-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UQd3sEkAqEaJOifedPlaC2TxT/CU1xzsuoVXW9h4Tc/bHW8gdDsq8LlG6lbrGmO/ b6o29x2IWzyHecezYbxw8Q== 0001019687-05-003297.txt : 20051130 0001019687-05-003297.hdr.sgml : 20051130 20051130163137 ACCESSION NUMBER: 0001019687-05-003297 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050831 FILED AS OF DATE: 20051130 DATE AS OF CHANGE: 20051130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Ingen Technologies, Inc. CENTRAL INDEX KEY: 0000861058 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 880429044 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-28704 FILM NUMBER: 051234670 BUSINESS ADDRESS: STREET 1: 35193 AVENUE A, SUITE C CITY: YUCAIPA STATE: CA ZIP: 92399 BUSINESS PHONE: 800-259-9622 MAIL ADDRESS: STREET 1: 35193 AVENUE A, SUITE C CITY: YUCAIPA STATE: CA ZIP: 92399 FORMER COMPANY: FORMER CONFORMED NAME: CREATIVE RECYCLING TECHNOLOGIES INC DATE OF NAME CHANGE: 19980505 FORMER COMPANY: FORMER CONFORMED NAME: CLASSIC RESTAURANTS INTERNATIONAL INC /CO/ DATE OF NAME CHANGE: 19960619 FORMER COMPANY: FORMER CONFORMED NAME: CLASSIC RESTAURANTS INC/CO DATE OF NAME CHANGE: 19960604 10QSB 1 ingen_10q-083105.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2005 Commission File Number ___________ INGEN TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Georgia 88-0429044 ------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 35193 Avenue "A", Suite-C, Yucaipa, California 92399 ---------------------------------------------- ----- (Address of principal executive offices) (Zip Code) (800) 259-9622 -------------- (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, no par value -------------------------- (Title of Class) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [x] At August 31, 2005, 479,737,593 shares of the registrant's common stock (no par value) were outstanding. Transitional Small Business Disclosure Format (check one): YES / / NO /X/ PART I. - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET (UNAUDITED) - -------------------------------------------------------------------------------------------------------- AUGUST 31, 2005 2004 - -------------------------------------------------------------------------------------------------------- ASSETS Current assets Cash $ 404,432 $ 9,976 Accounts receivable 38,565 -- ----------- ----------- Total current assets 442,997 9,976 ----------- ----------- Property and equipment, net of accumulated depreciation of $84,910 for 2005 and $66,913 for 2004 45,136 30,924 Other Assets Patents, net of accumulated amortization of zero for 2005 and $9,964 for 2004 -- 16,941 ----------- ----------- Total other assets -- 16,941 ----------- ----------- TOTAL ASSETS $ 488,133 $ 57,841 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable & Accrued Expenses $ 394,771 $ 497,048 Litigation reserve -- 143,500 ----------- ----------- Total current liabilities 394,771 640,548 ----------- ----------- Long-term Liabilities Officer's loan 42,802 264,125 Notes payable -- 25,000 ----------- ----------- Total long-term liabilities 42,802 289,125 ----------- ----------- Stockholders' Deficit Preferred stock, no par value, 37,000,000 authorized; issued and outstanding 36,900,000 for 2005 and zero for 2004 369,000 -- Series A preferred stock, no par value, 3,000,000 authorized; issued and outstanding 3,000,000 for 2005 and zero for 2004 30,000 -- Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 479,737,593 for 2005 and 12,864,593 for 2004 6,330,713 5,407,213 Accumulated deficit (6,679,153) (6,279,045) ----------- ----------- Total stockholders deficit 50,560 (871,832) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 488,133 $ 57,841 =========== =========== -1- CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - ------------------------------------------------------------------------------- FOR THE THREE MONTHS ENDED AUGUST 31, 2005 2004 - ------------------------------------------------------------------------------- Sales $ 532,872 $ 136,480 Cost of sales 85,046 58,156 ------------- ------------- GROSS PROFIT 447,826 78,324 Selling, general and administrative expenses 559,246 95,344 ------------- ------------- OPERATING LOSS (111,420) (17,020) ------------- ------------- Other (Expenses): Interest expenses (1,542) (3,090) ------------- ------------- NET LOSS BEFORE TAXES (112,962) (20,110) Provision for Income Taxes 800 800 ------------- ------------- NET LOSS $ (113,762) $ (20,910) ============= ============= Basic and diluted net loss per share $ (0.00) $ (0.00) ============= ============= Weighted average number of common shares 301,443,916 12,864,593 -2- CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - ------------------------------------------------------------------------------------------------- FOR THE THREE MONTHS ENDED AUGUST 31, 2005 2004 - ------------------------------------------------------------------------------------------------- CASH FLOW FROM OPERATING ACTIVITIES: Net loss $(113,762) $ (20,910) Adjustments to reconcile net loss to net cash used in operations: Stock Issued for Services Accounts receivable (38,565) -- Depreciation and amortization 2,965 4,499 Increase (Decrease) in: Accounts payable & Accrued expenses 8,241 3,890 Litigation reserve (143,500) -- --------- --------- NET CASH USED IN OPERATING ACTIVITIES (284,621) (12,521) --------- --------- CASH FLOW FROM INVESTING ACTIVITIES: Additions to fixed assets (23,174) -- --------- --------- NET CASH USED IN INVESTING ACTIVITIES (23,174) -- --------- --------- CASH FLOW FROM FINANCING ACTIVITIES: Net repayments from note payable to related party (60,000) (12,056) Repayments to notes payable (25,000) -- Proceeds from issuance of common stock 779,500 -- --------- --------- NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES 694,500 (12,056) --------- --------- NET INCREASE (DECREASE) INCREASE IN CASH 386,705 (24,577) Cash Balance at Beginning of Period 17,727 34,553 --------- --------- CASH BALANCE AT END OF PERIOD $ 404,432 $ 9,976 ========= ========= Supplemental Disclosures of Cash Flow Information Interest paid $ -- $ -- Taxes paid $ -- $ --
-3- NOTE 1 - NATURE OF BUSINESS Ingen Technologies, Inc., (formerly known as Creative Recycling Technologies Inc., the "Company" or "Ingen Technologies"), is a Public Company trading under OTC: IGTN.PK. Ingen Technologies is a growth-oriented technology company that offers a diverse and progressive services and products. Ingen Technologies, Inc., is a Georgia corporation ("IGTN") and owns 100% of the capital stock of Ingen Technologies, Inc. a Nevada corporation and it has been in business since 1999. The Company's flagship product is its BAFI (TM), the world's first wireless digital low gas warning system for pressurized gas cylinders. On October 24, 2000, the BAFI (TM) received a U.S. Patent with Patent No. 6,137,417. BAFI (TM), now in its second generation, is an accurate and cost-effective, real-time pressurized gas warning system that will alert users when gas levels are approaching empty. The BAFI (TM) line has multiple applications, inclusive but not limited to, the Medical Industry, Home Consumer, Residential Development Industry, Safety & Protection (fire and police), Aircraft Industry, and the Recreational Vehicle Industry. BAFI (TM) meets or exceeds regulatory compliance of this type of product and is completed and in production. The Secure Balance (TM) product is a private-label product that includes a vestibular function testing system and balance therapy system available to physicians throughout the United States. PRESENTATION OF INTERIM INFORMATION: The accompanying consolidated financial statements as of August 31, 2005 and 2004, for the three months ended August 31, 2005 and 2004 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended May 31, 2005. In the opinion of Management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of August 31, 2005 and 2004, for the three months ended August 31, 2005 and 2004 have been made. The results of operations for the three months ended August 31, 2005 are not necessarily indicative of the operating results for the full year. PRINCIPLE OF CONSOLIDATION AND PRESENTATION: The accompanying consolidated financial statements include the accounts of Ingen Technologies, Inc. and its subsidiaries after elimination of all inter-company accounts and transactions. Certain prior period balances have been reclassified to conform to the current period presentation. -4- NOTE 2 - GOING CONCERN The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liabilities and commitments in the normal course of business. In the near term, the Company expects operating costs to continue to exceed funds generated from operations. As a result, the Company expects to continue to incur operating losses and not have enough money to grow its business in the future. The Company can give no assurance that it will achieve profitability or be capable of sustaining profitable operations. As a result, operations in the near future are expected to continue to use working capital. To successfully grow the individual segments of the business, the Company must decrease its cash burn rate, improve its cash position and the revenue base of each segment, and succeed in its ability to raise additional capital through a combination of primarily public or private equity offering or strategic alliances. The Company also depends on certain important employees, and the loss of any of those employees would harm the Company's business. The company incurred a loss of $113,762 and $20,910 for the three months ended August 31, 2005 and 2004, and as of that date, had an accumulated deficit of $6,679,153 and $6,279,045, respectively. NOTE 3 - ACCRUED EXPENSES Accrued expenses at August 31, 2005 and 2004 consist of: 2005 2004 ------------ ------------ Accrued officer's compensation $ 363,500 $ 460,000 Accrued Interest Expense 30,471 15,448 Accrued taxes 800 1,600 ------------ ------------ Total $ 394,771 $ 477,048 ============ ============ NOTE 4 - NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share: August 31, 2005 August 31, 2004 --------------- --------------- Numerator: Net Loss $ (113,762) $ (20,910) ------------- ------------- Denominator: Weighted Average Number of Shares 301,443,916 12,864,593 ------------- ------------- Net loss per share-Basic and Diluted $ (0.00) $ (0.00) -5- NOTE 5 - SEGMENT INFORMATION SFAS No. 131 "Disclosures about Segments of an Enterprise and Related Information" requires that a publicly traded company must disclose information about its operating segments when it presents a complete set of financial statements. Since the Company has only one segment; accordingly, detailed information of the reportable segment is not presented. NOTE 6 - RELATED PARTY TRANSACTIONS The Company had notes payable to a related party in the amounts of $42,802 and $264,125 as of August 31, 2005 and 2004, respectively. The interest rate on the loan is 6% and due upon working capital availability, but no sooner than June 1, 2006. The related accrued interest is $30,471 and $15,448 as of August 31, 2005 and 2004, respectively. As of August 31, 2004, there is a note payable to a related party for the amount of $25,000 with zero interest. The note for the amount of $25,000 was paid during the quarter ended August 31, 2005. NOTE 7 - LITIGATION SETTLEMENT As of August 31, 2004, there was a pending litigation in connection with the previous landlord for breaking a facility lease by the Company. Management had estimated and accrued a loss for $143,500. The litigation was settled and paid in August 2005. NOTE 8 - GUARANTEES The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company August provide customary indemnifications to purchasers of the Company's businesses or assets; and (ii) certain agreements with the Company's officers, directors and employees, under which the Company August be required to indemnify such persons for liabilities arising our of their employment relationship. The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on its balance sheet as of August 31, 2005. -6- NOTE 9 - PREFERRED STOCK The Company is authorized to issue 40,000,000 shares of no par value preferred stock. As of August 31, 2004 and 2005, the Company had zero and 39,900,000 shares of preferred stock issued and outstanding, respectively. No dividends shall accrue or be payable on the preferred stocks. In February 2005, the Company designated 3,000,000 of the shares of preferred stock as "Series A Preferred Stock". The Company has the right to redeem each share of Series A preferred stock for $1; however, there is no obligation for this redemption. Each share of Series A preferred stock is entitled to vote on all matters with holders of the common stock; however, each Series A preferred stock is entitled to 15 votes. Each share of Series A preferred stock is convertible, at the option of the holder and subject to a 65 day written notice to the Company, at any time after the date of the issuance into 10 shares of common stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Series A preferred stock shall be entitle to be paid $1 per share before any payments or distribution of assets of the Company to the holders of the common stock or any other equity securities of the Company. NOTE 10 - SUBSEQUENT EVENTS On October 31, 2005, the Company held a special shareholder meeting and approved a reduction in the number of authorized common shares to 100 million, a 40 to 1 reverse split of all issued and outstanding common shares, and a 3 to 1 reverse split of all issued and outstanding preferred shares. The Board of Directors and preferred shareholders also approved changes in some of the attributes of the preferred shares and designated all preferred shares as Class A preferred shares. All preferred shares are convertible on a one-to-one basis for common shares and vote on a one share-one vote basis. -7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS This Quarterly Report on Form 10-QSB contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect management's current views with respect to future events and financial performance. In this report, the words "anticipates," "believes," "expects," "intends," "future," "may" and similar expressions identify forward-looking statements. These and other forward-looking statements are subject to certain risks and uncertainties, including those discussed in the Risk Factors section of this Item 2 and elsewhere in this Form 10-QSB, that could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances occurring subsequent to the filing of the Form 10-QSB with the Securities and Exchange Commission. OVERVIEW We are a medical device manufacturer and service provider for medical and consumer markets both domestic and (planned for) abroad. We have four products, one of which has had sales in at least the last two fiscal years (Secure Balance(TM)). The others are oxygen and gas monitoring safety devices that we have developed over the last few years and expect to begin selling in calendar year 2006, OxyView, OxyAlert(TM) and GasAlert(TM). Our sales revenues for the first quarter of fiscal year 2006 (June 1, 2005 through August 31, 2005) were $532,872, compared with $136,480 in sales in the first quarter of fiscal year 2005. All of these sales were of Secure Balance(TM). We had sales revenues of $794,314 in our entire fiscal year 2005 (all Secure Balance(TM) as well). We expect this upswing to continue for our current fiscal year and beyond as we build our Secure Balance(TM) brand recognition in the market and intensify our efforts for market penetration. We have had significant losses since inception. Our net loss was $113,762 in the first quarter of fiscal year 2006, compared with $20,910 in the first quarter of fiscal year 2005. Our net loss in fiscal year 2004 was $951,101 and in fiscal year 2005 was $307,255. We anticipate that we will incur substantial additional operating losses in our fiscal year 2006 as we wrap up our research and development of our BAFI(TM) product line and continue to seek an increase in Secure Balance(TM) sales. As of August 31, 2005, we had an accumulated deficit of $6,679,153 (up from $6,279,045 in the first quarter of fiscal year 2004). Our business plan for the remainder of fiscal year 2006 (ending May 31, 2006) is to continue our efforts to increase the market share Secure Balance(TM) and to begin world-wide sales of our BAFI(TM) product line. We sold 347,100,000 of our common shares in the first quarter of fiscal year 2006, for a total purchase price of $779,500, CRITICAL ACCOUNTING POLICIES Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements. Certain of our policies require the application of management judgment in making estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes. Those estimates and assumptions are based on historical -8- experience and various other factors deemed to be applicable and reasonable under the circumstances. The use of judgment in determining such estimates and assumptions is by nature, subject to a degree of uncertainty. Accordingly, actual results could differ from the estimates made. Our significant accounting policies include: STOCK-BASED COMPENSATION SFAS No. 123, "Accounting for Stock-Based Compensation," establishes the use of the fair value based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. The statement also permits companies to elect to continue using the intrinsic value accounting method specified in Accounting Principles Bulletin Opinion No. 25, "Accounting for Stock Issued to Employees," to account for stock-based compensation issued to employees. Through May 31, 2005, we have elected to use the intrinsic value based method and have disclosed the pro forma effect of using the fair value based method to account for our stock-based compensation. We plan to continue using the intrinsic value based method and providing disclosure for the pro forma effect of using the fair value based method to account for our stock-based compensation through our fiscal quarter ending in November, 2005. As a result of the recent adoption by the Financial Accounting Standards Board of SFAS No. 123 (revised 2004) "Share-Based Payment," or SFAS No. 123(R), we will be required, beginning in our fiscal quarter ending February of 2006, to apply the fair value method as prescribed in SFAS No. 123(R). Although our adoption of SFAS No. 123(R) could have a material impact on our financial position and results of operations, we are still evaluating the potential impact from adopting this statement. ALLOCATION OF COSTS We allocate certain indirect costs associated with support activities such as the rent and utilities for facilities. These costs are allocated between research and development expense and general and administrative expense based on headcount and/or square footage. OFF-BALANCE SHEET ARRANGEMENTS We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs). RESULTS OF OPERATIONS We had $532,872 in sales in the first quarter of fiscal year 2006, up from $136,480 in the same quarter of fiscal year 2005. Our cost of sales was $85,046 in the first quarter of fiscal year 2006 and $58,156 in the same quarter of fiscal year 2005. As a result, our gross profit increased from $78,324 in the first quarter of fiscal year 2005 to $447,826 in the first quarter of fiscal year 2006. Our selling, general and administrative expenses for the first quarter of fiscal year 2006 were $559,246 ($95,344 in the same quarter of fiscal year 2005). Much of this increase is attributable to the increase in sales brought about by more word-of-mouth referrals from our physician clientele, adding more Secure Balance sales representatives and an increase in advertising costs to over $100,000 for the quarter. Our operating loss increased from $17,020 in the first quarter of fiscal year 2005 to $111,420 in the first quarter of fiscal year 2006. We expect our operating costs to remain constant in fiscal year 2006, but still have a goal of turning a profit late in fiscal year 2006 or in 2007. We have not generated profits to date and therefore have not paid any federal income taxes since inception. We paid $800 minimum franchise tax in California in years 2004 and 2005. As of May 31, 2005, our federal tax net operating loss carryforward was $1,406,771 ($1,099,516 in 2004), which will begin to expire in 2019, if not utilized. Our ability to utilize our net operating loss and tax credit carryforwards may become subject to limitation in the event of a change in ownership. -9- LIQUIDITY AND CAPITAL RESOURCES We financed our operations in the first quarter of fiscal year 2006 through $532,872 of sales of Secure Balance(TM) and private placement common stock sales totaling $779,500. In years past, prior to the commencement of Secure Balance(TM) sales, we relied on loans and deferments from our CEO and Chairman Scott R. Sand and the approximate $300,000 investment of Mr. Jeffrey Gleckman (one of our two preferred shareholders). From June 10, 1999 to March 31, 2004, Mr. Sand provided "Ingen Nevada," and then "Ingen Georgia" (after our reverse merger; for a short period of time) with a total of $72,000 in cash loans and $360,000 in deferred executive compensation. Mr. Sand drew $54,000 in compensation over this time period. We repaid Mr. Sand $60,000 in the first quarter of fiscal year 2006, $173,379 in fiscal year 2005 and $33,649 in 2004. As of August 31, 2005, we had cash on hand of $404,432 (compared to $9,976 in the same quarter of fiscal year 2005). We also, as of the same date, had $38,565 in accounts receivable (none in the same quarter of fiscal year 2005). Our future cash requirements will depend on many factors, including finishing our research and development programs for our BAFI(TM) product line (largely completed), the costs involved in filing, prosecuting and enforcing patents, competing technological and market developments and the cost of product commercialization, as well as our ongoing Secure Balance(TM) sales effort. We do not expect to generate a positive cash flow from operations at least until the commercial launch of our BAFI(TM) product line (planned for calendar year 2006) and possibly later given the expected cost of commercializing our products. We intend to seek additional funding through public or private financing transactions. Successful future operations are subject to a number of technical and business risks, including our continued ability to obtain future funding, satisfactory product development and market acceptance for our products. See "Business Risks" below. HOPE CAPITAL, INC. From January of 2005 to the end of fiscal year 2005, we entered into agreements with Hope Capital, Inc. to purchase common shares of our stock in a series of private transactions. Hope Capital, Inc. ultimately purchased 30,200,000 of our common shares in fiscal year 2005 at a total price of $144,000. Hope Capital, Inc. committed to purchase an additional 200 million plus common shares in the first quarter of fiscal year 2006 (at $0.002 per share). OTHER FINANCINGS In total, we sold 347,100,000 shares of our common stock in the first quarter of fiscal year 2006 for a total purchase price of $779,500. These stock purchases were made by Hope Capital, Inc. (211,800,000 shares), Xcel Associates, Inc. (133,300,000 shares) and Apex Charting, Inc. (2,000,000 shares). These sales were all at $0.002 per share. We anticipate filing a registration statement with the Securities and Exchange Commission during our fiscal year 2006. We currently are planning to offer $4,000,000 of our securities. PLAN OF OPERATION (FOR BAFI(TM) PRODUCT LINE) We have reserved $500,000 in private placement common stock sales proceeds from fiscal year 2005 and the first quarter of fiscal year 2006 as a starting point for the funding for our operations in fiscal year 2006 (budgeted at $4 million). If we are successful in filing and selling our planned $4,000,000 public registration in fiscal year 2006, we plan to use these proceeds as follows: The $4 million is budgeted for the next twelve months and is divided into the following categories: CATEGORY ESTIMATED COST General and Administrative $600,000 (another $500,000 paid through Secure Balance(TM) sales) Advertising $400,000 for BAFI(TM) product line ($150,000 for Secure Balance(TM) paid with Secure Balance(TM) sales) Manufacturing Costs $2,000,000 for BAFI(TM) product line ($1,000,000 for Secure Balance(TM) paid with Secure Balance(TM) sales) Research and Development $400,000 (to create production models for BAFI(TM) product line) Consultants, Professionals $300,000 Debt repayment will be paid out of product sales Contingency $300,000 The actual costs within each category and our total costs of operation for fiscal year 2006 may vary significantly from the estimates set forth above based on the factors discussed herein. -10- We have not included our projected sales revenues in our budget for fiscal year 2006. Since we do not know if we will be able to sell our securities in a public registration, revenues earned will be utilized in the same categories as presented above. We have projected Secure Balance(TM) sales of $500,000 in each of our first and second fiscal quarters of 2006 and $700,000 in each of our last fiscal quarters of 2006. We have projected OxyView sales of $200,000 in our third fiscal quarter of 2006 (December-February) and $400,000 in our fourth fiscal quarter. Our OxyAlert(TM) fourth quarter sales projection is $200,000. Management believes these are conservative, achievable sales projections. We expect to engage in at least 6 months of intensive marketing of our BAFI(TM) product line before sales pick up. Our market for GasAlert(TM) is a much broader, larger market and we have declined to project sales totals presently. TRENDS THAT MAY IMPACT OUR LIQUIDITY Positive Trends: The United States has an increasingly elderly population. Our Secure Balance(TM) and BAFI(TM) product line (except GasAlert(TM) which targets the entire adult population) are made to meet some of the challenges and circumstances experienced by our senior citizens. As a result, we expect our sales to increase in time in reflection of this positive trend. Management also believes that our products provide increasing protection in relation to medical malpractice issues. Use of our Secure Balance(TM) system and OxyAlert(TM) and OxyView products enhance the safety of patients, and therefore, we believe, lessen the chances of medical malpractice exposure to our physician clients. We have been developing our BAFI(TM) product line since 1999. Now, some 6 years later, we still have not identified competition in the marketplace for our BAFI(TM) product line. The lack of competition is expected to enhance our planned marketing campaign. We believe that Secure Balance(TM) is now among the leaders in the balance and fall prevention industry. We expect to be able to capitalize on this notoriety and increase our Secure Balance(TM) sales in fiscal year 2006 and beyond. Negative Trends: Our product sales are impacted by Medicare, and are Medicare dependent. Adverse economic conditions, federal budgetary concerns and politics can affect Medicare regulations and could negatively impact our product sales. SEASONAL ASPECTS THAT EFFECT MAY IMPACT OUR MEDICAL MARKET Traditionally, the medical market experiences an economic decrease in purchasing during the summer months. Peak months are usually October through February, followed by a decrease from March to May. This is the common "bell curve" that has been consistent for several decades and will affect our sales during the course of a year. OUR SECURE BALANCE(TM) LEASING AND FINANCING PROGRAMS Our Secure Balance(TM) Leasing and Financing Programs are offered to allow our physician and medical facility clients a variety of affordable leasing and financing options. Our financing option includes a 90 deferral program, giving clients a chance to earn revenues from Secure Balance(TM) before payments are due. Please see our website to see the particulars of these financing options. PURE PRODUCE - A DEVELOPING PRODUCT We have an agreement in place with AgroWorx, Inc., a company affiliated with one our directors, Christopher A. Worth. This agreement relates to Pure Produce, an AgroWorx line of plant products. We will work in concert with AgroWorx to develop production facilities and market the products grown therein. The Pure Produce(TM) product is a continuing research & development program currently under design. This program uses hydroponics technology to grow various plants without the use of soil, fertilizer and water consumption. The Company anticipates entering the nutriceutical and pharmaceutical markets over the next two years. If we accelerate the development of this product during our fiscal year 2006, we may use a portion of our planned registration statement securities sales proceeds to move this project (and adjust our currently planned uses accordingly). The portion that may be used will depend on the amount of Secure Balance(TM) and BAFI(TM) product line sales during fiscal year 2006. The amount of funding anticipated for the project is as much as $2 million to construct and operate as many as 10 production facilities. -11- The Ingen Technologies, Inc. Pure Produce(TM) facilities will be designed to offer vegetable growth efficiency, without pesticides. The Agro-facility will offer the most efficient use of water and energy conservation technologically available, while offering the best method for insulator towards food security available to us. The main competitive advantage of the facility, if operational, will be to deliver off-season, high profit margin gourmet vegetables, herbs and edible flowers. The produce grown can be customized for local consumption or be grown for specific export markets. More information regarding Pure Produce(TM) will be forthcoming in our subsequent period reporting filings with the SEC as we continue to refine and develop our plans for Pure Produce(TM). NEW EMPLOYEES We do note anticipate hiring employees over the next twelve months. BUSINESS RISKS The following is a summary of the many risks and uncertainties we face in our business. You should carefully read these risks and uncertainties as well as the other information in this report in evaluating our business and its prospects. WE HAVE A HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT, AND WE MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE. We have experienced significant operating losses in each period since our inception. As of August 31, 2005, we have incurred total accumulated losses of $6,679,153. We expect these losses to continue and it is uncertain when, if ever, we will become profitable. These losses have resulted principally from costs incurred in research and development and from general and administrative costs associated with operations. We expect to incur operating losses in the future as a result of expenses associated with research and product development as well as general and administrative costs. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. WE WILL NEED ADDITIONAL CAPITAL IN THE FUTURE TO SUPPORT OUR GROWTH, AND RAISING SUCH CAPITAL WILL LIKELY CAUSE SUBSTANTIAL DILUTION TO EXISTING STOCKHOLDERS. IF ADDITIONAL CAPITAL IS NOT AVAILABLE, WE MAY HAVE TO CURTAIL OR CEASE OPERATIONS. Our current plans indicate we will need significant additional capital for research and development and market penetration before we have any anticipated revenue generated from our BAFI(TM) product line. The actual amount of funds that we will need will be determined by many factors, some of which are beyond our control, and we may need funds sooner than currently anticipated. These factors include: o the extent to which we enter into licensing arrangements, collaborations or joint ventures; o our progress with research and development; o the costs and timing of obtaining new patent rights (if any); o cost of continuing operations and sales; o the extent to which we acquire or license other technologies; and o regulatory changes and competition and technological developments in the market. We will be relying on future securities sales to enable us to grow and reach profitability. There is no guarantee we will be able to sell our securities. WE HAVE RELIED ON CAPITAL CONTRIBUTED BY RELATED PARTIES, AND SUCH CAPITAL MAY NOT BE AVAILABLE IN THE FUTURE. -12- We have relied on loans and compensation deferrals from our CEO and Chairman, Scott R. Sand, and investment from Jeffrey Gleckman, to sustain us from 1999 into fiscal year 2004. Although we have paid much of these loans from Mr. Sand back, we may be unable to repay the remainder as planned and may have to look again to Mr. Sand for assistance in financing if our securities sales don't go as planned. There is no guarantee that Mr. Sand will have financial resources available to assist in our funding. WE ARE SUBJECT TO NEW CORPORATE GOVERNANCE AND INTERNAL CONTROLS REPORTING REQUIREMENTS, AND OUR COSTS RELATED TO COMPLIANCE WITH, OR OUR FAILURE TO COMPLY WITH EXISTING AND FUTURE REQUIREMENTS COULD ADVERSELY AFFECT OUR BUSINESS. We face new corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as new rules and regulations subsequently adopted by the SEC. These laws, rules and regulations continue to evolve and may become increasingly stringent in the future. In particular, we will be required to include management and auditor reports on internal controls as part of our annual report for the year ended December 31, 2006 pursuant to Section 404 of the Sarbanes-Oxley Act. We cannot assure you that we will be able to fully comply with these laws, rules and regulations that address corporate governance, internal control reporting and similar matters. Failure to comply with these laws, rules and regulations could materially adversely affect our reputation, financial condition and the value of our securities. OUR PRODUCTS MAY NOT BE SUCCESSFULLY DEVELOPED OR COMMERCIALIZED, WHICH WOULD HARM US AND FORCE US TO CURTAIL OR CEASE OPERATIONS. We are a relatively new company and our BAFI(TM) product line in particular is still in the late stages of development (we still need manufacturing prototypes). These products, once marketing commences, may not be successfully developed or commercialized on a timely basis, or at all. If we are unable, for technological or other reasons, to complete the development, introduction or scale-up of manufacturing of these products or other potential products, or if our products do not achieve a significant level of market acceptance, we would be forced to curtail or cease operations. Even if we develop our products for commercial use, we may not be able to develop products that: o are accepted by, and marketed successfully to, the medical marketplace; o are safe and effective; o are protected from competition by others; o do not infringe the intellectual property rights of others; o are developed prior to the successful marketing of similar products by competitors; or o can be manufactured in sufficient quantities or at a reasonable cost. WE MAY NOT BE ABLE TO FORM AND MAINTAIN THE COLLABORATIVE RELATIONSHIPS THAT OUR BUSINESS STRATEGY REQUIRES, AND IF WE CANNOT DO SO, OUR ABILITY TO DEVELOP PRODUCTS AND REVENUE WILL SUFFER. We must form research collaborations and licensing arrangements with several partners at the same time to operate our business successfully. To succeed, we will have to maintain our existing relationships and establish additional collaborations. We cannot be sure that we will be able to establish any additional research collaborations or licensing arrangements necessary to develop and commercialize products using our technology or that we can do so on terms favorable to us. If our collaborations are not successful or we are not able to manage multiple collaborations successfully, our programs may suffer. Collaborative agreements generally pose the following risks: o collaborators may not pursue further development and commercialization of products resulting from collaborations or may elect not to continue or renew research and development programs; o collaborators may delay clinical trials, under-fund a clinical trial program, stop a clinical trial or abandon a product, repeat or conduct new clinical trials or require a new formulation of a product for clinical testing; -13- o collaborators could independently develop, or develop with third parties, products that could compete with our future products; o the terms of our agreements with our current or future collaborators may not be favorable to us; o a collaborator with marketing and distribution rights to one or more products may not commit enough resources to the marketing and distribution of our products, limiting our potential revenues from the commercialization of a product; o disputes may arise delaying or terminating the research, development or commercialization of our products, or result in significant litigation or arbitration; and o collaborations may be terminated and, if terminated, we would experience increased capital requirements if we elected to pursue further development of the product. SECURE BALANCE(TM) IS A PRIVATE LABEL PRODUCT THAT IS NOT EXCLUSIVE TO US. We provide education, training and services related to the SportKat product lines that all constitute what we call "Secure Balance(TM)." However, the devices themselves are provided to us on a non-exclusive basis, meaning that other companies are marketing the same devices under other names (or using the SportKat name). Only time will tell if the non-exclusive nature of the provision of the devices themselves to us negatively impacts our ability to capture a meaningful market share. If our sales of Secure Balance(TM) suffer because of this non-exclusive relationship, our financial prospects and operational results will be negatively impacted. ALTHOUGH WE DO NOT HAVE DIRECT COMPETITION IN RELATION TO OUR BAFI(TM) PRODUCT LINE, WE EXPECT IT IN THE FUTURE. Although we are unaware of any current competition for our BAFI(TM) product line, we expect competition to develop after we begin marketing our products. It is unknown at this time what impact any such competition could have on us. However, we are a "going concern" enterprise and it is certainly foreseeable that more than one competitor could emerge that is much stronger financially than we are and/or could already have significant marketing relationships for other medical devices. WE DO NOT HAVE INTERNATIONAL PATENTS. Although we have stated that we intend to apply for international patents for our BAFI(TM) product line, we have not as yet done so. We do not know when, and if, we will apply for such patents. If we do not apply for these patents, or if there are delays in obtaining the patents, or if we are unable to obtain the patents, we may not be able to adequately protect our technologies in foreign markets. IF WE ARE UNABLE TO PROTECT EFFECTIVELY OUR INTELLECTUAL PROPERTY, THIRD PARTIES MAY USE OUR TECHNOLOGY, WHICH COULD IMPAIR OUR ABILITY TO COMPETE IN OUR MARKETS. Our success will depend on our ability to obtain and protect patents on our technology and to protect our trade secrets. The patents we currently own, may not afford meaningful protection for our technology and products. Others may challenge our patents and, as a result, our patents could be narrowed, invalidated or unenforceable. In addition, our current and future patent applications may not result in the issuance of patents in the United States or foreign countries. Competitors might develop products similar to ours that do not infringe on our patents. In order to protect or enforce our patent rights, we may initiate interference proceedings, oppositions, or patent litigation against third parties, such as infringement suits. These lawsuits could be expensive, take significant time and divert management's attention from other business concerns. The patent position of medical firms generally is highly uncertain, involves complex legal and factual questions, and has recently been the subject of much litigation. No consistent policy has emerged from the U.S. Patent and Trademark Office or the courts regarding the breadth of claims allowed or the degree of protection afforded under biotechnology patents. In addition, there is a substantial backlog of applications at the U.S. Patent and Trademark Office, and the approval or rejection of patent applications may take several years. We cannot guarantee that our management and others associated with us will not improperly use our patents, trademarks and trade secrets. Further, others may gain access to our trade secrets or independently develop substantially equivalent proprietary information and techniques. OUR SUCCESS WILL DEPEND PARTLY ON OUR ABILITY TO OPERATE WITHOUT INFRINGING ON OR MISAPPROPRIATING THE PROPRIETARY RIGHTS OF OTHERS. -14- We may be sued for infringing on the patent rights or misappropriating the proprietary rights of others. Intellectual property litigation is costly, and, even if we prevail, the cost of such litigation could adversely affect our business, financial condition and results of operations. In addition, litigation is time consuming and could divert management attention and resources away from our business. If we do not prevail in any litigation, we could be required to stop the infringing activity and/or pay substantial damages. Under some circumstances in the United States, these damages could be triple the actual damages the patent holder incurs. If we have supplied infringing products to third parties for marketing or licensed third parties to manufacture, use or market infringing products, we may be obligated to indemnify these third parties for any damages they may be required to pay to the patent holder and for any losses the third parties may sustain themselves as the result of lost sales or damages paid to the patent holder. If a third party holding rights under a patent successfully asserts an infringement claim with respect to any of our products, we may be prevented from manufacturing or marketing our infringing product in the country or countries covered by the patent we infringe, unless we can obtain a license from the patent holder. Any required license may not be available to us on acceptable terms, or at all. Some licenses may be non-exclusive, and therefore, our competitors may have access to the same technology licensed to us. If we fail to obtain a required license or are unable to design around a patent, we may be unable to market some of our anticipated products, which could have a material adverse effect on our business, financial condition and results of operations. IF WE LOSE OUR KEY MANAGEMENT PERSONNEL, OUR PRODUCT DEVELOPMENT AND COMMERCIALIZATION EFFORTS WOULD SUFFER. Our performance is substantially dependent on the performance of our current senior management, Board of Directors and key scientific and technical personnel and advisers. The loss of the services of any member of our senior management, in particular Mr. Sand, our CEO and Chairman, Board of Directors, scientific or technical staff or advisory board may significantly delay or prevent the achievement of product development and other business objectives and could have a material adverse effect on our business, operating results and financial condition. WE HAVE NO COMMERCIAL PRODUCTION CAPABILITY YET FOR OUR BAFI(TM) PRODUCT LINE AND WE MAY ENCOUNTER PRODUCTION PROBLEMS OR DELAYS, WHICH COULD RESULT IN LOWER REVENUE. To date, we have not produced a BAFI(TM) product line product for sale. Customers for any potential products and regulatory agencies will require that we comply with current good manufacturing practices that we may not be able to meet. We may not be able to maintain acceptable quality standards if we ramp up production. To achieve anticipated customer demand levels, we will need to scale-up our production capability and maintain adequate levels of inventory. We may not be able to produce sufficient quantities to meet market demand. If we cannot achieve the required level and quality of production, we may need to outsource production or rely on licensing and other arrangements with third parties. This reliance could reduce our gross margins and expose us to the risks inherent in relying on others. We may not be able to successfully outsource our production or enter into licensing or other arrangements under acceptable terms with these third parties, which could adversely affect our business. WE HAVE NO MARKETING OR SALES STAFF, AND IF WE ARE UNABLE TO ENTER INTO COLLABORATIONS WITH MARKETING PARTNERS OR IF WE ARE UNABLE TO DEVELOP OUR OWN SALES AND MARKETING CAPABILITY, WE MAY NOT BE SUCCESSFUL IN COMMERCIALIZING OUR PRODUCTS. We currently have no sales, marketing or distribution capability. As a result, we will depend on collaborations with third parties that have established distribution systems and direct sales forces. To the extent that we enter into co-promotion or other licensing arrangements, our revenues will depend upon the efforts of third parties, over which we may have little or no control. If we are unable to reach and maintain agreement with one or more distribution entities or collaborators under acceptable terms, we may be required to market our products directly (direct marketing is one component of our marketing strategy). We may elect to establish our own specialized sales force and marketing organization to market our products. In order to do this, we would have to develop a marketing and sales force with technical expertise and with supporting distribution capability. Developing a marketing and sales force is expensive and time consuming and could delay a product launch. We may not be able to develop this capacity, which would make us unable to commercialize our products. IF WE ARE SUBJECT TO PRODUCT LIABILITY CLAIMS AND HAVE NOT OBTAINED ADEQUATE INSURANCE TO PROTECT AGAINST THESE CLAIMS, OUR FINANCIAL CONDITION WOULD SUFFER. If we are able to launch commercially our BAFI(TM) product line, we will face exposure to product liability claims. We have exposure selling Secure Balance(TM). We have limited product liability insurance coverage, but there is no guarantee that it is adequate coverage. There is also a risk that third parties for which we have agreed to indemnify could incur liability. -15- We cannot predict all of the possible harms or side effects that may result and, therefore, the amount of insurance coverage we obtain may not be adequate to protect us from all liabilities. We may not have sufficient resources to pay for any liabilities resulting from a claim beyond the limit of, or excluded from, our insurance coverage. A SUBSTANTIAL NUMBER OF SHARES WE HAVE ISSUED IN EXEMPT TRANSACTIONS ARE, OR ARE BEING MADE, AVAILABLE FOR SALE ON THE OPEN MARKET. THE RESALE OF THESE SECURITIES MIGHT ADVERSELY AFFECT OUR STOCK PRICE. Most of our common shares have been held by our shareholders for periods of one or two years or longer. Some of these shares have had restrictions lifted. The shares sold to Hope Capital, Inc. and others in the last part of fiscal year 2005 and in the first quarter of fiscal year 2006 were unrestricted common shares. We will undoubtedly have unrestricted shares issued in the future. There is no way to control the sale of these shares on the secondary market (we trade on the Pink Sheets and plan to go to the OTC BB in the near future). The resale of these unrestricted shares might adversely affect our stock price. OUR STOCK IS THINLY TRADED, WHICH CAN LEAD TO PRICE VOLATILITY AND DIFFICULTY LIQUIDATING YOUR INVESTMENT. The trading volume of our stock has been low, which can cause the trading price of our stock to change substantially in response to relatively small orders. In addition, during the last two fiscal years, our common stock has traded as low as .002 and as high as .285. Both volume and price could also be subject to wide fluctuations in response to various factors, many of which are beyond our control, including: o actual or anticipated variations in quarterly and annual operating results; o announcements of technological innovations by us or our competitors; o developments or disputes concerning patent or proprietary rights; and o general market perception of medical device and provider companies. IF THE OWNERSHIP OF OUR COMMON STOCK CONTINUES TO BE SOMEWHAT CONCENTRATED, IT MAY PREVENT YOU AND OTHER STOCKHOLDERS FROM INFLUENCING SIGNIFICANT CORPORATE DECISIONS AND MAY RESULT IN CONFLICTS OF INTEREST THAT COULD CAUSE OUR STOCK PRICE TO DECLINE. As of August 31, 2005, our executive officers, directors and their affiliates beneficially own or control approximately 20% of the outstanding shares of our common stock. Accordingly, our current executive officers, directors and their affiliates will have some control over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transactions. These stockholders may also delay or prevent a change of control of us, even if such a change of control would benefit our other stockholders. The concentration of stock ownership may adversely affect the trading price of our common stock due to investors' perception that conflicts of interest may exist or arise. WE MAY ISSUE PREFERRED STOCK IN THE FUTURE, AND THE TERMS OF THE PREFERRED STOCK MAY REDUCE THE VALUE OF YOUR COMMON STOCK. We are authorized to issue up to 40,000,000 shares of preferred stock in one or more series. Our Board of Directors will be able to determine the terms of preferred stock without further action by our stockholders. If we issue preferred stock, it could affect your rights or reduce the value of your common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with or sell our assets to a third party. These terms may include voting rights, preferences as to dividends and liquidation, conversion and redemption rights, and sinking fund provisions. WE HAVE NOT, AND CURRENTLY DO NOT ANTICIPATE, PAYING DIVIDENDS ON OUR COMMON STOCK. We have never paid any dividends on our common stock and do not plan to pay dividends on our common stock for the foreseeable future. We currently intend to retain future earnings, if any, to finance operations, capital expenditures and the expansion of our business. -16- ITEM 3. CONTROLS AND PROCEDURES We maintain disclosure controls and procedures designed to ensure that material information related to our company is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. (a) As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our CEO and CFO concluded, as of the date of such evaluation, that the design and operation of such disclosure controls and procedures were effective. (b) No significant changes were made in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter. (c) Limitations. Our management, including our CEO and CFO, does not expect that our disclosure controls or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected. PART II. - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We may from time to time become a party to legal proceedings arising in the ordinary course of business. Other than the lawsuit described above, we are not currently a party to any material pending litigation or other material legal proceeding. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES We sold $779,500 worth of our unrestricted common shares in a Regulation D, Rule 504 private placement offering (coupled with the Model Accredited Investor Exemption) in the first quarter of fiscal year 2006. All such shares were sold at $0.002 per share to 3 corporate purchasers as described above. It has been represented to us in the underlying contractual documentation that these purchasers are accredited investors as that term is defined in Regulation D of the Securities and Exchange Commission. The two firms purchasing the great bulk of these shares quickly divested them to many others (none of whom owns a controlling interest in the company), and, therefore, we are of the opinion that there is no change of control issue to report. -17- ITEM 6. EXHIBITS Exhibit No. Document Description - ----------- -------------------- 10.1 Template for Regulation D, Rule 504/MAIE common stock sales during the first quarter of our fiscal year 2006.* 31.1 Certification of Chief Executive Officer as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification of Chief Financial Officer as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32 Certification of Chief Executive Officer and Chief Financial Officer as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* - --------------- * Filed herewith. -18- SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INGEN TECHNOLOGIES, INC. November 30, 2005 /s/ Scott R. Sand ------------------------------------- Scott R. Sand Chief Executive Officer and Chairman November 30, 2005 /s/ Thomas J. Neavitt ------------------------------------- Thomas J. Neavitt Secretary and Chief Financial Officer -19- EX-10.1 2 ingen_10qex10-1.txt TEMPLATE FOR REGULATION D Exhibit 10.1 INVESTMENT CONTRACT ------------------- ACCREDITED INVESTORS ONLY: MAIE STATES AND CA A. PARTIES This agreement is entered into this ____ day of _____________, 2005, by and between INGEN TECHNOLOGIES, INC., a Georgia corporation and __________________, a resident or entity of ________________ ("subscriber"). B. RECITALS AND SUMMARY Ingen Technologies, Inc. ("COMPANY") intends to raise up to $1 million utilizing Rule 504 of Regulation D of the SEC in states that have adopted (at least in substantial form) the Model Accredited Investor Exemption ("MAIE"), plus California - under Corp. Code section 25102(n). Common shares purchased hereunder will be unrestricted shares. Management has no current plans to pay commissions or finders fees, but is not prohibited from so doing. The COMPANY is a "development stage enterprise" with no significant operating history and no sales of its products to date. Mr. Scott R. Sand is CEO and Chairman of the COMPANY and should be contacted by prospective investors desiring more information concerning this investment opportunity. The COMPANY is competing in the electronic medical monitoring device industry against competitors with superior track records and resources. This is a HIGH RISK INVESTMENT that should be undertaken only by accredited, sophisticated people with the means to risk loss of the entire investment. Those persons or entities domiciled in the following states are eligible to participate in this AGREEMENT: Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Indiana, Kansas, Kentucky, Maine, Maryland, Nevada, New Jersey, New Mexico, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin. The amount of investment in this AGREEMENT is $_______________, for the purchase of __________________ shares of unrestricted COMPANY common shares (to be issued by the COMPANY'S Transfer Agent ASAP upon receipt of funds). Payment must be received within five business days of the date first written above. C. OTHER TERMS OF THE CONTRACT This offering is limited to qualified persons and entities who are accredited as defined by federal law (Regulation D of the Securities and Exchange Commission). Subscribers must have the experience, knowledge and sophistication to ascertain the suitability of this investment opportunity in relation to their own needs and/or have a pre-existing personal, family or business relationship with management and/or its officials. -1- There is no impound amount in this offering. All proceeds from this stock offer and purchase hereunder will go directly into the COMPANY's bank account to be utilized as contained below. Prospective investors should realize that additional investment may be required before the COMPANY is able to begin the manufacture and sale of its proprietary products. There is no guarantee the COMPANY will be able to raise enough funds in this or some other offering enabling it to progress beyond its current developmental stage of operation. D. COMPLIANCE WITH SECURITIES LAWS The parties understand that this Agreement is in the nature of a "security" as defined under applicable state and federal law. This is primarily because the investment provided for herein is in the nature of a "passive investment" wherein subscriber is providing funds for the COMPANY through purchase of common stock, but not participating in the active management of the funds. It is understood that this Agreement will not be registered with any state or federal securities regulatory authority and that the parties are relying upon exemptions from registration under state and federal law, or, the parties are relying on a federal law "private placement" exemption that pre-empts state law. No state or federal securities regulator has read or passed upon the merits or adequacy of this Agreement. E. ESTIMATED USE OF PROCEEDS Funds will be utilized for engineering, tooling, marketing and inventory production of the COMPANY's product OxyAlert and for general and administrative expenses. Management should be contacted directly for more specific information regarding OxyAlert and the COMPANY's operation. F. ALLOCATIONS AND PROFIT PARTICIPATION The COMPANY has no current dividend policy in place. The COMPANY is a development stage COMPANY and there are no plans to pay shareholder dividends until and if the COMPANY progresses to the point of generating sales revenues beyond that needed to operate and grow the COMPANY. G. MANAGEMENT The resume of Mr. Sand is attached hereto. Other officers and directors of the COMPANY (as well as additional information about the COMPANY and its business) can be found on the COMPANY's website: www.Ingen-Tech.com. H. COMPENSATION, STOCK OWNERSHIP OF MANAGEMENT Management is compensated as follows: (include name, position, monthly salary or fee) Management owns stock in the COMPANY as follows: (include name, position, number of shares owned and optioned) -2- I. SALE OF COMPANY STOCK BY MANAGEMENT Management will market the unrestricted common stock offered hereby. Management will not pay itself commissions regarding these sales. Management has no current plans to pay commissions or finders fees to third parties regarding the sale of stock herein, but reserves the right to pay such reasonable compensation if necessary (in the sound discretion of Management). The payment of any compensation for sale of the COMPANY's securities will reduce the amount of proceeds available for the uses as mentioned above. J. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The COMPANY represents and warrants that it is properly formed and in good standing in the state of Georgia. The COMPANY represents and warrants that Management will use its best efforts to raise or otherwise provide enough funding to move the COMPANY out of its developmental stage. Management will conduct all business on behalf of the COMPANY in a professional and timely manner. The COMPANY represents and warrants that it has the legal right to develop, manufacture and sell its products. K. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER ("THE UNDERSIGNED") 1. The undersigned has received and carefully reviewed, and is familiar with this Agreement and all material incorporated by reference herein, all amendments and attachments delivered herewith. In evaluating the suitability of an investment in this Agreement, the undersigned has not relied upon any representations or other information (whether oral or written) from the COMPANY, its officers, directors, managers or employees other than as set forth in the Agreement and other delivered materials. 2. The undersigned has such knowledge and experience in financial and business matters that he/she is capable of evaluating the merits and risks of the prospective entrance into this Agreement. 3. The undersigned has obtained, to the extent he/she deems necessary, his/her own personal professional advice with respect to the risks inherent in the investment in this Agreement, and the suitability of the investment in light of his/her financial condition and investment needs. 4. The undersigned believes that the investment in this Agreement is suitable for him/her based upon his/her investment objectives and financial needs, and the undersigned is accredited and has adequate means of providing for his/her current financial needs and personal contingencies and has no need for liquidity of investment with respect to this Agreement. 5. The undersigned has been given access to full and complete information regarding the COMPANY, its Management and business plan, and has utilized such access to his/her/its satisfaction, or waived the opportunity to do so, for the purpose of asking questions and receiving answers concerning the terms and conditions of this Agreement, obtaining information in addition to, or verifying information included in, this Agreement, and obtaining any of the documents or information described herein. The undersigned has either attended or been give reasonable opportunity to attend a meeting with representatives of the COMPANY for the purpose of asking questions of, and receiving answers from, such representatives concerning the terms and conditions of this Agreement and to obtain any additional information, to the extent reasonably available, necessary to verify the accuracy of information provided in this Agreement. -3- 6. The undersigned recognizes that the COMPANY has a limited operating history, and that entry into this Agreement as an investment involves a high degree of risk including, but not limited to, the risk of economic losses from operations of the COMPANY and the risks involved in developing, producing, marketing an electronic medical monitoring device. 7. The undersigned realizes that although he/she/it is receiving unrestricted common COMPANY shares, that there is no public market for the shares and no guarantee that the there will ever be a public market for the shares. The price of the shares has been arbitrarily established by Management without regard to the financial condition of the COMPANY. 8. The undersigned acknowledges that the COMPANY and its affiliates have not retained counsel to provide its prospective investors with representation in connection with this offering. The undersigned also acknowledges that he/she/it understands that (i) no counsel has undertaken any independent due diligence investigation of the facts and circumstances relating to this offering, and (ii) he/she/it must assume responsibility for his/her/its own due diligence investigation, and (iii) the protection afforded by a complete due diligence investigation of counsel is not present in this offering. 9. The undersigned acknowledges that he/she/it understands the risk that insufficient capital will be raised in this offering or in any subsequent offering or financing to assist in accomplishing the COMPANY's goals; and that there is absolutely no assurance that (a) the COMPANY will complete this private offering of its stock; (b) that the COMPANY will be able to operate profitably. Further, the undersigned acknowledges that if the COMPANY is unable to successfully conclude this offering, any other private offering or obtain other financing, the COMPANY (and, therefore, the undersigned) would suffer a substantial loss which may result in the COMPANY not being able to develop and market the COMPANY's product or product line. 10. The undersigned has been advised that this Agreement has not being registered under the Act or the relevant state securities law, but are being offered and sold pursuant to exemptions from such registrations, and that the COMPANY's reliance upon such exemptions is predicated partly on the undersigned's representations to the COMPANY as contained herein. 11. The undersigned represents and warrants that he/she/it is a bona fide resident of, and is domiciled in, the State of ________________ (one of the states listed as a MAIE state herein, or California), and that his/her/its entry into this Agreement by him/he/it in his/her/its name solely for his/her/its own beneficial interest and not as nominee for, or on behalf of, or for the beneficial interest of, or with the intention to transfer to, any other person, trust, or organization. 12. The undersigned is informed of the significance to the COMPANY of the foregoing representations, and such representations are made with the intention that the COMPANY will rely on the same. The undersigned shall indemnify and hold harmless the COMPANY, its officers, directors, managers and agents against any losses, claims, damages, or liabilities to which they, or any of them, may become subject insofar as such losses, claim, damages, or liabilities (or actions in respect thereof) arise from any misrepresentation or misstatement of facts or omission to represent or state facts made by the undersigned to the COMPANY concerning the undersigned or the undersigned's financial position in connection with the offering or sale of the Securities. -4- 13. The undersigned, if other than an individual, makes the following additional representations and warranties: a. The undersigned was not organized for the specific purpose of entering into this Agreement. b. The execution of this Agreement has been duly authorized by all necessary action on the part of the undersigned, has been duly executed by the authorized officer or representative of the undersigned, and is a legal, valid and binding obligation of the undersigned enforceable in accordance with its terms. 14. The undersigned, if executing this Agreement in a representative or fiduciary capacity, (ii) represents that he/she/it has full power and authority to execute and deliver this Agreement on behalf of the subscribing individual, partnership, trust, estate, corporation, or other entity for whom the undersigned is executing this Agreement, and such individual, partnership, trust, estate, corporation, or other entity has full right and power to perform pursuant to such Agreement and become a shareholder of the COMPANY and (ii) acknowledges that the representations and warranties contained herein shall be deemed to have been made on behalf of the person or persons for whom the undersigned is so purchasing. 15. If applicable, the undersigned represents that if he/she/it is a "non-U.S. person" (residing outside of the United States) and that he/she/it will hold the securities for a period of at least one year before selling or otherwise transferring the securities to a "U.S. person" (residing within the United States) as required by Regulation S of the United State Securities and Exchange Commission. 16. Confidentiality. a. The provisions of this Agreement are confidential and private and are not to be disclosed to outside parties (except on a reasonable need to know basis only) without the written and express, advance consent of all parties hereto. b. Subscriber agrees and acknowledges that in his/her/its association with the COMPANY under this Agreement, he/she/it may come into possession or knowledge of confidential and/or proprietary information. Such confidential and/or proprietary information includes, but is not limited to: information regarding agents, contractors, employees and all affiliates of which the COMPANY possesses an ownership interest of ten percent (10%) or greater; corporate and/or financial information and records of or any client, customer or associate of the COMPANY; customer information; client information; shareholder information; business contacts; investor leads and contacts; employee information; documents regarding the COMPANY's website and any product, business plan or presentation materials of the COMPANY. Subscriber represents and warrants to the COMPANY that he, she or it will not divulge confidential, proprietary information of the COMPANY or any of its subsidiaries to anyone or anything without the written and express, advance consent of the COMPANY, and further represents and warrants that he, she or it will not use any proprietary information of the COMPANY for his or her or its or anyone else's gain or advantage at any time during or after the Term of this Agreement. -5- L. PRODUCT INFORMATION Information concerning the COMPANY'S products maybe obtained online at the COMPANY'S website as mentioned above, or by contacting Management. M. REPORTS TO SHAREHOLDERS Shareholders will receive annual reports from Management containing pertinent COMPANY business information. Shareholders, under law, have a right of inspection of the books of the COMPANY for certain limited purposes. N. LITIGATION, LEGAL MATTERS Management has no information leading it to believe that litigation is imminent or planned by anyone with respect to the COMPANY. O. ACCESS TO INFORMATION Prospective shareholders have the right to request additional information relative to this private placement of securities and Management, to the extent it can reasonably and affordably supply the same, has the duty to supply the same in a timely manner. P. MISCELLANEOUS LEGAL CONSIDERATIONS 1. Modifications and Amendments. The terms and conditions of this Agreement may be amended at any time and from time to time, in whole and in part, upon written agreement signed by a duly authorized officer of the COMPANY and subscriber. 2. Expenses. Each party shall bear its own respective costs, fees and expenses associated with entering into and executing its duties under this Agreement. 3. Indemnification. Each party, if an offending party, agrees to indemnify and hold harmless all other parties from any claim of damage of any party or non-party arising out of any act or omission of the offending party arising from this Agreement. 4. Notices. Any notice, request, proposal, statement or other communication required or permitted to be given hereunder shall be in writing and shall be deemed given when personally delivered or confirmed by facsimile or ten (10) days after mailed by certified mail, postage prepaid, to the parties at their respective addresses first set forth above or to such other address of which a party shall have theretofore notified the other by a notice given in accordance with this Paragraph, together with a courtesy copy to the receiving party's counsel, as follows: If to the COMPANY: - ----------------- Ingen Technologies, Inc. 285 E. County Line Rd. Calimesa, CA 92320 -6- If to Subscriber: - ----------------- 5. Breach. In the event of a breach of this Agreement, the breaching party shall be notified by the other party by written notice pursuant to the Notices Paragraph herein within ten (10) days of reasonable discovery of the breach. Upon notice so given, the breach shall be corrected within fifteen (15) days. If the breach is not corrected within this period, the non-breaching party may take appropriate legal action consistent with the terms of this Agreement. 6. Assignment. The provisions of this Agreement shall be binding upon and inure to the benefit of the COMPANY and Subscriber and their respective successors, assigns and personal representatives. If the COMPANY shall at any time be merged or consolidated into or with any other corporation or if the COMPANY's stock or substantially all of its assets are transferred to another corporation, the provisions of this Agreement shall be binding upon and inure to the benefit of Subscriber and the corporation resulting from such merger or consolidation or to which such capital stock or assets shall be transferred, and this provision shall apply in the event of any subsequent merger, consolidation or transfer. 7. Entire Agreement. This Agreement is the full and complete, integrated agreement of the parties, merging and superseding all previous written and/or oral agreements and representations between the parties, and is amendable only as provided for herein. 8. Governing Law. This Agreement shall be governed by the laws of the State of California applicable to contracts made to be performed entirely therein, and each party agrees to submit to the personal jurisdiction of any Court of competent jurisdiction in _________________ County and to all the rules and orders of such Court, and the laws of the State of California. 9. Waiver. Any waiver by either party of any provision of this Agreement or any right hereunder shall not be deemed a continuing waiver and shall not prevent or estop such party from thereafter enforcing such provision, and the failure of either party to insist in any one or more instances upon the strict performance of any of the provisions of this Agreement by the other party shall not be construed as a waiver or relinquishment for the future performance of any such term or provision, but the same shall continue in full force and effect. 10. Enforcement. If the parties cannot settle any dispute arising out of or relating to this Agreement, or the breach thereof, in a reasonable and timely fashion, either party may file for binding arbitration (as the exclusive means of dispute resolution) within ___________________ County, California. Arbitration shall be governed by the rules of the American Arbitration Association and judgment upon the award may be entered in any Court having jurisdiction thereof. The arbitrator(s) may award reasonable attorneys fees and costs to the prevailing party. However, the parties agree to reserve the right to obtain a preliminary injunction from a court of competent jurisdiction if necessary in the event of a material breach arising from this Agreement. -7- 11. Headings. The headings in this Agreement are solely for convenience of reference and shall not affect its interpretation. 12. Possible Invalidity. In case any provision of this Agreement should be held to be contrary to, or invalid under, the law of any country, state or other jurisdiction, such illegality or invalidity shall not affect in any way any of the other provisions hereof, this Agreement in such event to be construed as though the offending provision had been deleted or modified in such a manner as to make it enforceable to the maximum extent possible to reflect the parties' intent hereunder, and all of the provisions hereof nevertheless shall continue unmodified and in full force and effect in any country, state or jurisdiction in which such provisions are legal and valid. 13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement. Facsimile signatures shall be considered as valid and binding as original signatures. 14. Independent Covenants: Each of the respective rights and obligations of the parties hereunder shall be deemed independent and may be enforced independently irrespective of any of the other rights and obligations set forth herein. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above. - ------------------------------------- ------------------------------------- INGEN TECHNOLOGIES, INC. SUBSCRIBER By: Scott R. Sand, CEO & Chairman -8- EX-31.1 3 ingen_10qex31-1.txt SECTION 302 CERTIFICATION OF CEO Exhibit 31.1 CERTIFICATION I, Scott R. Sand, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Ingen Technologies, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's Board of Directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: November 30, 2005 /s/ Scott R. Sand --------------------------------------------------- Scott R. Sand, Chief Executive Officer and Chairman EX-31.2 4 ingen_10qex31-2.txt SECTION 302 CERTIFICATION OF CFO Exhibit 31.2 CERTIFICATION I, Thomas J. Neavitt, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Ingen Technologies, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's Board of Directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: November 30, 2005 /s/ Thomas J. Neavitt ---------------------------------- Thomas J. Neavitt, Secretary and Chief Financial Officer EX-32 5 ingen_10qex-32.txt SECTION 906 CERTIFICATION OF CEO & CFO Exhibit 32 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Ingen Technologies, Inc. (the "Company"), that, to his knowledge, the Quarterly Report of the Company on Form 10-QSB for the period ended August 31, 2005, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company as of the dates and for the periods presented in the financial statements included in such report. Dated: November 30, 2005 /S/ Scott R. Sand -------------------------------------- Scott R. Sand, Chief Executive Officer and Chairman Dated: November 30, 2005 /S/ Thomas J. Neavitt -------------------------------------- Thomas J. Neavitt, Secretary and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----