U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant To Section 13 Or 15(d) Of The Securities
Exchange Act Of 1934
For the quarterly period ended NOVEMBER 30, 2005
[ ] Transition Report Under Section 13 Or 15(D) Of The Securities
Exchange Act Of 1934
Commission File Number 000-50298
INTEGRATED SECURITY TECHNOLOGIES, INC.
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(Name of small business issuer in its charter)
NEVADA 98-0376008
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
SUITE 1500, 885 WEST GEORGIA STREET
VANCOUVER, B.C., CANADA V6C 3E8
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(Address of principal executive offices) (Zip Code)
(778) 322-7165
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Issuer's telephone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 18,475,551 shares of Common Stock
with a par value o $0.001 per share outstanding as of December 21, 2005.
Transitional Small Business Disclosure Format (check one): Yes [ ] NO [X]
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INTEGRATED SECURITY TECHNOLOGIES, INC.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
NOVEMBER 30, 2005
(UNAUDITED)
ASSETS
Current assets $ -
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses $ 3,998
Due to shareholder 45,797
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Total current liabilities 49,795
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Commitments and contingencies -
Stockholders' deficit:
Common stock, par value $.001, 200,000,000 shares
authorized; 18,475,551 shares issued and outstanding 18,475
Additional paid in capital 765,740
Accumulated other comprehensive loss:
Foreign currency translation (16)
Deficit accumulated during the exploration stage (833,994)
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Total stockholders' deficit (49,795)
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Total liabilities and stockholders' deficit $ -
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INTEGRATED SECURITY TECHNOLOGIES, INC.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF EXPENSES
THREE MONTHS ENDED NOVEMBER 30, 2005 AND 2004, AND
PERIOD FROM APRIL 12, 2002 (INCEPTION) THROUGH NOVEMBER 30, 2005
(UNAUDITED)
Inception
through
2005 2004 2005
------------ ----------- ----------
General and administrative expense $ 4,987 $ - $ 397,470
Loss on impairment - - 434,876
Interest expense 675 - 1,648
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Net loss (5,662) - (833,994)
Other comprehensive loss - - (16)
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Total comprehensive loss $ (5,662) $ - $(834,010)
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Net loss per share
Basic and diluted $ (0.00) $ -
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Weighted average shares outstanding
Basic and diluted 18,475,551 18,475,551
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INTEGRATED SECURITY TECHNOLGIES, INC.
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOW
THREE MONTHS ENDED NOVEMBER 30, 2005 AND 2004, AND
PERIOD FROM APRIL 12, 2002 (INCEPTION) THROUGH NOVEMBER 30, 2005
(UNAUDITED)
Inception
through
2005 2004 2005
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,662) $ - $(833,994)
Adjustments to reconcile net loss to net
cash used in operating activities:
Loss on impairment of investment - - 434,876
Changes in:
Prepaid expenses 1,260 - -
Accounts payable and accrued expenses (1,635) - 3,998
Imputed interest 675 - 1,648
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Net cash used in operating activities (5,362) - (393,472)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common stock - - 328,700
Net change in due to shareholder 5,362 - 64,788
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Net cash provided by financing activities 5,362 - 393,488
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EFFECT OF EXCHANGE RATE ON CASH - - (16)
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NET CHANGE IN CASH - - -
CASH at beginning of period - - -
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CASH at end of period $ - $ - $ -
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Cash paid for:
Interest $ - $ - $ -
Income tax - - -
Non-cash transactions:
Forgiveness of debt by shareholder - - 18,991
INTEGRATED SECURITY TECHNOLOGIES, INC.
(AN EXPLORATION STAGE COMPANY)
NOVEMBER 30, 2005
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of
Integrated Security Technologies, Inc. ("Integrated") have been prepared in
accordance with accounting principles generally accepted in the United States of
America and the rules of the Securities and Exchange Commission ("SEC"), and
should be read in conjunction with the audited consolidated financial statements
and notes thereto contained in Integrated's Annual Report filed with the SEC on
Form 10-KSB. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for the interim periods are
not necessarily indicative of the results to be expected for the full year.
Notes to the financial statements which would substantially duplicate the
disclosure contained in the audited consolidated financial statements for fiscal
2005 as reported in the 10-KSB have been omitted.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report on Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements involve risks and uncertainties, including
statements regarding Integrated Security Technologies' (Integrated) capital
needs, business plans and expectations. Such forward-looking statements involve
risks and uncertainties regarding the market price of natural resources,
availability of funds, government regulations, common share prices, operating
costs, capital costs and other factors. Forward-looking statements are made,
without limitation, in relation to operating plans, property exploration and
development, availability of funds and operating costs. Any statements
contained herein that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "predict", "potential" or
"continue", the negative of such terms or other comparable terminology. Actual
events or results may differ materially. In evaluating these statements, you
should consider various factors, including the risks outlined below, and, from
time to time, in other reports Integrated files with the SEC, including
Integrated's Annual Report on Form 10-KSB for the year ended August 31, 2005.
These factors may cause Integrated's actual results to differ materially from
any forward-looking statement. Integrated disclaims any obligation to publicly
update these statements, or disclose any difference between its actual results
and those reflected in these statements. The information constitutes
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Given these uncertainties, readers are cautioned
not to place undue reliance on such forward-looking statements.
OVERVIEW
We were incorporated on April 12, 2002, under the laws of the State of Nevada.
We are an exploration stage company engaged in the acquisition and exploration
of mineral properties. We own four mineral claims that we refer to as the Saucy
mineral claims and six mineral claims that we refer to as the Salsa mineral
claims. The Saucy and Salsa mineral claims are located adjacent to each other
in the Province of British Columbia, Canada. Both the Saucy and the Salsa
mineral claims are held in the name of our wholly owned subsidiary, Iguana
Explorations Inc. Further exploration of these mineral claims is required
before a final determination as to their viability can be made. No commercially
viable mineral deposit may exist on our mineral claims. Our plan of operations
is to carry out exploration work on these claims in order to ascertain whether
they possess deposits of gold, copper or silver. We can provide no assurance
that our mineral claims contain a mineral deposit until appropriate exploratory
work is done and an evaluation based on that work concludes further work
programs are justified. At this time, we have no known reserves on our mineral
claims.
GEOLOGY OF THE MINERAL CLAIMS
We engaged Mr. W.G. Timmins to prepare a geological evaluation report on the
Saucy mineral claims. Mr. Timmins is a consulting geologist and registered
professional engineer in the Geological Section of the Association of
Professional Engineers and Geoscientists of British Columbia. Mr. Timmins has
practiced in his profession for 39 years and been a registered professional
engineer since 1969.
Mr. Timmins recommended a two-stage exploration program for the Saucy mineral
claims to determine whether there are mineral deposits of gold, silver or copper
on those claims: Stage 1 consisting of reconnaissance geology and sampling at an
estimated cost of $5,000; and Stage 2 consisting of trenching, sampling,
prospecting and mapping at an estimated cost of $10,000.
We completed Stage 1 in 2002 and Mr. Timmins recommended proceeding to Stage 2,
which was completed in November of 2003.
We received a report from Mr. Timmins dated December 10, 2003 reporting on
completion of Stage 2 of the program. Mr. Timmins reported that the main
mineral vein on the Saucy claims narrowed in width and had decreasing gold
values. Mr. Timmins advised that it is normal for this type of quartz vein to
exhibit pinching and swelling with variable gold values. Based on the work on
the Saucy claims and on information contained in previously reported work on
ground adjacent to the Saucy claims, Mr. Timmins reported that the vein
structure on the Saucy claims may extend into a wider vein on the adjacent areas
which reportedly carry significant gold values. Based on that conclusion, Mr.
Timmins recommended that we acquire the Salsa claims. Mr. Timmins also
recommended that we conduct a work program on the Salsa mineral claims
consisting of blasting, sampling, prospecting, geological mapping and assays at
an estimated cost of $7,000.
The geological review and interpretations required in stages one and two of the
exploration program have been and will continue to be comprised of reviewing the
data acquired and analyzing this date to assess the potential mineralization of
the mineral claims. Geological review entails the geological study of an area to
determine the geological characteristics, identification of rock types and any
obvious indications of mineralization. The purpose of undertaking the geological
review is to determine if there is sufficient indication of mineralization to
warrant additional exploration. Positive results at each stage of the
exploration program would be required to justify continuing with the next stage.
Such positive results would include the identification of the zones of
mineralization.
PLAN OF OPERATIONS
Our business plan is to follow the recommendations of our consulting geologist
and proceed with completion of the work program recommended for the Salsa
mineral claims at an estimated cost of $7,000.
We anticipate that we will incur $15,000 in operating expenses over the next
twelve months. Operating expenses will include mineral claims renewal and
professional legal and accounting expenses associated with being a reporting
issuer under the Securities Exchange Act of 1934.
Our total expenditures over the next twelve months are anticipated to be
approximately $22,000. Our present cash reserves are not sufficient for us to
carry out our plan of operations without additional financing. Our sole
director, Randy White, has made an oral commitment to loan us the necessary
funds to complete our business plan, however he is under no obligation to do so.
We do not have any other financing arrangements in place and there is no
assurance that we will be able to secure the necessary financing.
In the next twelve months, we do not plan to make any purchases or sales of
significant equipment, nor do we plan to make any significant changes in our
number of employees.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are an exploration stage corporation and have
not generated any revenues from operations. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of our properties, and possible
cost overruns due to price and cost increases in services.
To become profitable and competitive, we must conduct research and exploration
of our properties before we start production of any minerals we may find. We are
seeking equity financing to provide for the capital required to implement our
research and exploration phases.
We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result in
additional dilution to existing shareholders.
RESULTS OF OPERATIONS FOR PERIOD ENDING NOVEMBER 30, 2005
We have not earned any revenues to date. We do not anticipate earning revenues
until such time as we enter into commercial production of our mineral
properties. We are presently in the exploration stage of our business and we
can provide no assurance that we will discover commercially exploitable levels
of mineral resources on our properties, or if such deposits are discovered, that
we will enter into further substantial exploration programs.
We incurred no operating expenses for the three months ended November 30, 2004
compared to $4,987 for the three months ended November 30, 2005. The expenses in
2005 are for professional fees. We anticipate our operating expenses will
increase as we undertake our plan of operations. The increase will be
attributable to our beginning of the geological exploration program on the Salsa
mineral claims and the professional fees to be incurred in complying with the
reporting requirements under the Securities Exchange Act of 1934.
LIQUIDITY AND CAPITAL RESOURCES
We have no cash or working capital as of November 30, 2005. We estimate that
our expenses over the next twelve months will total $22,000. Our working
capital is insufficient to pay for the costs of our exploration programs and
anticipated administrative expenses. Our sole director, Randy White, has made
an oral commitment to provide adequate funding to enable us to complete the
exploration programs. However, he is under no legal obligation to do so.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue any extensive exploration activities. For these reasons,
there is substantial doubt that we will be able to continue as a going concern.
ITEM 3. CONTROLS AND PROCEDURES.
Integrated has adopted and implemented internal disclosure controls and
procedures designed to provide reasonable assurance that all reportable
information will be recorded, processed, summarized and reported within the time
period specified in the SEC's rules and forms. Under the supervision and with
the participation of Integrated's management, including Integrated's Chief
Executive Officer and Chief Financial Officer, Integrated has evaluated the
effectiveness of the design and operation of its disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15(e) as of the end of the fiscal
quarter covered by this report. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that these disclosure
controls and procedures are effective. There were no changes in Integrated's
internal controls or in other factors during or since the end of the fiscal
quarter covered by this report that have had a material effect or are reasonably
likely to have a material effect on internal controls subsequent to the end of
the fiscal quarter covered by this report.
ITEM 6. REPORTS ON FORM 8-K.
We did not file any Current Reports on Form 8-K during our fiscal quarter ended
November 30, 2005.
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTEGRATED SECURITY TECHNOLOGIES, INC.
Date: December 21, 2005
By: /s/ Randy White
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Randy White
Director