U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1998
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number 0-21279
THERMACELL TECHNOLOGIES, INC.
-----------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
FLORIDA 59-3223708
------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5419 Provost Dr., Holiday, FL 34690
-----------------------------------
(Address of Principal Executive Offices)
(813) 938-3269
--------------
(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 a
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
--- ---
The number of shares outstanding of the Issuer's Common Stock, $.0001 Par
Value, as of March 31, 1998 was 3,375,578.
Transitional Small Business Disclosure Format:
Yes No X
--- ---
<PAGE>
THERMACELL TECHNOLOGIES, INC.
Index
Page
----
Part I - Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets -
September 30, 1997 and March 31, 1998...................... 1 - 2
Consolidated Statements of Operations -
Three months and six months ended March 31, 1997 and 1998.. 3
Consolidated Statements of Cash Flows -
Six months ended March 31, 1997 and 1998................... 4
Notes to Consolidated Financial Statements................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 6 - 9
Part II - Other Information
Item 1. Legal Proceedings............................................. 10
Item 5. Other Information............................................. 10
Item 6. Exhibits and Reports on Form 8-K.............................. 10
Signatures................................................... 10
Exhibit 11............................................................ 11
i
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
Assets
<TABLE>
<S> <C> <C>
March 31, September 30,
1998 1997
------------------ ------------------
------------------ ------------------
(unaudited)
Current assets
Cash $ 880,565 $ 580,522
Accounts receivable, net 362,956 384,351
Other 4,569 1,676
Inventories 520,410 410,972
Prepaid expenses and other 35,939 8,886
Prepaid stockholder relations expenses 222,917 -
------------------ ------------------
------------------ ------------------
Total current assets 2,027,356 1,386,407
------------------ ------------------
------------------ ------------------
Property and equipment 852,340 697,671
Less accumulated depreciation 149,731 86,773
------------------ ------------------
------------------ ------------------
702,609 610,898
------------------ ------------------
------------------ ------------------
Other assets
Deposits 16,389 14,795
Deferred income tax benefit, net 667,249 631,372
Goodwill, net 849,286 819,199
Other intangibles, net 105,512 80,004
------------------ ------------------
------------------ ------------------
1,638,436 1,545,370
------------------ ------------------
------------------ ------------------
Total assets $ 4,368,401 $ 3,542,675
================== ==================
================== ==================
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
Liabilities and Stockholders' Equity
<TABLE>
<S> <C> <C>
March 31, September 30,
1998 1997
------------------ ------------------
------------------ ------------------
(unaudited)
Current liabilities
Accounts payable $ 450,954 $ 551,572
Accrued expenses 170,463 277,192
Accrued payroll and payroll taxes - 187,321
Current maturities of long-term debt
Notes payable 11,912 18,434
Capital leases 12,882 16,977
------------------ ------------------
------------------ ------------------
Total current liabilities 646,211 1,051,496
------------------ ------------------
------------------ ------------------
Long-term debt, net of current maturities
Notes payable 38,300 41,856
Capital lease obligations 26,599 21,233
------------------ ------------------
------------------ ------------------
Total long-term debt, net of current maturities 64,899 63,089
------------------ ------------------
------------------ ------------------
Total Liabilities 711,110 1,114,585
------------------ ------------------
------------------ ------------------
Stockholders' equity
Preferred stock, par value $.0001
5,000,000 shares, authorized, issued
and outstanding 500 500
Preferred stock, Series B convertible, $1,000 stated value, 8% dividend
Authorized 1,500 shares,
1,250 outstanding March 31, 1998 1,250,000 -
Common stock, par value $.0001
Authorized 20,000,000 shares,
3,375,578 And 3,021,139 issued and outstanding, respectively 338 301
Additional paid-in capital 5,595,809 5,564,319
Deduct notes receivable associated with stockholder loan (442,629) (550,460)
Accumulated deficit (2,746,727) (2,586,570)
------------------ ------------------
------------------ ------------------
Total stockholders' equity 3,657,291 2,428,090
------------------ ------------------
------------------ ------------------
Total liabilities and stockholders' equity $ 4,368,401 $ 3,542,675
================== ==================
================== ==================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
-------------------------------- -------------------------------
<S> <C> <C> <C> <C>
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
-------------- ------------ ------------- -----------
Revenue
Sales $ 712,347 $ 210,156 $ 1,470,631 $ 403,543
Less cost of sales 474,147 105,263 966,856 236,811
-------------- ------------ ------------- -----------
Gross profit 238,200 104,893 503,775 166,732
Selling, general and administrative
expenses 408,424 294,315 748,069 729,365
-------------- ------------ ------------- -----------
Loss from operations (170,224) (189,422) (244,294) (562,633)
-------------- ------------ ------------- -----------
Other income (expense)
Commissions - (23,333) - (34,883)
Interest income 13,080 7,421 25,066 7,421
Interest expense (2,215) (64,995) (6,894) (97,725)
Other 45,045 - 46,740 (2,310)
-------------- ------------ ------------- -----------
Total other income (expense) 55,910 (80,907) 64,912 (127,497)
-------------- ------------ ------------- -----------
Loss before income taxes (114,314) (270,329) (179,382) (690,130)
Income taxes
Deferred income tax benefit 22,863 49,561 35,877 106,636
-------------- ------------ ------------- -----------
Net loss $ (91,451) $ (220,768) $ (143,505) $ (583,494)
============== ============ ============= ===========
Basic loss per common share $ (0.03) $ (0.14) $ (0.05) $ (0.49)
============== ============ ============= ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
----------------------------------
March 31, March 31,
1998 1997
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Reconciliation of net loss to net cash
used in operating activities
Net loss $ (160,157) $ (583,493)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation 62,958 18,404
Amortization 40,746 31,651
Deferred income tax benefit (35,877) (105,618)
(Increase) decrease in accounts and notes receivable 21,395 (10,642)
(Increase) in inventories (109,438) (64,172)
(Increase) in prepaid and other assets (254,457) (23,801)
Increase (decrease) in accounts payable (100,618) 310,370
Increase (decrease) in accrued expenses (294,050) 410,107
--------------- ---------------
Net cash used in operating activities (829,498) (17,194)
--------------- ---------------
Cash flows from investing activities
Capital expenditures (154,669) (63,494)
Capital expenditure acquisitions, goodwill (66,340) -
Expenditures for patent, net (30,000) (51,172)
--------------- ---------------
Net cash used in investing activities (251,009) (114,666)
--------------- ---------------
Cash flows from financing activities
Proceeds from issuance of common stock 81,526 5,023,803
Proceeds from issuance of Series B preferred stock 1,500,000 -
Proceeds from issuance of notes payable - 135,000
Principal payments on notes payable (8,807) (1,210,477)
Principal advances on stockholder loan - (300,545)
Proceeds from payments on stockholder loan 107,831 -
Costs associated with obtaining financing (300,000) -
--------------- ---------------
Net cash provided by financing activities 1,380,550 3,647,781
--------------- ---------------
--------------- ---------------
Net increase in cash 300,043 3,515,921
Cash beginning 580,522 24,278
--------------- ---------------
Cash ending $ 880,565 $ 3,540,199
=============== ===============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of presentation
The accompanying unaudited consolidated financial statements, which are for
interim periods, do not include all disclosures provided in the annual
consolidated financial statements. These unaudited financial statements should
be read in conjunction with the financial statements and the footnotes thereto
contained in Form 10-KSB for the fiscal period ended September 30, 1997 of
ThermaCell Technologies, Inc. (the "Company"), as filed with the Securities and
Exchange Commission.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (which are of a normal and recurring nature) necessary
for a fair presentation of the financial statements. The results of operations
for the three months and six months ended March 31, 1998 and March 31, 1997 are
not necessarily indicative of the results to be expected for the full year.
Note 2 - Basic loss per share calculations
<TABLE>
<CAPTION>
For the Quarter Ending March 31, 1998 For the Quarter Ending March 31, 1997
------------------------------------------ -------------------------------------------
------------------------------------------ -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
------------- -------------- ------------- ------------- --------------- -------------
------------- -------------- ------------- ------------- -----------------------------
Net Loss $ (91,451) $ (220,768)
Less: Preferred stock dividends 16,652
------------- -------------- ------------- ------------- --------------- -------------
------------- -------------- ------------- ------------- --------------- -------------
Income available to common
shareholders (108,103) 3,153,568 (220,768) 1,533,166
Effect of exercise of Options 466,667
------------- -------------- ------------- ------------- --------------- -------------
------------- -------------- ------------- ------------- --------------- -------------
Income available to common
shareholders $ (108,103) 3,620,235 $ (0.03) $ (220,768) 1,533,166 $ (0.14)
============= ============== ============= ============= =============== =============
============= ============== ============= ============= =============== =============
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ending March 31, 1998 For the Six Months Ending March 31, 1997
-------------------------------------------- -----------------------------------------
-------------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
------------- -------------- --------------- ------------ -------------- -------------
------------- -------------- --------------- ------------ -------------- -------------
Net Loss $ (143,505) $ (583,494)
Less: Preferred stock dividends 16,652 -
Income Available to common (160,157) 3,145,415 (583,494) 1,201,507
------------- -------------- --------------- ------------ -------------- -------------
------------- -------------- --------------- ------------ -------------- -------------
shareholders
Effect of exercise of Options 233,333
------------- -------------- --------------- ------------ -------------- -------------
------------- -------------- --------------- ------------ -------------- -------------
Income available to common
shareholders $ (160,157) 3,378,748 $ (0.05) $ (583,494) 1,201,507 $ (0.49)
============= ============== =============== ============ ============== =============
</TABLE>
Note 3 - Accounting Change
The Company adopted Statement of Accounting Standards #128, Earnings per Share,
during the quarter ended December 31, 1997. Since the Company has reported a
loss only the basic earnings (loss) per share is required. The inclusion of
converted preferred shares in the calculation of weighted average shares for
diluted earnings per share purposes would be anti-dilutive and per FASB 128,
cannot be included in the financial statements.
5
<PAGE>
THERMACELL TECHNOLOGIES, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Form 10-QSB contains forward looking information and statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Actual results could differ materially from
those projected in the forward looking statements contained in this Form 10-QSB.
GENERAL
The Company was incorporated in Florida in August, 1993, for the purpose of
developing, manufacturing and marketing insulating materials and coatings using
partially evacuated glass microspheres ("shells"). The Company's technology
utilizes the insertion of the shells in various materials and products that
improve the thermal resistive characteristics of such products.
The Company's business strategy is to (i) expand the marketing and distribution
of ThermaCool(TM) paints and coatings, (ii) develop and manufacture the
Company's own shells and (iii) expand the shell technology to other products,
such as drywall, gypsum board, home siding materials, and space foam insulation,
among others.
On November 30, 1995, the Company acquired the assets of C.F. Darling Paint &
Chemicals, Inc., a paint manufacturing company, located in New Port Richey,
Florida. The Company acquired these assets so that it would have a facility to
produce and develop paints and coatings for its ThermaCool(TM) product line.
On March 19, 1998, the Company completed a public offering for 1,375,000 Units,
each Unit consisting of one share of Common Stock, $.0001 par value, and one
Series A Redeemable Common Stock Purchase Warrant, at a price of $4.00 per Unit.
In addition, the underwriter exercised its over-allotment purchase option and
purchased 206,250 additional Units at the initial per Unit public offering price
less the underwriting discounts and commission.
On July 28, 1998, the Company acquired all the outstanding common stock,
representing 100% ownership of Atlas Chemical Company, a paint manufacturer and
distributor, located in Miami, Florida. The Company acquired this firm so that
it would have a larger manufacturing facility to both expand production of
coatings and to obtain an established marketing distribution channel which
included major accounts such as Builders Square, Ace Hardware, Lowes, among
others.
On March 2, 1998, the Company acquired the assets of Ladehoff Paint
Manufacturing Co., Inc. of Mesa, Arizona for $115,000. This acquisition included
property and equipment, inventory and goodwill along with its tradename. No
liabilities were acquired in this acquisition.
The Company has sustained significant operating losses since its inception.
Management's strategy of expanding the ThermaCool(TM) product line, developing a
commercially viable manufacturing process for shells and expansion into new
markets for its shell technology may result in the Company incurring additional
losses due to the costs associated with these strategies. The Company expects to
incur losses until it is able to increase its sales, expand its product line and
increase its distribution capabilities to a sufficient revenue level to offset
ongoing operating and expansion costs. To-date, the Company has realized some
operating benefits with this strategy.
6
<PAGE>
RESULTS OF OPERATIONS
Three months ended March 31, 1998 compared to Three months ended March 31, 1997
Total revenues for the three months ended March 31, 1998 was $712,347 compared
to $210,156 for the same period of 1997, which represents an increase of
$502,191 or 239%. The increase was a result of both expanded sales of paint
products and coatings produced by the Company's paint manufacturing facility and
the sales contribution for the period of the Atlas Chemical Co. operation.
Gross profit margins were 33.4% and 49.9%, respectively, for the three-month
period ending March 31, 1998 as compared to the prior period ending March 31,
1997. This decrease is the result of a change in mix of paint and coatings
products sold by the Company and the continuing lower margin contribution of
Atlas Chemical. It is expected that with the higher levels of materials
purchases, economies of scale from the combined business will allow the Company
to benefit from higher gross profit margins in the future.
For the three months ended March 31, 1998, total selling, general and
administrative expenses were $408,424, as compared to $294,315 for the same
period of the previous year, an increase of $114,109, or 39%. This increase was
due to higher expenses incurred by the company in marketing, staffing and other
expenses associated with the Company's operations together with the additional
costs for S,G & A of the Atlas Chemical operation. The Company has taken steps
to reduce duplication of personnel and is in the process of consolidating its
staffing, marketing, and production for more efficient and effective business
operations that will be completed within the third quarter of this fiscal year.
The Company continued to experience a loss from operations of $170,224 for the
period ending March 31, 1998 as compared to a loss of $189,422 for the same
prior year period. The higher consolidated gross profit for this period was
offset, in part, by a higher level of S, G & A expense incurred during this
three month period that contributed to the lower operating loss. Management
anticipates that further increasing levels of sales, including continuing
contributions from Atlas Chemical and its recently acquired Ladehoff Paint
Manufacturing businesses, will result in improvement in future operating
performance.
Other income for the recent period ended March 31, 1998 included interest income
of $13,080 from the Company's cash balance at its bank that was 76% higher than
the previous year ago period. In addition, the Company benefited from a
settlement of an outstanding account payable that provided a one-time income
benefit of $45,045 for this period. The year ago period was adversely effected
by a commission expense relating to bridge financing prior to the Company's
successful public offering completed in March 1997. There was $2,215 of interest
expense in the present period as compared to $64,995 in the prior year's
quarter. The expense for the year ago period reflected the bridge loans that
were outstanding during that time and the resultant interest charges for that
debt.
Based upon management's current estimates of future taxable income, management
has determined that a valuation allowance of fifty percent (50%) is appropriate
during the current period ending March 31, 1998 to represent that portion of
deferred taxes that may be realized in the future.
The net loss, after income taxes benefit but before dividends on preferred
stock, and net loss per share was $91,451 for the three months ended March 31,
1998 as compared to a net loss of $220,768 for the same period in 1997. During
February 1998, the Company completed a placement of preferred stock bearing an
8% dividend. The dividend on this outstanding issue was $16,652 for the quarter.
There was no preferred stock bearing a dividend outstanding in the year ago
period. The basic earnings or net loss after dividends on preferred stock, and
the basic per share earnings or net loss attributable to common shares was
$108,103 and $0.03 for the three months ended March 31, 1998 as compared to a
net loss of $220,768 and $0.14 on the same basis for the same period in 1997.
7
<PAGE>
Six months ended March 31, 1998 compared to six months ended March 31, 1997
Total revenue for the six months ended March 31, 1998 was $1,470,631 compared to
$403,543 for the same period of 1997, which represents an increase of
$1,067,088, or 264%. The increase was primarily the result of the contribution
of the Atlas Chemical that expanded the sales of paint products and coatings
produced by the Company.
Gross profit margins were 34% and 41%, respectively, for the present six month
period ending March 31, 1998 as compared to the prior period ending March 31,
1997. This decrease was the result of a change in mix of paint and coatings
products sold with the lower margined products, principally from the Atlas
product line, contributing more significantly during the period.
For the six months ended March 31, 1998, total selling, general and
administrative expenses were $748,069, as compared to $729,365 for the same
period of the previous year, an increase of approximately $18,704, or 3%. This
slight increase is the result of the Company's efforts to control its overhead
expense within the consolidation of its existing operations with the Atlas
business.
The Company continued to experience a loss from operations of $244,294 for the
period six month ending March 31, 1998 as compared to a loss of $562,633 for the
same prior year period. The gross profit increase over the prior period was
$337,043, or 202%, primarily resulting from the profit contribution of higher
revenues as compared to the year ago period. This higher margin contribution,
while maintaining S G & A expense, resulted in a lower reported loss from
operations for the period. Management anticipates that further increases in
sales while controlling its S G & A expense levels, will result in an
improvement in its future operating performance.
Based upon management's current estimates of future taxable income, management
has determined that a valuation allowance of fifty percent (50%) is appropriate
during the current period ending March 31, 1998 to represent that portion of
deferred taxes that may be realized in the future.
The net loss, after income taxes benefit but before dividends on preferred
stock, and net loss per share was $179,382 for the six months ended March 31,
1998 as compared to a net loss of $690,130 for the same period in 1997. This
represented a reduction in the loss of $510,748 for this period as compared to
the year before six-month period ended March 31, 1997. During February 1998, the
Company completed a placement of preferred stock bearing a 8% dividend. The
dividend on this outstanding issue was $16,652 for this current six-month
period. There was no preferred stock bearing a dividend outstanding in the year
ago period. The basic earnings or net loss after preferred dividends on
preferred stock, and the basic per share earnings or net loss attributable to
common shares was $160,157 and $0.05 for the six months ended March 31, 1998 as
compared to a net loss of $583,494 and $0.49 on the same basis for the same
period in 1997.
This current six-month period loss per share was lower, in part, because of the
effect of more common shares outstanding. During these two comparable periods,
the weighted average shares outstanding increased from 1,201,507 to 3,378,748.
This increase is directly attributed to the Company's successful underwriting
that was concluded in March 1998, the conversion of convertible preferred stock
into common stock, and the dilutive effect of exercisable stock options.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company has funded its operations and product development
activities with capital provided by issuing securities and from borrowings.
During the six months ending March 31, 1998, the Company raised approximately
$1.3 million through the placement of convertible preferred stock, after related
expenses.
8
<PAGE>
On February 19, 1998, the Company completed an offering of 1,500 shares of
Series B Preferred Stock to Thomson Kernaghan & Co., Ltd. pursuant to Regulation
S. The principal placement agent for the offering was London Select Enterprises,
Ltd. The total offering price for the Series B Preferred Stock was
$1,500,000.00. This preferred issue has an 8% yield. This placement allows the
holder to convert such preferred stock into the Company's common stock at the
lower of the common stock bid price five days prior to funding or five days
prior to exercise of the conversion election. As of March 31, 1998, $250,000 of
preferred stock was converted into 195,369 shares of common stock, including
dividends paid in common stock.
The Company will continue to focus its marketing efforts within the Sunbelt
Region of the United States to increase consumer awareness and acceptance of
both its existing and new products. In addition to this marketing effort, the
Company has expanded its manufacturing capabilities at its Miami location that
will enable it to produce higher production volumes.
For the six month period ended March 31, 1998, the Company's net cash used in
operating activities was $829,498 in the current period compared with $17,194
used in operating activities in the comparable period last year. In this period,
cash used in operating activities principally resulted from supporting its net
loss and the expansion of accounts receivables, inventory and other assets while
reducing accounts payable and accrued expenses.
Net cash used in investing activities for the six month period ended March 31,
1998 was $251,009 as compared to $114,666 in the prior year, is primarily
attributed to higher levels of capital expenditures and the acquisition of
Ladehoff Paint.
Net cash from financing activities for the six-month period ended March 31, 1998
was $1,380,551 compared to $3,647,781 in the prior period. The present period
included the preferred stock equity placement while the prior period included
the successful underwriting in which the Company raised approximately $5 million
and the repayment of outstanding debt. During the present period, $107,831 of
officer loan was repaid.
As of March 31, 1998, the Company had net working capital of $1,381,145 as
compared to a net working capital position of $334,911 at fiscal period ending
September 31, 1997. The Company's working capital position improved primarily
because of its $1.5 million preferred stock placement in February 1998. The
Company's ratio of current assets to current liabilities was 3.1 at March 31,
1998.
The preferred stock placement completed during February 1998 has provided the
Company with sufficient capital to meet its present working capital needs and
provides funds for expansion of its operations for at least the next twelve
months. The primary motivation for this equity infusion was to allow the Company
to meet the new tangible net worth requirements for continued listing of its
securities on NASDAQ.
9
<PAGE>
THERMACELL TECHNOLOGIES, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On May 2, 1997, the Company was served with a summons regarding a civil
action filed in the United States District Court, Eastern District of Michigan
by IA, Inc., as plaintiff, that alleges the Company, and its president, John
Pidorenko, and Monroe Parker Securities, Inc., the Company's underwriter,
breached a marketing agreement executed by Mr. Pidorenko on March 26, 1992
relating to technologies developed by IA, Inc. This agreement contained a
confidentiality and non-disclosure clause for technologies purportedly developed
by IA, Inc. The Company was not a party to that agreement. The Company believes
that it has not infringed on any patents held by IA, Inc., non-withstanding the
validity of such patents and/or their claims. The petition requested various
court actions including a jury trial, but no specific request for damages. The
Company intends to vigorously defend itself in this action. The Company believes
it has meritorious defenses in this matter which is in a preliminary stage and
which will not be resolved until a considerable period of time has elapsed. The
Company has previously agreed to indemnify the Monroe Parker Securities, Inc.,
its former underwriter, against any claims asserted by this party.
Item 5. Other Information
On January 15, 1998, Mr. Peter Mahovlich was appointed to the board of
directors of the Company.
Item 6. Exhibits and reports on Form 8K
Form 8K, dated February 19, 1998, is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the undersigned thereunto
duly authorized.
ThermaCell Technologies, Inc.
Dated : 5/14/98 /s/ Gerald Couture
_______________________
Gerald Couture
Vice-President, Finance and CFO
10
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Computation of Earnings Per Common Share
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
March 31, March 31,
---------------------------------- -----------------------------------
1998 1997 1998 1997
--------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Shares outstanding: 3,375,578 2,859,551 3,375,578 2,859,550
Weighted average shares outstanding w/o options 3,153,568 1,533,166 3,145,415 1,201,507
Incremental shares attributed to outstanding options 700,000 - 350,000 -
Weighted average number of shares repurchased (233,333) - (116,667) -
--------------- --------------- ---------------- ----------------
Weighted average shares outstanding 3,620,235 1,533,166 3,378,748 1,201,507
Net loss $ (108,103) $ (220,768) $ (160,157) $ (583,494)
Net loss per share $ (0.03) $ (0.14) $ (0.05) $ (0.49)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> SEP-30-1997
<PERIOD-END> MAR-31-1998
<CASH> 880,565
<SECURITIES> 0
<RECEIVABLES> 362,956
<ALLOWANCES> 89,809
<INVENTORY> 520,410
<CURRENT-ASSETS> 2,027,356
<PP&E> 702,609
<DEPRECIATION> 149,731
<TOTAL-ASSETS> 4,368,401
<CURRENT-LIABILITIES> 646,211
<BONDS> 0
0
1,250,500
<COMMON> 338
<OTHER-SE> 2,406,453
<TOTAL-LIABILITY-AND-EQUITY> 4,368,401
<SALES> 1,470,631
<TOTAL-REVENUES> 1,470,631
<CGS> 966,856
<TOTAL-COSTS> 966,856
<OTHER-EXPENSES> 64,912
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,894
<INCOME-PRETAX> (179,382)
<INCOME-TAX> (35,877)
<INCOME-CONTINUING> (143,505)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (143,505)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> 0
</TABLE>
