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 June 30, 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.)
1125 Commerce Blvd., Sarasota, FL 34243
---------------------------------------
(Address of Principal Executive Offices)
(941) 358-0306
--------------
(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 June 30, 1998 was 4,245,021.
Transitional Small Business Disclosure Format:
Yes No X
--- ---
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Index
Page
Part I - Financial Information ----
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets -
September 30, 1997 and June 30, 1998........................ 1 - 2
Consolidated Statements of Operations -
Three months and nine months ended June 30, 1997 and 1998... 3
Consolidated Statements of Cash Flows -
Nine months ended June 30, 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
Signatures.................................................... 10
Exhibit 11............................................................. 11
i
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
Assets
<TABLE>
<CAPTION>
June 30, September 30,
1998 1997
------------------ ------------------
------------------ ------------------
(unaudited)
<S> <C> <C>
Current assets
Cash $ 506,079 $ 580,522
Accounts receivable, net 399,766 384,351
Notes receivable 50,000 -
Other 18,187 1,676
Inventories 556,481 410,972
Prepaid expenses and other 14,182 8,886
Prepaid stockholder relations expenses 185,387 -
------------------ ------------------
------------------ ------------------
Total current assets 1,730,082 1,386,407
------------------ ------------------
------------------ ------------------
Property and equipment 1,028,859 697,671
Less - accumulated depreciation 186,603 86,773
------------------ ------------------
------------------ ------------------
842,256 610,898
------------------ ------------------
------------------ ------------------
Other assets
Deposits 20,757 14,795
Deferred income tax benefit, net 690,961 631,372
Goodwill, net 842,053 819,199
Other intangibles, net 101,856 80,004
------------------ ------------------
------------------ ------------------
1,655,627 1,545,370
------------------ ------------------
------------------ ------------------
Total assets $ 4,227,965 $ 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>
<CAPTION>
June 30, September 30,
1998 1997
------------------ ------------------
------------------ ------------------
(unaudited)
<S> <C> <C>
Current liabilities
Accounts payable $ 390,102 $ 551,572
Accrued expenses 148,891 277,192
Accrued payroll and payroll taxes - 187,321
Current maturities of long-term debt
Notes payable 11,905 18,434
Capital leases 12,882 16,977
------------------ ------------------
------------------ ------------------
Total current liabilities 563,780 1,051,496
------------------ ------------------
------------------ ------------------
Long-term debt, net of current maturities
Notes payable 65,113 41,856
Capital lease obligations 59,383 21,233
------------------ ------------------
------------------ ------------------
Total long-term debt, net of current maturities 124,496 63,089
------------------ ------------------
------------------ ------------------
Total Liabilities 688,276 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,
570 outstanding June 30, 1998 570,000 -
Common stock, par value $.0001
Authorized 20,000,000 shares,
4,245,021 and 3,021,139 issued, respectively 425 301
Additional paid-in capital 6,277,152 5,564,319
Deduct notes receivable associated with stockholder loan (449,974) (550,460)
Accumulated deficit (2,858,412) (2,586,570)
Less - Treasury stock (2) -
------------------ ------------------
------------------ ------------------
Total stockholders' equity 3,539,689 2,428,090
------------------ ------------------
------------------ ------------------
Total liabilities and stockholders' equity $ 4,227,965 $ 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 Nine Months Ended
-------------------------------- -------------------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Revenue
Sales $ 789,183 $ 287,468 $ 2,259,814 $ 691,011
Less cost of sales 497,462 163,265 1,464,318 400,076
-------------- ------------ ------------- -----------
Gross profit 291,721 124,203 795,496 290,935
Selling, general and administrative
expenses 430,055 399,779 1,178,124 1,129,144
-------------- ------------ ------------- -----------
Loss from operations (138,334) (275,576) (382,628) (838,209)
-------------- ------------ ------------- -----------
Other income (expense)
Commissions - - - (34,883)
Interest income 15,405 19,755 40,471 27,176
Interest expense - (85,432) (6,894) (183,157)
Other 4,368 (11,696) 51,108 (14,006)
-------------- ------------ ------------- -----------
Total other income (expense) 19,773 (77,373) 84,685 (204,870)
-------------- ------------ ------------- -----------
Loss before income taxes (118,561) (352,949) (297,943) (1,043,079)
Income taxes
Deferred income tax benefit 23,712 70,339 59,589 176,975
-------------- ------------ ------------- -----------
Net loss $ (94,849) $ (282,610) $ (238,354) $ (866,104)
============== ============ ============= ===========
Basic loss per common share $ (0.03) $ (0.10) $ (0.08) $ (0.50)
============== ============ ============= ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
----------------------------------
June 30, June 30,
1998 1997
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Reconciliation of net loss to net cash
used in operating activities
Net loss $ (271,842) $ (866,104)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation 99,830 30,017
Amortization 58,634 20,334
Deferred income tax benefit (59,589) (177,738)
(Increase) decrease in accounts and notes receivable (65,415) 106,376
(Increase) decrease in inventories (145,509) 14,081
(Increase) in prepaid and other assets (213,156) (19,801)
Increase (decrease) in accounts payable (161,470) (143,309)
Increase (decrease) in accrued expenses (315,622) 107,114
--------------- ---------------
Net cash used in operating activities (1,074,139) (929,030)
--------------- ---------------
Cash flows from investing activities
Capital expenditures (331,188) (66,631)
Capital expenditure acquisitions, goodwill (73,340) -
Expenditures for patent, net (30,000) (30,000)
--------------- ---------------
Net cash used in investing activities (434,528) (96,631)
--------------- ---------------
Cash flows from financing activities
Proceeds from issuance of common stock 122,955 5,613,027
Proceeds from issuance of Series B preferred stock 1,500,000 -
Proceeds from issuance of notes payable 61,407 -
Principal payments on notes payable (10,624) (1,798,181)
Principal advances on stockholder loan - (671,285)
Proceeds from payments on stockholder loan 100,486 -
Costs associated with obtaining financing (300,000) -
Purchase of treasury stock (40,000) -
--------------- ---------------
Net cash provided by financing activities 1,434,224 3,143,561
--------------- ---------------
--------------- ---------------
Net increase in cash (74,443) 2,117,900
Cash beginning 580,522 24,278
--------------- ---------------
Cash ending $ 506,079 $ 2,142,178
=============== ===============
</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 nine months ended June 30, 1998 and June 30, 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 June 30, 1998 For the Quarter Ending June 30, 1997
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
Loss Shares Per Share Loss Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
<S> <C> <C>
Net Loss $ (94,849) $ (282,610)
Less: Preferred stock dividends 16,836
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
Income available to common
shareholders (111,685) 3,902,338 (282,610) 2,859,551
Effect of exercise of Options 251,282
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
Income available to common
shareholders $ (111,685) 4,153,620 $ (0.03) $ (282,610) 2,859,551 $ (0.10)
=============================================== ==============================================
=============================================== ==============================================
For the Nine Months Ending June 30, 1998 For the Nine Months Ending June 30, 1997
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
Loss Shares Per Share Loss Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
Net Loss $ (238,354) $ (866,104)
Less: Preferred stock dividends 33,488 -
Income Available to common (271,842) 3,181,202 (866,104) 1,745,345
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
shareholders
Effect of exercise of Options 251,282
----------------------------------------------- ----------------------------------------------
----------------------------------------------- ----------------------------------------------
Income available to common
shareholders $ (271,842) 3,432,484 $ (0.08) $ (866,104) 1,745,345 $ (0.50)
=============================================== ==============================================
</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 thereby reported as the
reporting of diluted earnings per share would be anti-dilutive. The inclusion of
converted preferred shares in the calculation of weighted average shares for
diluted loss 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, 1997, 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, 1997, 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, Kmart, 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 trade-name. 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 June 30, 1998 compared to Three months ended June 30, 1997
Total revenue for the three months ended June 30, 1998 was $789,183 compared to
$287,468 for the same period of 1997, which represents an increase of $501,715
or 275%. 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 both the Atlas Chemical Co. and Ladehoff Paint
operations.
Gross profit margins were 36.9% and 43.29%, respectively, for the three-month
period ending June 30, 1998 as compared to the prior period ending June 30,
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
both the Atlas Chemical and Ladehoff operations. It is expected that with the
higher levels of materials purchases, economies of scale from the combined
business, and higher margins with ThermaCool product lines will allow the
Company to benefit from higher gross profit margins in the future.
For the three months ended June 30, 1998, total selling, general and
administrative expenses were $430,055, as compared to $399,779 for the same
period of the previous year, an increase of $30,276, or 8%. This increase was
due to higher expenses incurred by the company in marketing, staffing and other
expenses associated with the Company's operations, additional costs for S, G & A
of the Atlas Chemical operation and a recently initiated investor relations
program the Company undertook. Without this investor relations program, these
costs would have declined over the year ago period.
The Company continued to experience a loss from operations of $138,334 for the
period ending June 30, 1998 as compared to a loss of $275,576 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 Ladehoff Paint will result in improvement in future operating
performance.
Other income for the recent period ended June 30, 1998 included net interest
income of $15,405 from the Company's cash balances. There was $85,432 of
interest expense in the prior year's quarter. Interest expense is nominal for
the present 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 June 30, 1998 to represent that portion of
deferred taxes that may be realized in the future.
The net loss, after income taxe benefit but before dividends on preferred stock,
was $94,849 for the three months ended June 30, 1998 as compared to a net loss
of $282,610 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 $16,836 for the quarter. There was no preferred stock
outstanding in the year ago period. The basic earnings (net loss), after
dividends on preferred stock, and the basic per share earnings (net
loss)attributable to common shares were $111,685 and $0.03 or the three months
ended June 30, 1998 as compared to a net loss of $282,610 and $0.10 on the same
basis for the same period in 1997.
7
<PAGE>
Nine months ended June 30, 1998 compared to Nine months ended June 30, 1997
Total revenue for the nine months ended June 30, 1998 was $2,259,814 compared to
$691,011 for the same period of 1997, which represents an increase of
$1,568,803, or 327%. The increase was primarily the result of the contributions
of both the Atlas Chemical and Ladehoff Paint.
Gross profit margins were 35% and 42%, respectively, for the present Nine month
period ending June 30, 1998 as compared to the prior period ending June 30,
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
Chemical and Ladehoff product lines, contributing more significantly during the
period.
For the nine months ended June 30, 1998, total selling, general and
administrative expenses were $1,178,124, as compared to $1,129,144 for the same
period of the previous year, an increase of approximately $48,980, or 4%. This
slight increase is the result of the Company's efforts to control its overhead
expense within its existing operations including the recently acquired Ladehoff
Paint business.
The Company continued to experience a loss from operations of $382,628 for the
period nine month ending June 30, 1998 as compared to a loss of $838,209 for the
same prior year period. The gross profit increase over the prior period was
$504,561, or 173%, 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 additional
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 June 30, 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, was $238,354 for the nine months ended June 30, 1998 as compared to a net
loss of $866,104 for the same period in 1997. This represented a reduction in
the loss of $627,750 for this period as compared to the year before nine-month
period ended June 30, 1997. During February 1998, the Company completed a
placement of preferred stock bearing a 8% dividend. The dividend on this
outstanding issue was $33,488 for the present nine-month period. There was no
preferred stock bearing a dividend outstanding in the year ago period.
Basic earnings (net loss)after preferred dividends on preferred stock, and the
basic earnings per share earnings or net loss attributable to common shares were
$271,842 and $0.08, respectively, for the nine months ended June 30, 1998 as
compared to a net loss of $866,104 and $0.50 on the same basis, respectively,
for the same period in 1997.
This current nine-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 1,745,345 to 3,432,484.
This increase is directly attributed to the Company's successful IPO that was
concluded in March 1998, the conversion of convertible preferred stock into
common stock, and the dilutive effect of exercisable stock options.
8
<PAGE>
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 nine months ending June 30, 1998, the Company raised approximately
$1.3 million through the placement of convertible preferred stock, after related
expenses.
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 a 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 June 30, 1998, $930,000 of
preferred stock was converted into 980,569 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 and with the Ladehoff acquisition an effort with the
western region of the country. These efforts will be 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 nine month period ended June 30, 1998, the Company's net cash used in
operating activities was $1,074,139 in the current period compared with $929,030
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 account receivables, inventory and other assets while
reducing accounts payable and accrued expenses.
Net cash used in investing activities for the nine month period ended June 30,
1998 was $434,528 as compared to $96,631 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 nine-month period ended June 30, 1998
was $1,434,224 compared to $3,143,561 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 repaid its outstanding debt. During the present period, a net of $100,486 of
officer loans were repaid.
As of June 30, 1998, the Company had net working capital of $1,166,302 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 June 30,
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>
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.
On or about February 11, 1998, Mr. Kevin Horrell filed an amended complaint
against the Company and Mr. Pidorenko, the Company's president. The previous
complaint had been dismissed in the Circuit court of the 12th Judicial Circuit,
in and for Sarasota County, Florida. Mr. Horrell alleges that he is due certain
unrestricted securities of the Company in connection with prior financing
activities. Mr. Horrell alleges breach of contract, fraud in the inducement of a
contract and violations of Rule 10b-5. The Company believes it has meritorious
defenses in this matter which is in the preliminary stage and is prepared to
vigorously defend in this action.
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 : 8/14/98 /s/ Gerald Couture
-------------------------
Gerald Couture
Vice-President, Finance and CFO
THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
Computation of Loss Per Common Share
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
June 30, June 30,
---------------------------------- -----------------------------------
1998 1997 1998 1997
--------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Shares outstanding: 4,245,021 2,859,551 4,245,021 2,859,550
Weighted average shares outstanding w/o options 3,902,338 2,859,551 3,181,202 1,745,345
Incremental shares attributed to outstanding options 700,000 - 350,000 -
Weighted average number of shares repurchased (448,718) - (98,718) -
--------------- --------------- ---------------- ----------------
Weighted average shares outstanding 4,153,620 2,859,551 3,432,484 1,745,345
Net loss $ (111,685) $ (282,610) $ (271,842) $ (866,104)
Net loss per share $ (0.03) $ (0.10) $ (0.08) $ (0.50)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> SEP-30-1997
<PERIOD-END> JUN-30-1998
<CASH> 490,968
<SECURITIES> 0
<RECEIVABLES> 449,766
<ALLOWANCES> 87,470
<INVENTORY> 556,481
<CURRENT-ASSETS> 1,730,082
<PP&E> 842,256
<DEPRECIATION> 186,603
<TOTAL-ASSETS> 4,227,965
<CURRENT-LIABILITIES> 563,780
<BONDS> 0
0
570,500
<COMMON> 425
<OTHER-SE> 2,968,764
<TOTAL-LIABILITY-AND-EQUITY> 4,227,965
<SALES> 2,259,814
<TOTAL-REVENUES> 2,259,814
<CGS> 1,464,318
<TOTAL-COSTS> 1,464,318
<OTHER-EXPENSES> 84,685
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,894
<INCOME-PRETAX> (297,943)
<INCOME-TAX> (59,589)
<INCOME-CONTINUING> (238,354)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (238,354)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> 0
</TABLE>
