U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10SB
Amendment #4
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. is a Minnesota corporation formed on April
1, 1998. There have been no bankruptcy, receivership or similar proceedings.
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.
A market survey was conducted to gauge consumer interest in purchasing
a self chilling beverage container. The survey was conducted by an outside
Company, and not for this Company. The sample group was 300 persons, 150 male
and 150 female between 13 and 39 years of age. When asked if they would purchase
a self chilling can if available, the response was: 42% would purchase, 45%
would maybe purchase, 10% purchase if necessary, 2% maybe not purchase and 1%
not purchase.
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 $.25 -
$.30 per can, and may be used on a 12 ounce can or a 16 ounce can. The estimate
is based on preliminary quotes from manufacturers of the component parts. 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
consumer does not have the option to deactivate the device on the can.
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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 during the seaming process after the can has
been filled. Initial engineering diagrams have been completed for equipment
which will successfully integrate the inclusion of the chilling module insert
into a high speed canning line. There can be no assurance that the product can
be incorporated 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. The patent expires 20 years from the
filing date of August 22, 1995, on August 21, 2015.
Internationally, the Company has been granted coverage in some foreign
countries and others are pending. National phase patent applications were filed
on June 20, 1999 so that patent protection may be granted in 87 countries,
these are pending. National phase patent protection is patent treaty language
that indicates that the Company is beginning the process of filing for patent
protection in foreign countries. Depending on the country, the grant of patent
protection may take from 1 to 8 years. In the interim, preliminary protection
by priority is established as of the filing date. The Company anticipates
patent 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 Company received a response from
the Patent Office with a request to more narrowly define the scope of the
product, which has been done, and the Company is awaiting a response. The
intention is to receive a notice of allowance, which means that the examining
attorney has not found any registered or pending marks which would prevent
registration, from the Patent Office to register various names which describe
both the product and the process
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involved in the manufacture of a self chilling beverage container. There can be
no assurance that the requested trademark names will ultimately be issued.
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. FDA approval
is not required as long as there is compliance with all currently published
guidelines. The Company also expects that licensees who will be filling the Cold
Can with beverages will comply with the appropriate FDA regulations. All
licensees will have a contractual obligation to produce products consistent with
the laws of their country, as well as additional quality control measures
requested by the Company, though specific language is unknown at this time.
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. The EPA has not specifically
approved the Company's product design, but it does meet the standards of the
EPA. There have been no costs to date associated with compliance, nor are any
anticipated.
Various safety features are incorporated into the design and
manufacture of the Cold Can. The primary safety feature becomes important in a
situation such as throwing the can in a fire. The gasses in the cylinder will
harmlessly escape at a certain temperature through a safety valve. The uses of
C02 capsules in things like 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.
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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. Two of the competitors are private
companies and little is known about their size or financial capabilities, the
third is a publicly traded Company, but its news releases do not reveal the
Company size or revenue contributions due to the development of a self chilling
can.
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. There can be no assurance that the Company will be able to
successfully compete against its competitors.
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
because the external device must be added in some manner, which would require
another step in the manufacturing process. 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.
The Company has one employee, its President, at this time. The Company
spent approximately $60,000 on research and development in the past year.
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ITEM 2. PLAN OF OPERATION
The independent auditor for the Company issued a "going concern"
opinion with the audit. The reason for the going concern opinion was that the
Company has no revenues.
The Company has expended $234,850 since inception; the expenditures
were: audit and legal fees - $46,850, production drawings - $15,000, product
development - $45,000, financial consulting - $45,000, management fees -
$68,000, and office expenses - $15,000.
The Company estimates that capital requirements for the next 12 months
will be approximately $350,000. It will need an additional $150,000 after about
3 months, another $150,000 after about 9 months, and the last $50,000 at the end
of the year.
The Company plans to fund operations for the coming year through sales
of stock in private placements and joint venture financings with beverage
industry partners. The Company has had some discussions regarding financing, but
there have been no agreements made, no letters of intent, and no final
agreements made.
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. The
estimated cost is $30,000 and the time frame is 3 months.
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. The estimated cost
is $20,000 and the time frame is 2 months.
4. Pre-production prototype construction. Three-dimensional construction of all
parts including preliminary rubber molds. The estimated cost is $150,000 and the
time frame is 4 months.
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5. Testing of pre-production prototypes.
6. Refine designs to incorporate test results and finalize production
specifications and drawings. The estimated cost is $5,000 and the time frame is
1 month.
7. Begin to source factory production facilities for all customized parts and
molding requirements. The estimated cost is $5,000 and the time frame is 2
months.
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
estimated cost is $5,000 and the time frame is 14 months.
The anticipated cost for the plan is approximately $215,000, the total
anticipated time for the plan is 14 months. There are two risks inherent in the
plan; the lack of capital currently, and the ability to raise additional
capital, and the inability to get production related data from third parties on
a timely basis.
The Company has an agreement with California Manufacturing Technology
Center ("CMTC") in order to assist in the execution of its product development
and manufacturing processes plan. CMTC has agreed to provide prototype drawings
on AutoCad, component part costs and prototype fabrication as required. The
Company has paid $13,000, with $12,000 to be paid upon completion. The Company
has also paid $2,240 for work done on prototype fabrication. CMTC expects its
design work to be completed by the end of October, 1999.
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. ISO and CE Marking are international quality
management standards. Most European countries require such certification.
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
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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 Company has not identified a specific
site. However several realtors have submitted sites and there seems to be an
ample supply in southern California. The estimated cost of such a site is
approximately $6,000 per month. The intent is to demonstrate an actual canning
process placing chilling module inserts in both 12 and l6 oz 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. The Company does not mean to represent that it will
come anywhere near the success of those companies, and there is no guarantee
that the strategy will be successful.
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
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 $.005
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per unit ($.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 terms of the licensing agreement were based on other distribution
and licensing agreements that were reviewed by the Company, bearing in mind what
is considered reasonable in the beverage industry. The Company has attempted to
create terms that will be as consistent as possible, taking into account the
variables in a global situation. The Company is aware that any new product will
sell for what the market will ultimately bear. There can be no assurance that
the Company will be able to obtain these or any commercially reasonable terms
from licensees.
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 through distribution of
promotional materials and demonstrating the cold can technology to prospective
licensees. The cost of advertising in phase one is estimated to be approximately
$35,000.
The second phase of advertising will be more consumer oriented and
similar to the advertising campaign of sugar substitute "NutraSweet". There will
be no specific product or brand advertised, only the technology to make
consumers aware that they may purchase beverages in a self chilling container.
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. The Company does not mean to imply that it
will have the success of NutraSweet, and there is no assurance that the
advertising will be successful. The estimated cost of phase two is unknown at
this time.
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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.
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
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of highly specialized equipment in order to produce finished goods, the Company
will undertake to purchase it's own canning line. The acquisition of a canning
line to co-pack would be conditional upon significant interest from smaller
beverage companies without the financial capability to purchase the packaging
equipment required to produce the product. A canning line used for research and
development purposes would not have the volume capability to be used in a
commercial arrangement.
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.
Co-pack means that the production facility assumes the responsibility for
packaging another Company's brand. The costs of such a facility will not be
determined until potential customers and the projected volume have been
identified. 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 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.
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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
The Company has rented office space of approximately 600 square feet,
at a monthly rental of $600 per month. The lease ends on December 31, 1999. The
Company has arranged to rent the same space, for the same rental, on a month to
month basis after the lease expires.
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.
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%
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Directors and Officers 2,750,000 15%
as a group
Delta Technologies Group, Inc. is owned by David St. James, Melanie St.
James and George Baxter. General Beverage Corp. is a Nevada corporation; the
largest shareholder is David St. James, and there are 10 other shareholders.
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. Mr. Leitch has been with the Company since inception.
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. Mr. McNabb became a director on May 20, 1999.
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 from 1992 to 1996. Mr. Lee
has been with the Company since inception.
ITEM 6. EXECUTIVE COMPENSATION
There are no officers or directors that received any compensation
during the last year, except as disclosed in Certain Relationships and Related
Transactions.
Directors of the Company are not compensated.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company did have an agreement to share office space with Turbodyne,
and used certain office personnel for an agreed price of $1,500 per month. This
arrangement ended on May 31, 1999.
Mr. Leitch has acted as a management consultant to the Company and is
paid under the arrangement the sum of $8,500 per month.
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
Tandoz Bahremand 7/98 50,000 $50
Yvonne Bahremand 7/98 75,000 $75
Shannon Callahan 7/98 200,000 $200
Barry Champine 7/98 775,000 $775
Armand Constantine 7/98 855,000 $855
Harrison Cornwall 7/98 910,000 $910
Delta Technologies Group, Inc. 7/98 2,500,000 $2,500
Richard Donaldson 7/98 1,500,000 $1,500
General Beverage Corporation 7/98 2,000,000 $2,000
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 7/98 200,000 $200
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
Ormist Majestiv 7/98 820,000 $820
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Louise Marchand 7/98 800,000 $800
Alice Nowek 7/98 100,000 $100
Julie Nowek 7/98 125,000 $125
O'Neill Family Trust 7/98 500,000 $500
John Picken 7/98 895,000 $895
John Reay 7/98 600,000 $600
David Ryan 7/98 200,000 $200
David St. James 7/98 300,000 $300
Melanie St. James 7/98 300,000 $300
Heinz Von Rosen 7/98 850,000 $850
Arjang Zendel 7/98 75,000 $75
Azita Zendel 7/98 150,000 $150
Ulrich Zgraggen 7/98 900,000 $900
Charles Clayton 8/98 5,000 $5
Patricia King 8/98 5,000 $5
Chasha Kuzedki 8/98 5,000 $5
All of the sales in the above list were made pursuant to a Memorandum
that provided full disclosure at $.001 per share. The Company relied upon Rule
504 in the sales. The price was determined by the Board of Directors on the
basis that the Company was at an early stage, but did possess a registered
patent for its product as well as a business plan, and the Company was in need
of some seed money. All of sales were to acquaintances of management, and their
friends. There was no commission paid on any of the sales.
482047 B C, Ltd. 9/98 50,000 $25,000
Jason Aisenstat 9/98 10,000 $5,000
Carmen Basa 9/98 10,000 $5,000
Milan Ilich 9/98 50,000 $25,000
Harley Mayers 9/98 20,000 $10,000
Gus Walroth 9/98 20,000 $10,000
Leo Wong 9/98 20,000 $10,000
Samuel Yue 9/98 20,000 $10,000
All of the sales in the above list were made pursuant to a Memorandum
that provided full disclosure at $.50 per share. The Company relied upon Rule
504 in the sales. The price was determined by the Board of Directors on the
basis that there had been positive meetings with both a beverage manufacturer
and an industrial design firm, and more funding would be required for the
Company to continue to progress to a product. All of sales were to acquaintances
of management, and their friends. There was no commission paid on any of the
sales.
Bruce Braganold 4/99 20,000 $30,000
Chris Brock 4/99 500 $750
Shane Epp 4/99 10,000 $15,000
Wendy Field 4/99 2,000 $3,000
15
<PAGE>
Brian Fleming 4/99 500 $750
Gerald Haggard 4/99 2,000 $3,000
Karen Kleinwort 4/99 33,333 $49,999
Jeffrey Murchison 4/99 1,000 $1,500
Robert Parker 4/99 1,500 $2,250
Michael Richardson 4/99 2,000 $3,000
Heidi Schuerman 4/99 800 $1,200
Ian Shepherd 4/99 1,000 $1,500
Scott Houghton 4/99 33,333 $49,999
All of the sales in the above list were made pursuant to a Memorandum
that provided full disclosure at $1.50 per share. The Company relied upon Rule
504 in the sales. The price was determined by the Board of Directors on the
basis that the Company had signed an agreement with the California Manufacturing
and Technology Center, and work was well under way on the engineering program
and further funding was required to complete the program. All of sales were to
acquaintances of management, and their friends. There was no commission paid on
any of the sales.
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 100,000,000 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
16
<PAGE>
converted into common shares. There are no other preferences. There are no
preferred shares outstanding.
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 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.
17
<PAGE>
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
9. Patent acquisition
10. CMTC agreement
18
<PAGE>
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: February 22, 2000 Cool Can Technologies, Inc.
/s/ Bruce T. Leitch
------------------------------------
Bruce T. Leitch, President, Director
/s/ Jerry McNabb
------------------------------------
Jerry McNabb, Director
/s/ Andrew O. D. Lee
------------------------------------
Andrew O. D. Lee, Secretary, Director
19
<PAGE>
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 sheets of Cool Can
Technologies, Inc., a Minnesota corporation, and a development stage Company, as
of June 30, 1999 and 1998, and the related statements of operations,
stockholders' equity (deficit) and cash flows for the periods 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 1998, and the results of its operations and its cash flows for
the periods 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 Notes 1 and 6 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 SHEETS
June 30, 1999 and 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
--------- -------
<S> <C> <C>
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 $ 6,345
STOCKHOLDERS' EQUITY (DEFICIT) (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) (6,345)
--------- -------
44,919 (6,345)
--------- -------
$ 119,796 $ --
========= =======
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period From Period From
Inception Inception
(April 1, 1998) (April 1, 1998)
Through Year Ended Through
June 30, June 30, June 30,
1999 1999 1998
--------------- ---------- ---------------
<S> <C> <C> <C>
Revenues $ -- $ -- $ --
Administrative pre-opening and development expenses (234,850) (228,505) (6,345)
---------- ---------- -------
Net loss $ (234,850) $ (228,505) $(6,345)
========== ========== =======
Loss per common share - basic $ (.03) $ (.03) $ --
========== ========== =======
Loss per common share - diluted $ (.03) $ (.03) $ --
========== ========== =======
Weighted average outstanding shares 9,059,828 9,059,828 --
========== ========== =======
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Stock During the
--------------------- Amount Subscription Development
Shares Amount Per Share Receivable Stage
---------- -------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance, April 1, 1998 - $ - $ - $ -
Net loss - - - (6,345)
---------- -------- --------- ---------
Balance, June 30, 1998 - - - (6,345)
Shares issued for cash 17,820,000 17,820 .001 - -
Shares issued for cash 200,000 100,000 .50 - -
Shares issued for cash 36,820 55,230 1.50 - -
Shares issued for receivable 71,146 106,719 1.50 (106,719) -
Payment on receivable - - 106,719 -
Net loss - - - (228,505)
---------- -------- --------- ---------
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
<TABLE>
<CAPTION>
Period From Period From
Inception Inception
(April 1, 1998) (April 1, 1998)
Through Year Ended Through
June 30, June 30, June 30,
1999 1999 1998
-------------- -------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(234,850) $(228,505) $(6,345)
Increase in prepaid expenses (1,040) (1,040) --
Increase in accounts payable 74,877 68,532 6,345
--------- --------- -------
(161,013) (161,103) --
CASH FLOWS FROM INVESTING ACTIVITIES:
Intangibles (24,000) (24,000) --
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 279,769 279,769 --
--------- --------- -------
Increase in cash 94,756 94,756 --
Cash:
Beginning -- -- --
--------- --------- -------
Ending $ 94,756 $ 94,756 $ --
========= ========= =======
</TABLE>
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 for income
tax purposes.
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. In accordance with SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" as circumstances dictate, the Company evaluates
whether changes have occurred that would require revision of the
remaining estimated lives of recorded long-lived assets, including
intangibles, or render those assets not recoverable. If such
circumstances arise, recoverability is determined by comparing the
undiscounted net cash flows of long-lived assets to their
respective carrying values. The amount of impairment, if any, is
measured based on the projected discounted cash flows using an
appropriate discount rate. At this time, the Company believes that
no significant impairment of long-lived assets, including
intangibles, has occurred and that no reduction of the estimated
useful lives of such assets is warranted. 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.
6
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Note 1. Nature of Business and Summary of Significant Accounting Policies
(Continued):
START-UP COSTS:
Start-up costs incurred in connection with start-up activities are
charged to expense as they are incurred.
Note 2. Income Taxes:
For income tax purposes, pre-opening costs are generally deferred
and amortized to expense in future tax returns. Accordingly, the
Company has no tax loss carryforwards. For financial reporting
purposes, realization of the value of book vs. tax timing
differences is dependant upon the Company generating sufficient
taxable income in future years. Because of the development stage
nature of the Company, lack of operating history and potential
future stock sales (which may limit the value of loss
carryforwards) management has eliminated the deferred tax value of
pre-opening costs 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.
7
<PAGE>
COOL CAN TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
Note 6. Company's Continued Existence:
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has sustained substantial losses in its
initial year and is still in the development stage. Additional
funding will be necessary to continue development and marketing of
the product. The Company intends to arrange for the sale of
additional shares of stock to obtain additional operating capital
for at least the next twelve months.
8
