of the Three Initial Products
R-Tec's primary strategic goals for Phase 1 are:
o The selection of appropriate manufacturing and distribution partners.
o The commencement of commercial distribution of our reactive paint
products.
o R-Tect 22 freon leak detecting coating.
o R-Tect 12 freon leak detecting coating.
o R-Tect carbon reactive paint. Development of this product is expected
to be complete by December, 2000 at an additional cost of $50,000.
o During Phase 1, we will incur significant operating expenses.
o During Phase 1 R-Tec will require manufacturing facilities, office
space and warehouse space. These facilities may be purchased or leased
and the manufacturing may be outsourced. We anticipate that we will
remain in our existing office space for the coming year but will be
required to expend additional funds on manufacturing and on warehouse
space.
<PAGE>
Manufacturing and Distribution Relationships.
One of R-Tec's Phase 1 goals is to establish beneficial relationships with
strategic manufacturing and distribution partners. With this strategy, we hope
to eliminate the need to build a large and costly production and sales
infrastructure and to benefit from the inclusion of our products in our
partners' marketing efforts.
R-Tec has entered into a manufacturing contract with Anscott Chemical
Industries, Inc., a nationally recognized manufacturer of chemical products
located in Wayne, New Jersey.
Anscott will be the exclusive manufacturer of our leak detection products;
R-Tect 12, R-Tect 22, and R-Tect carbon dioxide reactive paints. The agreement
is for five years. The rights granted to Anscott under the agreement are limited
to these three specified products and to the United States. Anscott's
exclusivity rights with respect to R-Tect carbon dioxide reactive paint is
further limited to the dry cleaning industry. Anscott will manufacture our
products based on purchase orders received from R-Tec. R-Tec intends to locate a
quality control technician employed by us at Anscott's offices, but there is no
provision in our contract with Anscott which requires Anscott to accept such
supervision.
The primary distributor of our protective coating products, Motors &
Armatures, has placed an initial order for 5,000 kits of R-Tect 22 reactive
paint at $44.00 per kit. We believe that Motors & Armatures will distribute
R-Tect kits for R-Tect 12, R-Tect 22, and later R-Tect 134A reactive paints,
primarily to organizations that will in turn sell them to air conditioning or
refrigeration contractors. The original anticipated delivery date of R-Tect 22
to Motors & Armatures of October 31, 1999, was extended to February, 2000. That
date has been extended again until after we commence operations. Motors &
Armatures has advised us that it intends to create artwork for our products
which it will be distributing and intends to hire an exclusive representative to
work on the R-Tect product line. This specialist will travel with Motors &
Armatures' sales representatives to train and educate its clients in the use of
our products. Motors & Armatures has orally represented to us that it has
allocated $156,000 for advertising in the first year for R-Tec's products and
that it will also provide a direct mail campaign to reinforce the advertising
program.
In June, 2000, we began sales of our Ripefully Yours product, which delays
the decay of refrigerated fuits and vegetables. We received minimal revenues
($38,515) from the sale of Ripefully Yours in the third quarter of this year. We
anticipate that the majority of the Company's revenues will be from the sale of
Ripefully Yours.
<PAGE>
Motors & Armatures has proposed a six month test marketing program to
determine the volume level of sales. It intends to promote R-Tec's products as
both, leak detectors, and as preventative maintenance products.
R-Tec's Efforts To Expand Commercial Use of Initial Products.
During Phase 1, R-Tec also intends to pursue direct sales to end-users and
the original equipment manufacturing market. We will also complete research and
development of our remaining initial products and will pursue marketing of these
products. Potential users include public utility companies, automotive, marine,
aviation, aerospace companies, and commercial real estate owners and developers.
We have identified government agencies and municipalities where our products can
reduce maintenance, overhead and provide another means to detect harmful gases.
We also intend to pursue licensing arrangements with select end-users.
We believe a marketing opportunity will also develop with insurance
companies that underwrite risk associated with gas explosions. R-Tec will
introduce its products to these insurance companies and will attempt to persuade
them either to mandate the use of R-Tec's reactive paint products or to provide
financial incentives, such as discounted insurance rates, to companies that
utilize R-Tec's detection products.
We believe that a marketing opportunity will develop for the use of R-Tec's
reactive paint products to detect natural gas and propane leaks. Specifically,
during the installation of a gas pipe, the installer could apply our paint to
pipe joints. Property owners could also apply our reactive paint to pipe joints
in existing structures. If natural gas or propane leaks through a stress crack,
the paint is designed to change colors, indicating a leak, and warning anyone
who examines the pipe joint.
We also believe a market may exist for our reactive paint products in
chemical plants. Chemical plants utilizing our reactive paint products could
reduce the chance of significant damage caused by a toxic chemical or gas leak
by applying our products to pipe joints in their manufacturing facilities.
We also believe our reactive paint products could be used in the aerospace
and aviation markets. We believe that aircraft utilizing our reactive paint
products could possibly avert disasters caused by gas and fluid leaks if, during
a routine inspection, a mechanic notes a change in color of the paints applied
to pipe joints aboard the aircraft. Should there be a leak, it could be detected
and repaired prior to the aircraft taking off.
It is possible, though unlikely, that our paint could be caused to change
color due to exposure to some other substances or gas from another source. A
false positive reading due to ambient gases is minimized by the use of a clear
polymer coating, which encases each of the R-Tec paints. When properly applied,
the paint's impermeable coating serves to ensure that only gas leaking from the
protected source can contact the reactive paint and therefore cause a positive
reading. None of the testing conducted to date has indicated any variance of
responsiveness of R-Tec's products to geographic area or weather conditions,
such as humidity, air pressure or smog level.
<PAGE>
Phase 2-Expand Product Lines and Expand Internal Sales
R-Tec does not anticipate entering Phase 2 in our first year of operations.
R-Tec anticipates that it will add product lines in Phase 2 which will be
marketed to the users identified in Phase 1. R-Tec will continue to pursue new
business with public utilities by developing new products which address specific
needs with the industry.
The speed with which we can develop, introduce, test market and expand
sales of the additions to the R-Tec product line will determine the timing of
the realization of our Phase 2 goals. This phase will be characterized by new
product introductions, test marketing, expanded sales efforts, and industry
driven mandates for the use of R-Tec products.
During Phase 2, in addition to manufacturing facilities, office space and
warehouse space required during Phase 1, R-Tec will require laboratory
facilities for product development.
During Phase 2, R-Tec will develop additional gas detection coating
products.
o R-Tect ethylene detector. The estimated development time is 90 days at an
approximate cost of $70,000. o R-Tect propane reactive paint. The estimated
development time is 90 days at a cost of approximately $100,000. o R-Tect
natural gas reactive paint. The estimated development time is 90 days at an
estimated development cost of approximately $200,000. o R-Tect SF6 detector. The
estimated development time is 90 days at an estimated development cost of
approximately $200,000. o R-Tect 134A, a freon detecting coating designed for
the automotive, air conditioning and refrigerator contractors market. The
estimated development time is 180 days at an approximate cost of $55,000. o
R-Tect 410, a freon detecting coating designed for the residential and
commercial air conditioning and refrigerator contractors market. The estimated
development time is 180 days at an approximate cost of $55,000.
R-Tec intends to initially develop only R-Tect propane reactive paint during
this Phase. Further funding will be necessary to develop additional products.
Other Potential Applications Of R-Tec's Detection Technology.
Following the development of the products discussed above, R-Tec intends to
develop coatings which detect the following gases. The development time and cost
for each project has not been estimated by R-Tec. R-Tec's ability to develop
additional gas detection products will be dependent upon the proceeds from it
offering and the amount of funds available, if any, from operations.
Ammonia Chlorine Methane
Butane Ethane Methyl Mercaptan
Carbon Monoxide Isobutane Sulphur Hexaflouride
Acetylene Carbon Sulfide 2-Methylpropene
Acetyl Fluoride Carbon Tetrafluoride Nitric Oxide
Allene Hexafluoropropane Nitrogen
Arsine Hydrogen Nitrous Oxide
Boron Trichloride Hydrogen Chloride Other Refrigerants
Boron Trifluoride Isobutylene Phosgene
Bromotrifluoromethane Methyl Ether Propene
1,3-Butadiene Methanethiol Sulphur Dioxide
2-Methylpropane Trimthylamines
We also intend to research the feasibility of using a small strip across the
top of wrapped chicken parts and meat as a means of measuring freshness. This
fine lined strip would be the color green, indicating the chicken is fresh. If
this strip turns red, this would indicate that the chicken is diseased or
tainted with salmonella. This would alert both the retailer and the consumer to
the presence of a disease that might not have been detected without this safety
strip.
We plan to work with utility companies on the detection of SF6 gas. This gas is
used as an insulator in transformers and takes the place of harmful PCBs. When
these gases leak out of a transformer, they may cause the electricity passing
through the gas to spark and cause an explosion. Currently, the only way the
utility company can detect a leak is when the transformer explodes and it must
be replaced at great cost to utility companies and the consumer. R-Tec proposes
that when a transformer is assembled, the utility company place a strip of our
paint around the top of the transformer so that utility workers will be able to
easily detect a change in the color of a transformer hanging on a utility pole,
if a leak occurs.
<PAGE>
Blood Gases
R-Tec believes there may be an interest in the use of our technology in the
field of blood gases. Blood travels from the heart to the lungs, liver, kidneys
and other major organs. During this trip it is carrying a percentage of oxygen,
carbon dioxide and certain other metabolic gases. However, when there is a
restriction in this flow, possibly due to coronary artery disease, the heart and
lungs are unable to supply the proper amount of oxygen to the blood. Therefore,
the oxygen level begins to decrease and the carbon dioxide level will increase.
R-Tec believes that by detecting gas on a molecular basis at the rate of 10
to the 64th power, the medical field may have the ability to detect a change in
the amount of carbon dioxide in the blood. This may help patients with a family
history or high risk of heart attacks or strokes to possibly know if they have a
serious medical condition. For example, a person might be able to rub some gel
on their wrist once a month. This gel would consist of a form of R-Tec's product
and dimethyl sulfoxide, a substance that carries medicine into the body. If the
blood flowing through the arterial arteries has a higher than normal level of
carbon dioxide, which is indicative of a restriction of blood flow and oxygen,
the gel would turn from one color to another, possibly warning the individual
that they may be within weeks of suffering a stroke or heart attack. This
pre-warning system would allow a person to seek medical attention and relieve
the arterial restriction before suffering the damage caused by a heart attack or
stroke. Since smog does not affect a person's arterial blood gas level because
the level of these gases is maintained internally, there is little likelihood of
external factors affecting the potential product.
FORWARD-LOOKING STATEMENTS
All statements other than statements of historical fact in this report are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995, and are based on management's current expectations of the
Company's near term results, based on current information available and
pertaining to the Company. The Company assumes no obligation to update publicly
any forward-looking statement. Actual results may differ materially from those
projected in the forward-looking statements. These forward-looking statements
involve risks and uncertainties, including, but not limited to, the following:
demand for the Company's protective coatings and preservative product;
production and pricing levels of important raw materials; difficulties or delays
in the development, production, testing and marketing of products; and product
margins and customer product acceptance.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K....................None
(a) Exhibits
Exhibit Description Page
(2) Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession.........None
(4) Instruments defining the Rights of
Security Holders...............................None
(10) Material Contracts...............................None
(11) Statement re: Computation of Per Share
Earnings......................................Note 5,
Financial
Statements
(15) Letter re: Unaudited Interim Financial
Information...................................None
(18) Letter re: Change in Accounting Principles......None
(19) Report Furnished to Security Holders............None
(22) Published Report re: Matters Submitted
to Vote of Security Holders...................None
(23) Consents of Experts and Counsel.................None
(24) Power of Attorney...............................None
*(27) Financial Data Schedule...........................18
(99) Additional Exhibits.............................None
* Filed herewith.
(b) Reports on Form 8-K: None
Signatures....................................................17
<PAGE>
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.
R-Tec Technologies, Inc.
Dated: November 14, 2000 By: /s/ Philip Lacqua
------------------------
Philip Lacqua, President
Chief Executive Officer
Chief Financial Officer
Director
