U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Cool Can Technologies, Inc.
(Name of Small Business Issuer in its charter)
Minnesota 95-4705831
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
21700 Oxnard Street, Suite 1550
Woodland Hills, California 91367
(Address of principal executive office) (Zip Code)
Issuer's telephone number (818) 593-2282
Securities to be registered under Section 12(g) of the Act:
Common Shares
Charles Clayton
527 Marquette
Minneapolis, Minnesota 55402
(612) 338-3738
(Agent for Service)
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ITEM 1. DESCRIPTION OF BUSINESS
Cool Can Technologies, Inc. has developed, and patented a unique
proprietary technology which will allow for the licensing and manufacture of the
first commercially viable self-chilling beverage container.
The ability to chill a beverage is based on the theory of the latent
heat of evaporation of liquefied gasses and the cooling of those gasses due to
rapid expansion. The basic principles of evaporation and heat transfer dictate
that as liquid coolant is vaporized it draws heat from the surrounding area,
lowering the temperature of nearby materials.
The product consists of a cartridge of liquid CO2 that is held in place
by a cartridge holder. The unit is then placed in the can, the can subsequently
is filled and sealed. The cooling device will displace 2.5 ounces of the fluid,
so a 12 ounce can will contain 9.5 ounces of beverage with the cooling device
installed.
When the tab on the lid of the can is pulled there is a release of
pressure within the can that triggers the CO2 capsule causing the gas to be
discharged through diffusers of porous plastic into the beverage. The escaping
CO2 forms into small particles of frozen snow at extremely cold temperatures and
rapidly imparts a chilling action to the beverage, while simultaneously
carbonating the beverage. The amount of chilling and carbonation are adjustable
depending on the requirements of the manufacturer. Greater chilling may be
obtained by increasing the amount of liquid CO2. The amount of carbonation may
be adjusted from no carbonation to several levels greater than now used in
manufactured soft drinks.
The additional retail cost for the device is estimated to be $.20 per
can, and may be used on a 12 ounce can or a 16 ounce can. The result is that the
consumer may purchase a beverage and enjoy it cold without having to purchase it
from a cooler or purchase ice to cool the beverage.
The manufacturer of the beverage may sell the beverage without the
concern of satisfying the consumer preference of a cold beverage by providing a
vending machine or other method of cooling the beverage.
The consumer may purchase the beverage and enjoy it at a later time
without the requirement of an ice chest or other method of cooling his drink, as
opposed to having to drink the beverage right after purchase as is the case with
one purchased from a vending machine or cooler. The consumer may purchase the
beverage and enjoy it hours later while in a boat or on the golf course.
The technology is intended to be used on a high speed canning line with
little impact on the speed of the canning line. The usual canning process
involves two parts; the main part of the can, which is filled with the drink,
and the lid which is sealed shut be a seaming process after the can has been
filled. Initial engineering
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diagrams have been completed for equipment which will successfully integrate the
inclusion of the chilling module insert into a high speed canning line.
Patents and Trademarks
The company has obtained patent protection for its concept of a
self-chilling beverage container. The patent application filed in 1995 was
subsequently approved and Patent No 5,609,038 was issued to the company on March
11, 1997. The issued patent includes 24 claims regarding a self-chilling
beverage container and parts therefor.
Internationally, the company has been granted coverage in some foreign
countries and others are pending. The company anticipates coverage in the vast
majority of industrialized countries in the near future.
The Company filed 14 trademark applications with the United States
Patent and Trademark Office in June, 1998. The intention is to receive a notice
of allowance from the Patent Office to register various names which describe
both the product and the process involved in the manufacture of a self chilling
beverage container.
Government Regulations and Environment
All of the currently projected uses for the company's self-chilling
beverage container fall under the authority of the United States Food and Drug
Administration ("FDA"). The key element and the only substance which mixes with
the beverage is the C02 which has always been present in beverages and is an
accepted substance by the FDA for the beverage industry. The FDA regulates the
material content of all beverage containers and packages.
The materials used in manufacturing the Cold Can are similar to present
canning materials and are fully compatible with FDA requirements. The company
also expects that licensees who will be filling the Cold Can with beverages will
comply with the appropriate FDA regulations.
The Environmental Protection Agency ("EPA"), in their efforts to
protect the stratospheric ozone, have determined that a self-chilling beverage
can utilizing C02 as the refrigerant has a minimal impact on the ozone layer. In
the Notice of Acceptability published in the Federal Register effective February
24, 1998, it was also determined that self-chilling cans utilizing C02 either
recovered as a by-product from other industrial activities or taken from the
atmosphere will further reduce the net impact.
As mentioned previously, various safety features are incorporated into
the design and manufacture of the Cold Can. The uses of C02 capsules in things
like
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seltzer bottles and whipping cream dispensers is not a new concept and have been
used by consumers without incident for some time.
Additionally, the Cold Can is designed to be in full compliance with
all recycling requirements since the component parts will be manufactured
utilizing only recyclable materials.
Competition
The company believes the market for a self-chilling beverage container
is an emerging market. The opportunity for a beverage company to incorporate a
technology, which allows a consumer to have a cold drink at any place, and at
any time is significant and compelling.
The company is aware of three other firms that are currently attempting
to manufacture and market a similar technology. The company believes the
competitors use either a combination of gases to create a chilling effect or a
C02 based reactant system, and hold one or more U.S. patents on their designs.
As of yet, none of these companies appear to be close to having a commercially
viable product available for purchase.
The company believes that success in marketing a self-chilling beverage
container will be based primarily on price, ease of use, quality, product
awareness, product safety, and ultimately an endorsement by one or more major
beverage companies.
The competitor's designs are somewhat more complex applications in that
their chilling unit must be attached to the bottom of the can and activated by
turning the can upside down and then pushing a button or pulling a tab. This
application mandates that their version of a self-chilling can must be produced
specifically for beverage companies through one of the major can manufacturers.
The Cold Can on the other hand is considerably more versatile in that the
chilling module is an insert which can be delivered to either the can
manufacturer or the beverage canning facility for use with any standardized can
out of general inventory as long as it is identified with the "InstaCool" label.
What differentiates the Cold Can from it's competition is the unique valving and
activation system by which the reactant gas is released. The consumer is not
required to push any buttons or do anything specific to activate the Cold Can
other than the normal process of opening the can, thus making the Cold Can much
more user friendly.
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ITEM 2. PLAN OF OPERATION
Product Development
The company intends to implement the following procedural plan in order
to complete its final design specifications, then build and test the product.
This process will be accomplished in the following manner:
1. Build a fully functioning prototype from the working drawings in the issued
patent. During this period the existing design will be thoroughly reviewed and
any modifications which will improve efficiency, reduce cost, or decrease the
occupied volume of the chilling module insert will be incorporated.
2. Conduct various safety tests by putting the unit through several stress tests
such as exposure to heat, testing a sealed can complete with insert, by dropping
it from various heights, and testing the integrity and durability of the
chilling module insert.
3. Pre-production design generating both computer modeling of all parts and
engineering drawings incorporating any design modifications.
4. Pre-production prototype construction. Three-dimensional construction of all
parts including preliminary rubber molds.
5. Testing of pre-production prototypes.
6. Refine designs to incorporate test results and finalize production
specifications and drawings.
7. Begin to source factory production facilities for all customized parts and
molding requirements.
8. Generate manufacturing pricing data.
9. Final consultation with all parties involved in the production of finished
goods-aluminum can manufacturers, filler manufacturers and beverage canners.
The company has enlisted the services of the California Manufacturing
Technology Center ("CMTC") in order to assist in the execution of its product
development and manufacturing processes plan.
The CMTC will also assist the company in obtaining various
registrations such as ISO and CE Marking which are essential for vendors selling
to major U.S. and European corporations, as well as to the U.S. Government and
the Department of Defense.
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The CMTC also has expertise in dealing with issues revolving around FDA
compliance, environmental management, and operational efficiency improvements.
Marketing Plans
The company's principal marketing strategy is comprised of two major
components. The first is the licensing of beverage companies worldwide for the
use of self-chilling beverage can technology and associated trademarks. The
second is the licensing of major aluminum can manufacturers for actual
manufacturing of the chilling module insert so that it can be subsequently sold
to beverage companies as a special insert or included with the can as one unit.
In the interim, while the company goes about the process of licensing
beverage companies and can manufacturers, the company intends to purchase and
install it's own beverage canning line at a facility which will initially be
used for research and development. The intent is to demonstrate an actual
canning process placing chilling module inserts in both 12 and l6oz cans. The
facility will serve to demonstrate to beverage executives the viability of high
speed canning using the insert. The secondary purpose is to develop a facility
with the capability to package small runs of various beverage products. This
will allow beverage companies to " test market" the concept without actually
having to make any capital investment in new equipment or altering their own
production facility.
The primary task of the corporation is licensing of the Cold Can
technology and fully developed designs of the chilling module inserts, as well
as the automatic insert feeding machines which will be incorporated into present
beverage canning lines. The company also intends to manufacture in its own plant
certain key components of the triggering mechanism. The company feels that by
actually supplying a key component to licensees it can more accurately track the
number of units sold by licensees, particularly those in foreign countries. The
sale of these units also becomes a significant profit center.
This strategy is not unlike that employed by The Coca-Cola Company in
supplying syrup to franchise bottlers or KFC supplying the seasoning to
franchisees for chicken.
Sales And Licensing Strategy
The company's strategy is to appoint a master licensee in each country
or designated region. The master licensee has the right to appoint
sub-distributors, subject to approval by the company.
The typical licensing agreement will have several components. The
company will issue a master license on an exclusive territorial basis to company
"X". Company "X" will be required to pay an up front fee to acquire the master
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license. This initial fee will be based primarily on two factors, total
population and per capita beverage consumption within the designated territory.
During the term of the contract, company "X" will also be required to forward a
percentage of the initial fees paid by sub-licensees to the Company once they
have recovered their initial investment. Additionally there will be a commitment
to pay $.005 per unit ($.12 per case of 24) in royalties for each unit sold in
the territory. Company "X" will be required to purchase a minimum number of
units per year in order to maintain their exclusive contractural agreement. The
Company will be directly manufacturing certain key components of the insert in
order to effectively track international sales and of course provide an
additional revenue stream.
Concurrently, the company will license packaging equipment
manufacturers to develop, build and produce the automatic insert feeding machine
and any other required equipment for integration into beverage canning lines.
The company's extensive patents and trademark registrations will
protect both the marketing and the manufacturing rights of the product.
Advertising and promotion
Phase one of the advertising campaign will be in support of the initial
licensing effort and will consist of advertising in beverage industry
publications and international business journals seeking qualified prospective
master licensees in each country, and market sector. The company will also have
a significant presence at major beverage trade shows though distribution of
promotional materials and demonstrating the cold can technology to prospective
licensees.
The second phase of advertising will be more consumer oriented and
similar to the advertising campaign of sugar substitute "NutraSweet". The
company's intention is to drive consumer awareness of both the term "InstaCool"
as well as the visual identification on the can which indicates the inclusion of
the chilling module.
A percentage of the licensing revenues from the per-can income will be
allocated for consumer advertising by Cool Can Technologies, Inc. and also by
master licensees who will be obligated under the terms of their master license
agreement to allocate a pre-determined percentage of revenues to consumer
advertising in respective countries, and market areas.
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Manufacturing and Production
The company intends to license the self-chilling beverage container
technology it develops to large beverage producers and aluminum can
manufacturers. The company believes this strategy will provide material
benefits, including use of the greater manufacturing, marketing, and
distribution expertise of such companies, and potential reduction of substantial
manufacturing costs. The company anticipates entering into agreements whereby
the licensees are responsible for purchasing the raw materials, manufacturing or
contracting for the manufacture of the container, as well as the labeling,
filling, marketing, selling, and distribution of the self-chilling beverage
container technology and other related technologies licensed by the Company.
During the initial research and development period the Company intends
to rent out production line time from a local soft drink manufacturer. Many soft
drink manufacturers have excess capacity and are willing to rent line time on an
hourly basis. Included in the hourly fee will be the ability to utilize the
collective input of the facilities production personnel, most of whom have years
of experience in the beverage bottling and canning field. It would be virtually
impossible for the company to acquire this caliber of expertise individually due
to factors of both availability and cost.
This arrangement will allow the company to continue to fine tune and
develop both the chilling module insert and more importantly to "trouble-shoot"
and identify any obstacles or situations which may impede the successful
integration of the Cold Can technology into a high-speed beverage canning
operation. Also, it will alleviate the requirement for the company to make
significant capital expenditures on canning equipment of it's own until there is
some certainty as to both future production requirements and the degree of
specialized or custom equipment which may need to be developed.
During the second phase of the pre-production period the company
intends to establish administration offices and a research and development
facility. The purpose of the facility will be to demonstrate the commercial
viability of the company's manufacturing processes, to supply self-chilling
beverage containers for additional testing and market studies, and to produce
self-chilling beverage containers, which can be sold directly to beverage
companies. It is anticipated that containers sold directly to these companies
will be filled, packaged and distributed by the customer. Should the due
diligence period dictate the need for production of highly specialized equipment
in order to produce finished goods, the company will undertake to purchase it's
own canning line. Once the beverage canning line is operational in the new
facility, the company will have the capability to co-pack product for customers
whose limited volumes would preclude purchase of the required custom equipment
themselves. The company's production facility will be designed to allow for
assembly of the component parts for the chilling module insert so that they may
be distributed from the company's facility. All of the
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components will be manufactured off site. The company believes it's production
facility will assist in commercialization efforts as it is anticipated that the
ability to produce the insert, place it in the can, then have the container
filled and seamed will assist in further refinement of the finished product.
The company will complete final design and development tasks for the
molds, dies and tooling required for volume manufacturing of the trigger
mechanism and hardware for support of the C02 capsules. There will also be
intensive consultation with companies who make both fillers and filler heads in
order to make certain there is no potential conflict with the insert during this
critical aspect of the production process. Extensive testing will be carried out
during the initial research and development stage in order to produce a
zero-defects product which can be manufactured daily on a world wide basis at
high production volumes.
Additionally, final design and development of several types of
automatic insert feed mechanisms, which can be integrated into high-speed
beverage canning lines will be completed. The company will accomplish this in
consultation with several major beverage concerns, but will retain ownership of
the technology and manufacturing rights.
Raw Materials and Suppliers
The primary raw materials used by the company in the manufacture of its
chilling module inserts are a steel or aluminum C02 cartridge, plastic cartridge
holder, polymer cartridge piercer, polymer piercer body and a resilient polymer
foam pad.
The company anticipates it will enter into agreements with certain raw
material suppliers and that the projected unit volumes required will cause the
price of the insert to continue to decrease in price as licensing efforts
expand. Once certain economies of scale are achieved and long term supplier
agreements are solidified, the company believes that the premium required to
purchase a beverage with the "InstaCool" chilling insert will be nominal.
ITEM 3. DESCRIPTION OF PROPERTY
None
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are presently 18,127,966 shares of the company's common shares
outstanding. The following table sets forth the information as to the ownership
of each person who owns of record, or is known by the company to own
beneficially, more than five per cent of the company's common stock, and the
officers and directors of the company.
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Shares of Percent of
Name Common Stock ownership
- --------------------------------------------------------------------------------
Delta Technologies 2,500,000 14%
Group, Inc.
Bruce T. Leitch 200,000 1%
Andrew O. D. Lee 50,000 1%
John H. Picken 895,000 5%
Ulrich Zgraggen 900,000 5%
Harrison Cornwall 910,000 5%
General Beverage Corp. 2,000,000 11%
L. N. Family Holdings 1,500,000 8%
Richard Donaldson 1,500,000 8%
Directors and Officers 2,750,000 15%
as a group
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The executive officers and directors of the company, with a brief
description are as follows:
Name Age Position
- ---- --- --------
Bruce T. Leitch 42 President, Director
Jerry McNabb 56 Director
Andrew O. D. Lee 41 Secretary/Treasurer, Director
Bruce T. Leitch, Mr. Leitch is the President, and a Director of the
Company. Mr. Leitch was President of Western Canada Beverage Corp, since 1992,
and after its merger with Selkirk Springs International Corp to form Canadian
Glacier Beverage Corp. he was Vice President of the merged entity until its sale
in April, 1998.
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Jerry McNabb, Mr. McNabb is a Director. Mr. McNabb has been employed by
Sawbridge Waters, Inc., a bottled water business, since 1993, he is currently
the Vice President. Previously he was employed by the Coca-Cola Company and
Adolph Coors Company.
Andrew O. D. Lee, Mr. Lee is Secretary, Treasurer and a Director. Mr.
Lee is a director of Bio Preserve Medical Corporation and treasurer of Four
Crown Foods, Inc. Mr. Lee was the Controller of Turbodyne Technologies, Inc.
from 1996 to 1999.. Before joining Turbodyne Mr. Lee was a chartered accountant
with Morgan & Company in Vancouver, British Columbia.
ITEM 6. EXECUTIVE COMPENSATION
There are no officers or directors that received compensation in excess
of $60,000 or more during the last year.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 8. LEGAL PROCEEDINGS
None
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's common stock has not traded at this time.
There are 56 holders of the common stock of the Company. There have
never been any dividends, cash or otherwise, paid on the common shares of the
Company.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
Name Date Shares Cost
482047 B C, Ltd. 9/98 50,000 $25,000
Jason Aisenstat 9/98 10,000 $ 5,000
Tandoz Bahremand 7/98 50,000 $ 50
Yvonne Bahremand 7/98 75,000 $ 75
Carmen Basa 9/98 10,000 $ 5,000
Bruce Braganold 4/99 20,000 $30,000
Chris Brock 4/99 500 $ 750
Shannon Callahan 7/98 200,000 $ 200
Barry Champine 7/98 775,000 $ 775
Charles Clayton 8/98 5,000 $ 5
Armand Constantine 7/98 855,000 $ 855
Harrison Cornwall 7/98 910,000 $ 910
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Delta Technologies Group, Inc. 7/98 2,500,000 $ 2,500
Richard Donaldson 7/98 1,500,000 $ 1,500
Shane Epp 4/99 10,000 $15,000
Wendy Field 4/99 2,000 $ 3,000
Brian Fleming 4/99 500 $ 750
General Beverage Corporation 7/98 2,000,000 $ 2,000
Gerald Haggard 4/99 2,000 $ 3,000
Victoria Hakimzadeh 7/98 25,000 $ 25
Alexander Halimi 7/98 50,000 $ 50
Emil Hamili 7/98 100,000 $ 100
Evelyn Hamili 7/98 100,000 $ 100
Nicole Hamili 7/98 50,000 $ 50
Timothy Hamili 7/98 50,000 $ 50
Scott Houghton 7/98 233,333 $50,199
Patricia King 8/98 5,000 $ 5
Karen Kleinwort 4/99 33,333 $49,999
Chasha Kuzedki 8/98 5,000 $ 5
L N Family Holdings 7/98 1,500,000 $ 1,500
Andrew Lee 7/98 50,000 $ 50
Bruce Leitch 7/98 200,000 $ 200
Milan Ilich 9/98 50,000 $25,000
Ormist Majestiv 7/98 820,000 $ 820
Louise Marchand 7/98 800,000 $ 800
Harley Mayers 9/98 20,000 $10,000
Jeffrey Murchison 4/99 1,000 $ 1,500
Alice Nowek 7/98 100,000 $ 100
Julie Nowek 7/98 125,000 $ 125
O'Neill Family Trust 7/98 500,000 $ 500
Robert Parker 4/99 1,500 $ 2,250
John Picken 7/98 895,000 $ 895
John Reay 7/98 600,000 $ 600
Michael Richardson 4/99 2,000 $ 3,000
David Ryan 7/98 200,000 $ 200
Heidi Schuerman 4/99 800 $ 1,200
Ian Shepherd 4/99 1,000 $ 1,500
David St. James 7/98 300,000 $ 300
Melanie St. James 7/98 300,000 $ 300
Heinz Von Rosen 7/98 850,000 $ 850
Gus Walroth 9/98 20,000 $10,000
Leo Wong 9/98 20,000 $10,000
Samuel Yue 9/98 20,000 $10,000
Arjang Zendel 7/98 75,000 $ 75
Azita Zendel 7/98 150,000 $ 150
Ulrich Zgraggen 7/98 900,000 $ 900
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There was no underwriter on the sales of any of the securities, and no
commissions were paid.
The registrant believes that all transactions were transactions not
involving any public offering within the meaning of Section 4(2) of the
Securities Act of 1933, since (a) each of the transactions involved the offering
of such securities to a substantially limited number of persons; (b) each person
took the securities as an investment for his own account and not with a view to
distribution; (c) each person had access to information equivalent to that which
would be included in a registration statement on the applicable form under the
Act; (d) each person had knowledge and experience in business and financial
matters to understand the merits and risk of the investment; therefore no
registration statement need be in effect prior to such issuances.
ITEM 11. DESCRIPTION OF SECURITIES
The company has authorized 150,000,000 shares of common stock, no par
value, and 50,000,000 preferred stock, no par value. Each holder of common stock
has one vote per share on all matters voted upon by the shareholders. Such
voting rights are noncumulative so that shareholders holding more than 50% of
the outstanding shares of common stock are able to elect all members of the
Board of Directors. There are no preemptive rights or other rights of
subscription.
Each share of common stock is entitled to participate equally in
dividends as and when declared by the Board of Directors of the company out of
funds legally available, and is entitled to participate equally in the
distribution of assets in the event of liquidation. All shares, when issued and
fully paid, are nonassessable and are not subject to redemption or conversion
and have no conversion rights.
The preferred shares are convertible into 10 common shares at a price
of $.10 per share for a period of 10 years. The preferred shares have no voting
rights, unless converted into common shares. There are no other preferences.
Risk Factor - Penny Stock Regulation. Broker-dealer practices in
connection with transactions in "penny stocks" are regulated by certain penny
stock rules adopted by the Securities and Exchange Commission. Penny stock
generally are equity securities with a price of less than $5.00 (other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in
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the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. If the Company's securities become subject to the penny stock
rules, investors in this offering may find it more difficult to sell their
securities.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Minnesota Statutes, contain an extensive indemnification provision
which requires mandatory indemnification by a corporation of any officer,
director and affiliated person who was or is a party, or who is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a member, director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a member,
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
and against judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted, or failed to act, in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. In some instances a court must approve such
indemnification.
ITEM 13. FINANCIAL STATEMENTS
Please see the attached Financial Statements.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) Please see the attached Financial Statements
(b) Exhibits:
3. Articles of Incorporation and bylaws
5. Opinion of counsel
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10.1. Patent acquisition
10.2. CMTC agreement
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: Cool Can Technologies, Inc.
/s/
-----------------------------------------
Bruce T. Leitch, President, Director
/s/
-----------------------------------------
Jerry McNabb, Director
/s/
-----------------------------------------
Andrew O. D. Lee, Secretary, Director
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COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
FINANCIAL REPORT
JUNE 30, 1999
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Cool Can Technologies, Inc.
We have audited the accompanying balance sheet of Cool Can
Technologies, Inc., a Minnesota corporation, and a development stage company, as
of June 30, 1999, and the related statements of operations, stockholders' equity
and cash flows for the period then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all
material respects, the financial position of Cool Can Technologies, Inc. as of
June 30, 1999, and the results of its operations and its cash flows for the
period then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage; planned principal
operations have not yet commenced. Successful continued development of the
Company is dependent upon its ability to obtain additional financing through
contributions of equity capital and/or debt issuance. These factors raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
HOUSE, NEZERKA & FROELICH, P.A.
Bloomington, Minnesota
July 12, 1999
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
June 30, 1999
ASSETS
CURRENT ASSETS:
Cash $ 94,756
Prepaid expenses 1,040
---------
Total current assets 95,796
INTANGIBLES (Note 5) 24,000
---------
$ 119,796
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable, principally stockholders (Note 4) $ 74,877
STOCKHOLDERS' EQUITY (Note 3):
Preferred stock, no par value, 50,000,000 shares authorized,
none issued or outstanding --
Common stock, no par value, 100,000,000 shares authorized,
18,127,966 shares issued and outstanding 279,769
Deficit accumulated during the development stage (234,850)
---------
44,919
---------
$ 123,931
=========
See Notes to Financial Statements.
2
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period From Incorporation (April 1, 1998)
Through June 30, 1999
Revenues $ --
Administrative pre-opening and development expenses (234,850)
-----------
Net loss $ (234,850)
===========
Loss per common share $ (.01)
===========
Loss per common share assuming dilution $ (.01)
===========
Weighted average outstanding shares 18,127,966
===========
See Notes to Financial Statements.
3
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Period From Incorporation (April 1, 1998)
Through June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Stock During the
---------------------------- Amount Subscription Development
Shares Amount Per Share Receivable Stage
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Shares issued for cash,
December 28, 1998 17,820,000 $ 17,820 $ .001 $ -- $ --
Shares issued for cash,
December 28, 1998 200,000 100,000 .50 -- --
Shares issued for cash,
June 6, 1999 36,820 55,230 1.50 -- --
Shares issued for receivable,
June 6, 1999 71,146 106,719 1.50 (106,719) --
Payment on receivable -- -- 106,719 --
Net loss -- -- -- (234,850)
------------ ------------ ------------ ------------
Balance, June 30, 1999 18,127,966 $ 279,769 $ -- $ (234,850)
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Period From Incorporation (April 1, 1998)
Through June 30, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(234,850)
Increase in prepaid expenses (1,040)
Increase in accounts payable 74,877
---------
(161,013)
CASH FLOWS FROM INVESTING ACTIVITIES:
Intangibles (24,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 279,769
---------
Increase in cash 94,756
Cash:
Beginning --
---------
Ending $ 94,756
=========
See Notes to Financial Statements.
5
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Summary of Significant Accounting Policies:
ORGANIZATION AND ACTIVITIES:
The Company was incorporated on April 1, 1998 in the State of
Minnesota. The Company was formed to act as a holding company for
manufacturing companies and since inception, has devoted its efforts to
raising capital and pre-opening activities. The Company owns a patent
for a self-chilling beverage container and parts therefore.
The Company has not yet adopted a corporate year-end.
The Company is considered to be in the development stage and the
accompanying financial statements represent those of a development
stage enterprise, and therefore, is subject to the usual business risks
of development stage companies. The Company has had no operations.
Research and development costs are expensed as incurred. Expenses
include $90,000 paid to a consulting firm for marketing, product
development and public relations consulting for Canadian and European
market areas.
A summary of the Company's significant accounting policies follows:
INCOME TAXES:
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and
operating loss and tax credit carryforwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets
and liabilities and their tax basis. Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of the
enactment.
INTANGIBLES:
Intangible assets will be amortized using the straight-line method over
10 years. No amortization expense was required for the period ended
June 30, 1999.
LOSS PER COMMON SHARE:
Loss per share is computed based on the weighted average number of
common shares outstanding. Potential issuances that would reduce loss
per common share are considered anti-dilutive and are excluded from the
computation.
ESTIMATES AND ASSUMPTIONS:
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during
the reporting period. Significant estimates include the valuation of
stock issued. Actual results could differ from these estimates.
START-UP COSTS:
Start-up costs incurred in connection with start-up activities are
charged to expense as they are incurred.
6
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Note 2. Income Taxes:
For income tax purposes, pre-opening costs are generally deferred and
amortized to expense in future tax returns. For financial reporting
purposes, the future tax value of pre-opening costs has been eliminated
by a valuation allowance.
The provision (benefit) for income taxes differs from the amount
computed by applying the U.S. federal income tax rate to loss before
income taxes as follows:
Expected tax (benefit) at statutory rate $(78,000)
State tax effects (15,000)
Effect of graduated federal rates 6,500
Increase in valuation allowance 86,500
--------
$ --
========
Tax law provides for limitation on the use of future loss carryovers
should significant ownership changes occur.
The following is a summary of deferred taxes:
Deferred tax assets:
Pre-opening costs $ 86,500
Valuation allowance (86,500)
--------
$ --
========
Note 3. Stockholders' Equity:
The Board of Directors have the power and authority to fix by
resolution any designation, class, series, voting power, preference,
right, qualification, limitation, restriction, dividend, time and place
of redemption, and conversion right with respect to any stock of the
corporation.
Note 4. Related Party Transactions:
The Company currently shares office space and obtains services from the
employer of a Company stockholder. Office space rental fees are $1,500
per month. Rent expense for the period ended June 30, 1999 totaled
$7,500.
The Company currently has a consulting arrangement with a stockholder
requiring payments of $8,500 per month. Such consulting fees totaled
$68,000 for the period ended June 30, 1999.
Note 5. Intangibles:
A United States patent for a SELF-CHILLING BEVERAGE CONTAINER AND PARTS
THEREFORE was obtained by a founding stockholder on March 11, 1997.
During 1998, the patent and patent holder rights thereunder were sold
to the Company for $1. Subsequent costs in June 1999 to file foreign
patent applications have been similarly capitalized.
7
EXHIBIT 3
ARTICLES OF INCORPORATION
OF
COOL CAN TECHNOLOGIES, INC.
The undersigned incorporator, being a natural person, 18 years of
age or older, in order to form a corporate entity under Minnesota Statutes,
Chapter 302A, hereby adopts the following Articles of Incorporation:
ARTICLE I
The name of the corporation is Cool Can Technologies, Inc.
ARTICLE II
The registered office of the corporation is located at 527
Marquette, Minneapolis, Minnesota 55402, and the registered agent at that
address is Charles Clayton.
ARTICLE III
The name and address of the incorporator is Charles Clayton, 527
Marquette, Minneapolis, Minnesota 55402.
ARTICLE IV
The corporation is authorized to issue an aggregate total of
100,000,000 common shares and 50,000,000 preferred shares.
ARTICLE V
In addition to the powers granted to the Board of Directors by
Minnesota Statutes, Chapter 302A, the Board of Directors of this corporation
shall have the power and authority to fix by resolution any designation, class,
series, voting power, preference, right, qualification, limitation, restriction,
dividend, time and place of redemption, and conversion right with respect to any
stock of the corporation.
ARTICLE VI
Any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting by written action signed by a
majority of the Board of Directors then in office, except as to those matters
which require
<PAGE>
shareholder approval, in which case the written action shall be signed by all
members of the Board of Directors then in office.
ARTICLE VII
No holder of stock of this corporation shall be entitled to any
cumulative voting rights.
ARTICLE VIII
No holder of stock of this corporation shall have any preferential,
pre-emptive, or other rights of subscription to any shares of any class or
series of stock of this corporation allotted or sold or to be allotted or sold
and now or hereafter authorized, or to any obligations or securities convertible
into any class or series of stock of this corporation, nor any right of
subscription to any part thereof.
ARTICLE IX
Minnesota Statutes sections 302A.671 (Control share acquisitions),
302A.673 (Business combinations) and 302A.675 (Takeover offer; fair price) shall
not apply to this corporation.
IN WITNESS WHEREOF, the Incorporator has executed these Articles of
Incorporation, this _____ day of March, 1998.
-------------------------------------
Charles Clayton
<PAGE>
BY-LAWS
OF
COOL CAN TECHNOLOGIES, INC.
ARTICLE I
MEETINGS OF SHAREHOLDERS
1.1 Regular Meetings. Regular meetings of shareholders may be called by
the Chief Executive Officer, the Secretary, the Board of Directors,
or by shareholder demanded in accordance with Minnesota Statutes
Section 302A.431, subdivision 2. No meeting shall be designated a
regular meeting unless specifically described as such in the notice
of meeting or unless all the shareholders are present in person or
by proxy, and none of them objects to this designation.
1.2 Special Meetings. Special meetings of the shareholders may be called
for any purpose or purposes at any time by the Chief Executive
Officer, Chief Financial Officer, two or more directors, or by
shareholder demand in accordance with Minnesota Statutes, Section
203A.433, subdivision 2.
1.3 Time and Place of Shareholder Meeting. Except as otherwise provided
by statute, any meeting of shareholders shall be held on the date
and at the time and place fixed by the Chief Executive Officer or
the Board of Directors of the corporation.
1.4 Notice of Shareholder Meeting. Except as otherwise provided by
statute, written notice of the date, time, and place of any meeting
of shareholders shall be given to every holder of voting shares at
such address as appears on the stock book of the corporation at
least five days prior to the meeting if by mail, or two days prior
to the meeting if by telex, telegram, or in person.
1.5 Voting. Except where a greater percentage is required by statute,
the shareholders shall take action by the affirmative vote of the
holders of a majority of the votes of the shares present.
1
<PAGE>
ARTICLE II
DIRECTORS
2.1 Number, Term of Office. The number of directors of the corporation
shall be as determined from time to time by the shareholders.
Directors need not be shareholders. Each director shall hold office
for an indefinite term, not to exceed five years, that expires at
the regular meeting of shareholders next held after the director's
election and until a successor is elected and has qualified, or
until the earlier death, resignation, removal, or disqualification
of the director.
2.2 Removal. The Board of Directors or the shareholders may remove any
director of the corporation at any time, for cause or without cause.
New directors may be elected at a meeting at which directors are
removed.
2.3 Board Meetings, Notice. The Chief Executive Officer (if a director),
the Chairman of the Board of Directors (if one is elected) or
Directors comprising at least one third of the number of directors
then in office may call a Board meeting by giving five days notice
if by mail, or two days notice if by telephone, telex, telegram, or
in person, to all directors of the day or date and time of the
meeting. Meetings of the Board of Directors may be held at the day
or date, time, and place, as shall be determined by the Board. If
the day or date, time, and place have been announced at a previous
meeting of the Board, or if a meeting schedule is adopted by the
Board, no notice is required. In absence of a designation by the
Board of Directors, Board meetings shall be held at the principal
executive offices of the corporation.
2.4 (a) Advance Written Consent or Opposition. Any member of the Board
or a committee thereof, as the case may be, may give advance written
consent or opposition to a proposal to be acted on at a Board or
committee meeting. If a director or committee member is not present
at the meeting, advance written consent or opposition to a proposal
does not constitute presence for the purpose of determining whether
a quorum exists, but such advance written consent or opposition
shall be a vote in favor of or against the proposal or resolution
acted upon at the meeting is substantially the same or has
substantially the same effect as the proposal or resolution to which
the member of the Board or committee has consented or objected.
(b) Action Without Meeting. Any action, other than an action
requiring shareholder approval, may be taken by written action
signed by the number of directors that would be required to take the
same action at a meeting of the Board at which all directors were
present. An action
2
<PAGE>
requiring shareholder approval required or permitted to be taken at
a board meeting may be taken by written action signed by all the
directors. Any such written action is effective when signed by the
required number of directors, unless a different effective time is
provided in the written action. When written action is taken by less
than all directors, all directors shall be notified immediately of
its text and effective date. Failure to provide the notice does not
invalidate the written action. A director who does not sign or
consent to the written action has no liability for the action or
actions taken.
ARTICLE III
OFFICERS
3.1 Election; Term of Office; Removal. The Board of Directors shall
elect a Chief Executive Officer and Chief Financial Officer, and may
elect such other officers as it may deem necessary for the operation
and management of the corporation, each of whom shall have the
duties and responsibilities incident to the offices which they hold
or as determined by the Board. Officers need not be directors or
shareholders. Without limiting the foregoing, the Board may elect a
Chairman of the Board, President, one or more Vice Presidents, a
Treasurer, a Secretary and such assistant officers as it may
designate with titles to describe their duties, functions or special
responsibilities. Officers shall hold office at the will of the
Board for an indefinite term until their successors are elected and
qualified. Any officer elected or appointed by the Board of
Directors may be removed by the Board at any time with or without
cause.
ARTICLE IV
AMENDMENTS
4.1 Subject to the power of shareholders to adopt, amend, or repeal
these Bylaws as provided in Minnesota Statutes, Section 302A.181,
Subdivision 3, any Bylaw may be amended or repealed by the Board of
Directors at any meeting, provided that, after adoption of the
initial Bylaws, the Board shall not adopt, amend, or repeal a Bylaw
fixing a quorum for meetings of shareholders, prescribing procedures
for removing directors or filling vacancies in the Board, or fixing
the number of directors or their classifications, qualifications, or
terms of office. The Board may adopt or amend a Bylaw to increase
the number of directors.
3
<PAGE>
ARTICLE V
INDEMNIFICATION
5.1 The corporation shall indemnify persons for such expenses and
liabilities in such manner, under such circumstances, and to the
extent required by Minnesota Statutes, Section 302A.521.
4
EXHIBIT 5
CHARLES CLAYTON
ATTORNEY AT LAW
527 Marquette Avenue South
Minneapolis, MN 55402
(612) 338-3738
Fax (612) 338-7508
August 23, 1999
Cool Can Technologies, Inc.
21700 Oxnard Street, Suite 1550
Woodland Hills, CA
Gentlemen:
I have acted as counsel for the company in connection with the
preparation of the Registration Statement, and, based on this, I am of the
opinion that:
1. The company is a corporation, duly organized, validly existing, and
in good standing under the laws of the State of Minnesota, with corporate
authority to conduct the business in which it is now engaged, and as described
in the Registration Statement.
2. The shares have been duly authorized, and, when issued and
delivered, will be validly issued, fully paid and nonassessable and free from
preemptive rights, will be without cumulative voting rights and will conform to
the description in the Prospectus.
3. There is not pending, or to the knowledge of counsel, threatened,
any action, suit, or proceeding before or by any court or governmental agency or
body to which the company is a party, or to which any property of the company is
subject, and which, in the opinion of counsel, could result in a material
adverse change in the business, business prospects, financial position or
results of operations, present or prospective, of the company or of its
properties or assets.
I consent that this opinion be filed as an exhibit to the Registration
Statement, and to the use of my name in the Registration Statement under the
caption "Legal Matters."
Cordially,
/s/ Charles Clayton
Charles Clayton
EXHIBIT 10.1
SALE OF PATENT AGREEMENT
THIS AGREEMENT made as of the 15th day of June, 1998.
BETWEEN:
EDWARD M. HALIMI, Businessman, of 6155 Carpinteria Avenue, Carpinteria,
California 93013
(hereinafter called the "Vendor")
AND:
COOL CAN TECHNOLOGIES, INC., a Minnesota corporation, having an office
at 21700 Oxnard Street, Suite 1550, Warner Center, Woodland Hills,
California 91367
(hereinafter called the "Purchaser")
WHEREAS letters of patent of the United States, Number 5,609,038 dated the 11th
day of March, 1997 (the "Patent"), have been issued to the Vendor for
SELF-CHILLING BEVERAGE CONTAINER AND PARTS THEREFOR as described in Schedule A
hereto;
AND WHEREAS the Purchaser is desirous of purchasing the Patent and all the
rights of the Vendor thereunder.
NOW THEREFORE in consideration of the mutual covenants and agreements herein
contained, the parties agree as follows:
1. The Vendor shall sell, for the purchaser price hereinafter mentioned, the
Patent and all his rights thereunder together with the invention covered by the
Patent and all interest of the Vendor of, in and to the invention and Patent
with all powers and privileges of any kind or nature.
2. The purchase price for the Patent and the other rights is the sum of $1.00
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged.
3. The Vendor shall, upon the request of the Purchaser, execute and deliver to
the Purchaser an assignment of the Patent hereinbefore mentioned and any other
instrument or instruments that may be required for an effectual transfer of the
Patent, invention, rights and other interests hereinbefore mentioned to the
Purchaser, which assignment and other instruments shall be prepared by the
Vendor at his own expense and shall be in such form as may be required by the
Rules of Practice of the United States Patent and Trademark Office for the full,
unqualified and complete assignment and transfer of all the rights hereinbefore
mentioned.
<PAGE>
2
4. This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors, assigns and personal representatives.
5. This Agreement may be executed in counterparts which together shall form one
and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
THE COMMON SEAL OF )
COOL CAN TECHNOLOGIES, INC. )
was hereunto affixed in the )
presence of: )
)
)
/s/ Bruce Leitch )
- ----------------------------------------
Authorized Signatory )
)
)
)
- ----------------------------------------
Authorized Signatory )
SIGNED, SEALED AND DELIVERED )
BY EDWARD M. HALIMI )
in the presence of: )
)
)
/s/ Bruce Leitch )
- ----------------------------------------
Signature ) /s/ Edward M. Halimi
) ------------------------------------
Bruce Leitch EDWARD M. HALIMI
- ----------------------------------------
Name )
)
217 - 5535 Canoga Ave. )
- ----------------------------------------
Address )
)
Woodland Hills, CA )
- ----------------------------------------
EXHIBIT 10.2
[LOGO]
-------------------------------------------------------------------
PROPOSAL COOL CAN DEVELOPMENT
PHASE ONE
Proposal No. COOL CAN1
November 6, 1998
FOR COOL CAN TECHNOLOGIES, INC.
21700 Oxnard Street
Suite 1550
Woodland Hills, CA 91367
Ph (818) 593-2282
Fax (818) 593-2283
BY CALIFORNIA MANUFACTURING TECHNOLOGY CENTER
Los Angeles Regional Office
13430 Hawthorne Boulevard
Hawthorne, CA 90250
Phone: 800-300-2682
Fax: 310-676-8630
Alex Domaszewicz, P.E.
-------------------------------------------------------------------
<PAGE>
BACKGROUND
The California Manufacturing Technology Center (CMTC) is pleased to
propose supporting the development of a beverage can with an integrated
cooling system for Cool Can Technologies.
Cool Can has patented a system for a beverage can with an integrated
cooling system.
OBJECTIVE
The objective of the project is to take the patent drawings and develop
prototype drawings and manufacture prototypes for testing and final
development, as well as establishing base line costs.
TASKS
THE FOLLOWING TASKS ARE PROPOSED FOR PHASE 1:
* Develop prototype sketches on AUTOCAD from existing patent drawings.
It is expected that ten detail drawings and two assembly drawings
will be required.
* Help select and recommend materials.
* Help select and recommend production processes.
* Obtain prototype quotations for parts and tooling.
* Obtain ROM production quotations for parts and tooling.
* Prepare test plan.
* Support prototype fabrication.
FOLLOW ON PHASES WILL BE PROPOSED AT THE TERMINATION OF THIS PHASE.
<PAGE>
DELIVERABLES
The CMTC will deliver:
* Prototype drawings on AUTOCAD, approximately 10 weeks ARO subject on the
availability of data from can and cartridge manufacturers and patent
drawing quality.
* Prototype costs and quotations, approximately 4 to 8 weeks after drawing
are available, and depending on vendors.
* ROM production cost estimate, approximately 4 to 8 weeks after drawing are
available, and depending on vendors.
* Test Plan Draft, approximately 8 weeks after drawings.
* Prototype manufacturing support will be based on time and material as
required.
It is expected that Cool Can will provide support and set up meetings as
required with the cartridge manufacturers, the can manufacturers and the
fillers. It is assumed that these suppliers will provide their unit costs as
well as any capital equipment costs on a timely basis. If the above sources have
to be developed additional cost and schedule will be required by CMTC.
This proposal includes CMTC's Terms and Conditions, attached, which is
incorporated herein by this reference. CMTC WILL SIGN A CONFIDENTIALITY
AGREEMENT with Client if required.
PAYMENT SCHEDULE
The fees for this phase are shown on the attached contract.
We look forward to working with you on this proposed project.
<PAGE>
CALIFORNIA MANUFACTURING TECHNOLOGY CENTER Agreement/Contract
Hawthorne, California
Toll Free: 800-300-2682 (In CA) [LOGO]
LOS ANGELES REGIONAL OFFICE
13430 Hawthorne Boulevard CONTRACT NUMBER: 63597
Los Angeles, CA 90250-5806 DATE: 11/6/98
PHONE: 310-355-3060 FAX: 310-676-8630 REGIONAL APPROVAL:
CLIENT INFORMATION
COMPANY NAME & ADDRESS CLIENT CONTACT TITLE
- ---------------------- -------------- -----
Cool Can Technologies, Inc. BRUCE T. LEITCH PRESIDENT
21700 Oxnard Street
Woodland Hills, CA 91367 CONTACT PHONE CONTACT FAX
------------- -----------
818-593-2282 818-593-2283
START DATE COMPLETE DATE PO NUMBER
---------- ------------- ---------
11-30-98 04-30-98
Client shall provide reasonable information needed by CMTC to perform the scope
of work outlined in this Agreement/Contract. In addition, the Client shall
provide access for CMTC personnel and its contractors to the manufacturing
facilities of the Client and to its personnel knowledgeable in its current
operations. CMTC agrees to make every reasonable effort to minimize its demands
on the time and energies of client's personnel and facilities. All proprietary
information and data will be handled in accordance with the Terms and Conditions
on the reverse side or attached to this page.
The California Manufacturing Technology Center ("CMTC") was established to
assist small- and medium-sized manufacturing companies remain competitive. The
federal and state funds invested allow the CMTC to provide services to
manufacturing companies at a fee that is affordable. No Client proprietary
information will be disseminated. There is an obligation by the CMTC to
follow-up and measure the impact on Client as a result of CMTC services. Upon
execution of this agreement and ensuing contract, the Client agrees to allow the
CMTC to gather data at subsequent intervals after completion of the contract.
Baseline data will be established during the initial interviews; the first
follow-up will occur six months after completion of the contract and then again
at one year. After that, data will only be requested on an annual basis.
ITEM DESCRIPTION FEES
- ---- ----------- ----
1 COOL CAN DEVELOPMENT, PHASE 1 PER PROPOSAL DATED 11/6/98 $25,000.00
PROTOTYPE FABRICATION SUPPORT WILL BE BILLED OVER THE
ABOVE ON A MONTHLY BASIS AT A RATE OF $70.00 PER HOUR NOT
TO EXCEED 8 HOURS PER WEEK UNLESS OTHERWISE AUTHORIZED.
CMTC AGREES TO PROVIDE SERVICES, AS DESCRIBED ABOVE, FOR THE
BASIC SUM OF: $25,000.00
PAYMENT TERMS
- -------------
$7000.00 DUE UPON SIGNING, WITH $6000.00 ON DRAWING DELIVERY, $6000.00 ON COST
DELIVERY AND THE BALANCE ON TEST PLAN DELIVERY. IN ADDITION PROTOTYPE
FABRICATION SUPPORT WILL BE BILLED ON A MONTHLY BASIS BASED ON THE
ABOVE RATES.
ADDITIONAL TERMS AND CONDITIONS ARE ON THE REVERSE SIDE OR ATTACHED TO THIS PAGE
Any alteration or deviation from the above description may result in additional
charges to Client. Such charges will be made only upon written agreement between
Client and CMTC. Overdue accounts will be charged interest at the rate of 1.5%
per month. In the event it becomes necessary to enforce this agreement by
litigation, the prevailing party shall be entitled to costs, attorney and
collection fees. This Agreement/Contract may be withdrawn by CMTC at any time
before CMTC accepts this agreement.
ACCEPTANCE OF AGREEMENT: The above prices, scope of work, specifications and
conditions, set forth above and in the Terms and Conditions on the reverse side
of this page which are incorporated herein by reference, are satisfactory and
are hereby accepted. CMTC is authorized to do the work as specified. Payment
will be made as outlined above. It is understood and agreed this is work not
provided for in any other agreement and no contractual rights arise until this
Agreement/Contract is accepted in writing by both Client and CMTC. This
Agreement/Contract may be referred to as an agreement, proposal or contract.
This agreement can only be accepted by CMTC upon the execution of this document
by an authorized employee of CMTC.
ACCEPTED BY
California Manufacturing Technology Center
Signature: /s/ Bruce Leitch Signature: /s/ [ILLEGIBLE]
DATE: 12/15/98 TITLE: PRESIDENT DATE: 11/9/98 TITLE: Director Burbank
Center
<PAGE>
CMTC TERMS AND CONDITIONS
PAYMENT
The price quoted in this Agreement/Contract includes all fees and expenses, net
of the applicable financial support from sponsors of CMTC, for CMTC to complete
its work outlined in the proposal. CMTC will invoice Client at the end of each
month for the amount due. Work in respect of this agreement will commence as
soon as mutually convenient to both parties after having signed the agreement.
Final payment is due upon completion of work and delivery of any reports as
stated in the agreement unless prior arrangements have been made.
LIMITED LIABILITY
CMTC's responsibility shall be limited to applying its reasonable best efforts
in the performance of such work by CMTC employees, agents and contractors within
the limits of time and funds set forth above. Therefore, the parties agree that
Client shall have sole responsibility for the consequences of any use or
inability to use any information, apparatus, method, or process obtained from
CMTC or resulting from this agreement, and CMTC, its employees, agents, and
contractors will not be liable to Client, or to anyone who may claim any right
due to a relationship with Client, for any acts or omissions in the performance
of the services under the terms of this agreement or on the part of the
employees, contractors or agents of CMTC unless such acts or omissions are due
to willful misconduct. Client will indemnify and hold harmless the CMTC and the
State of California from any obligations, costs, claims, judgments, attorneys'
fees, and attachments arising from, growing out of, or in any way connected with
the services rendered to Client under the terms of this agreement, unless CMTC
is judged by a court of competent jurisdiction to be guilty of willful
misconduct.
This proposal remains open for sixty (60) days from the date first written at
the top of the reverse side of this page unless revoked by CMTC in writing.
ASSIGNMENT AND ADMINISTRATION
CMTC will determine the method, details, and means of performing the above
described services. Neither party may assign this agreement or any of its rights
or obligations without the prior written consent of the other party; provided
however, CMTC may assign and reassign staff, agents and independent contractors
to its execution of the proposed project. Client agrees to comply with all
reasonable requests of CMTC, its employees, agents and contractors and provide
access to all documents reasonably necessary to the performance of the services
to be performed by CMTC under this agreement.
The CMTC contact for contract questions can be reached at (310) 355-3060.
OWNERSHIP OF INTELLECTUAL PROPERTY
Any experience and expertise that directly or indirectly CMTC brings to this
project shall remain the property of CMTC. Acceptance of this agreement does not
preclude CMTC's undertaking work of this general nature for others, nor does it
preclude CMTC presentation or publication of scholarly or technical works in
this area, so long as no Proprietary Information of Client (as defined below)
specific to this project is divulged. CMTC must also grant certain rights to the
sponsors of CMTC concerning any intellectual property created during the course
of CMTC activities. Furthermore, Client agrees that it obtains no rights to any
Proprietary Information, intellectual or property, invention or discovery made
or conceived under this proposal, except as specifically granted by CMTC in
writing.
PROPRIETARY INFORMATION
The dissemination of information is an essential policy of CMTC, and the parties
agree that CMTC's client list is not considered to be Proprietary Information or
confidential and that Client's name as a CMTC client may be divulged to other
potential clients of CMTC.
However, both parties recognize that each must hold in confidence any
confidential, proprietary or restricted information or data only if so
identified and marked "Proprietary Information" when received from the other
party ("Proprietary Information"). Each party agrees to exercise all reasonable
efforts not to publish or otherwise reveal the Proprietary Information to
others, unless information has (1) become publicly known through no fault or
breach of this agreement by the recipient, (2) been rightfully received from a
third party without restriction on disclosure and without breach of this
contract, (3) been independently developed by the receiving party, or (4) been
disclosed pursuant to a requirement of a governmental agency or a court of law.
The provisions of this section shall survive for five (5) years, regardless of
the termination or expiration of this project.
ENTIRE AGREEMENT; WAIVERS; GOVERNING LAW, ETC.
This agreement contains the entire agreement between CMTC and Client with
respect to the subject matter herein and CMTC and Client agree that any
modification to the agreement shall be in writing, signed CMTC and Client and
expressly stating that it is intended to modify this agreement. No waiver or
breach hereof shall be deemed to constitute a waiver of a future breach. This
agreement shall be governed by the internal laws of the State of California
without regard to principles of choice of law or conflicts of laws. Nothing
contained in this agreement is intended to or shall be construed to create any
rights in any third party as third party beneficiary. Each of CMTC and Client
represents and warrants to the other that, with respect to themselves, all
action necessary to bind them to the terms of this agreement have been taken as
of the date set forth under their respective signatures and such further action
will be taken to cause CMTC and Client to comply with the terms of this
agreement as may be necessary.
NO SOLICITATION
Client hereby agrees that for a period of 12 months (the "No Solicit Period")
following the date set forth across from its signature on the reverse side of
this page, it will not nor will it cause or permit any of its officers,
employees, partners, owners, directors, subsidiaries or affiliates to, directly
or indirectly, solicit or cause to be solicited for any person or entity any
individuals who currently are, or during the No Solicit Period are, employees of
CMTC for the purpose of obtaining their respective employment, consultant or
other like services.
ARBITRATION
Any dispute or claim arising out of or concerning this agreement shall be
settled and determined by one arbitrator in the City of Los Angeles, California
in an arbitration proceeding conducted according to the commercial rules of the
American Arbitration Association at that time. Such decision will be final and
binding on the Parties. The Arbitrator shall award costs and expenses, including
reasonable attorneys' fees, to the prevailing party and make the award in
writing with an opinion discussing the evidence and setting forth the reasons
for the award. If any legal action or proceeding, other than arbitration is
brought in connection with this agreement, the successful or prevailing party
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which the party
may be entitled.
CONSTRUCTION
This agreement shall be construed to have been drafted equally by all parties.
The language of all parts of the agreement shall be construed as a whole,
according to its fair meaning, and any presumption or other principle that the
language herein is to be construed against any party shall not apply. The
language of the agreement shall not be construed for or against any particular
party. The headings used herein are for reference only and shall not affect the
construction of this agreement.
<PAGE>
[LOGO] California Manufacturing Technology Center
800-300-CMTC Headquarters
ALEX DOMASZEWICZ, P.E.
Manager Design Engineering
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INDUSTRIAL Composite manufacturing, tool design and product design
FAMILIARITY: including sandwich structures, glass and plastic transparencies,
thermoforming, compression molding and autoclaving. Hydraulic
systems and mechanical component design and manufacturing
including mechanical drives, gearing and actuators. Plant design
and construction including piping and valves, pumps, heat
exchangers, condensers and water treatment. Ocean engineering
winches and buoys. Extensive background in both commercial and
aerospace markets. Versed in AutoCAD drafting and modeling and
ALGOR software for finite element analysis (FEA).
WORK HISTORY: Manager Design Engineering - California Manufacturing
Technology Center providing design and production solutions to
small and medium California manufacturers.
Technical Manager and staff engineer - Pilkington PLC in the
manufacturing of aircraft transparencies and composite
products for the marine and aerospace markets.
Project Engineer - Ford Aerospace involved in missile and land
vehicle manufacture and design of mechanical systems and
components and in the development of battery products.
System Engineer - Bechtel Corporation assigned to the design
and construction of fossil and nuclear power plants.
Design Engineer - Ocean Systems Inc. involved in the design of
submersibles, undersea piping, winches and buoys.
EDUCATION: BS in Mechanical Engineering, California State University at Los
Angeles
MS in Mechanical Engineering, California State University at Los
Angeles
RECENT COURSES:
Rapid Prototyping.
Product Acceleration: Proven Design Techniques for Reducing
Time to Market.
Advanced Finite Element Linear Stress Analysis.
Designing Injection molded Parts for Assembly.
PROFESSIONAL: Registered Professional Engineer in California, Member ASME,
SME, SAMPE.
SPECIALIZATION: MECHANICAL ENGINEERING DESIGN MANAGEMENT
LANGUAGES: Fluent Spanish
