<PAGE>2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d)
Securities Exchange Act of 1934
for Quarterly Period Ended June 30, 2000
-OR-
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from _________ to________
Commission File Number 333-91825
ThermoElastic Technologies, Inc.
----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 51-0387926
----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5446 Canvasback Road, Blaine, WA 98230
----------------------------------------------------------------------
(Address of principal executive offices, Zip Code)
(360) 371-5061
--------------------------------------------------------------------
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
The number of outstanding shares of the registrant's common stock,
August 18, 2000 Common Stock - 17,338,164
<PAGE.3
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
2000 1999
(NOTE 1) (NOTE 1)
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,879 $ 26,926
Accounts receivable 1,754 663
Inventory, net 8,637 11,000
Travel advances 3,000 3,000
---------- ----------
Total current assets 15,270 41,589
---------- ----------
Property and equipment, net 4,561 3,680
Other assets:
Product rights 250,000 250,000
---------- -----------
$ 269,831 $ 295,269
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 52,630 $ 9,025
Due to related parties 245,033 15,460
Product rights payable 75,000 75,000
----------- ------------
Total liabilities 372,663 99,485
----------- ------------
Stockholders' equity:
Preferred stock - -
Common stock 1,734 1,720
Additional paid-in capital 569,459 569,473
Deficit accumulated during the
development stage (661,112) (370,288)
Accumulated other comprehensive income:
Foreign currency translation adjustments (12,913) (5,121)
----------- -----------
Total stockholders' equity (102,832) 195,784
----------- -----------
$ 269,831 $ 295,269
=========== ===========
</TABLE>
Unaudited -- See accompanying notes to condensed financial statements.
<PAGE>4
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
January 21,
Three Months Ended Nine Months January 21, 1999 (Date of
June 30, Ended 1999 to Inception) to
-------------------- June 30, June 30, June 30,
2000 1999 2000 1999 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
REVENUES $ 1,476 $ 317 $ 4,900 $ 326 $ 8,337
COSTS AND EXPENSES:
Cost of sales 1,008 - 2,363 - 4,180
--------- --------- --------- --------- ---------
GROSS PROFIT 468 317 2,537 326 4,157
SELLING, GENERAL & ADMINISTRATIVE 76,951 209,076 293,448 223,592 665,356
--------- --------- --------- --------- ---------
OPERATING LOSS (76,483) (208,759) (290,911) (223,266) (661,199)
--------- --------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest income 13 - 87 - 87
Foreign currency adjustment (12,140) - (7,792) - (12,913)
--------- --------- --------- --------- ---------
NET LOSS $(88,610) $(208,759) $(298,616) $(223,266) $(674,025)
========= ========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 17,338,164 13,801,754 17,323,023 13,518,383
========== ========== ========== ==========
NET LOSS PER PRIMARY AND
DILUTED SHARE $ (.01) $ (.02) $ (.02) $ (.02)
========== ========== ========== =========
</TABLE>
Unaudited -- See accompanying notes to condensed financial statements.
<PAGE>5
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
January 21,
Nine Months January 21, 1999 (Date of
Ended 1999 to Inception) to
June 30, June 30, June 30,
2000 1999 2000
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(298,616) $(223,266) $(674,025)
Adjustments to reconcile net loss to
net cash flows used in operating activities:
Depreciation and amortization - - 344
Changes in assets and liabilities:
Increase in accounts receivable (1,091) - (1,754)
Decrease (increase) in inventory 2,363 - (8,637)
Increase in travel advances - - (3,000)
Increase in due to related parties 229,573 10,000 245,033
Increase in accounts payable 43,605 - 52,084
Increase in product rights payable - 145,000 75,000
Increase in other liabilities - 6,980 -
---------- ---------- -----------
Net cash flows used in operating activities (24,166) (61,286) (314,955)
---------- ---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of product rights - (230,000) (230,000)
Purchase of property and equipment (881) (2,104) (4,326)
Increase in deposits - (5,000) -
Cash acquired in reverse acquisition - - 81
---------- ---------- -----------
Net cash (used for) investing activities (881) (237,104) (234,245)
---------- ---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - 700,915 700,915
Issuance of note receivable - (165,000) -
Cost of acquisition of LPR Cybertech - - (149,836)
---------- ---------- ----------
Net cash flows from financing activities - 535,915 551,079
---------- ---------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (25,047) 237,525 1,879
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 26,926 - -
---------- ---------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,879 $237,525 $ 1,879
========== ========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Purchase of product rights through issuance of stock $ - $ 20,000 $ 20,000
Liabilities not assumed in reverse acquisition $ - $ - $ 2,235
</TABLE>
Unaudited-See accompanying notes to condensed financial statements.
<PAGE>6
THERMOELASTIC TECHNOLOGIES, INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
In the opinion of management, the unaudited financial statements for
the period ended June 30, 2000 (third quarter), reflect all normally
recurring adjustments necessary to fairly present the Company's
financial position and results of operations for the periods indicated.
The accompanying interim financial statements should be read in
conjunction with the financial statements and related notes included in
the Company's 10-KSB for the period ended September 30, 1999, which has
been filed with the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the Company's
annual financial statements have been omitted from the quarterly
financial statements based upon Securities and Exchange Commissions
rules and regulations. Net loss per common and common equivalent share
was computed based on the net loss divided by the weighted average
number of common and common equivalent shares outstanding, unless
antidilutive, during the year presented.
NOTE 2 - OPERATIONAL STATUS
The accompanying consolidated financial statements have been prepared
in conformity with generally accepted accounting principles, which
contemplates continuation of the Company as a going concern. However,
the Company has sustained substantial operating losses in recent years
and for the nine-month period ended June 30, 2000, and the Company has
used substantial amounts of working capital in its operations. At June
30, 2000, current liabilities exceed current assets by $357,393 and
intangible assets comprise a material portion of the Company's assets.
The recovery of these intangible assets is dependent upon achieving
profitable operations and the ability to find additional equity
financing. Management believes that actions presently being taken to
obtain additional equity financing and increase sales provide the
opportunity to continue as a going concern.
Item 2. Management's Discussion and Analysis or Plan of Operations
We are in the initial stages of development with minor revenues and
income and are subject to all the risks inherent in the creation of a
new business. Since our principal activities to date have been limited
to organizational activities, prospect development, and acquisition of
interests, we have no record of any material revenue-producing
operations. Consequently, there is no operating history upon which to
base an assumption that we will be able to achieve our business plans.
PRINCIPAL PRODUCT
ThermoElastic Technologies, Inc., a development stage entity (the
"Company" or "TTI"), was incorporated on January 21, 1999, in the State
of Delaware to carry on the business of marketing and distributing a
new generation acrylic, known as Biocompatible Intraoral Thermo Elastic
Material ("BITEM"), which is anticipated to be sold to dental related
businesses and other allied fields throughout the world. The goal of
TTI is to market products throughout specified geographical locations
in the dental field. Licensing agreements will be entered into with
qualified companies and individuals to expand its use into other
diverse areas and products.
Over the next twelve months, we intend to market and distribute dental
applications in the United States and internationally and to utilize
the World Wide Web in the implementation of our planned business
operations. We shall conduct product research and development as funds
allow. Management possesses the experience to implement our business
plan. No significant equipment purchases are planned over the next
twelve months.
RESULTS OF OPERATIONS
We have received $4,900 in revenue for the nine months ended June 30,
2000, compared to $326 in the period from January 21, 1999 to June 30,
1999. We have incurred $76,951 in selling, general and administrative
expenses for the three months ended June 30, 2000 compared to $209,076
for the comparable period ended June 30, 1999. We have incurred
$293,448 of selling, general and administrative expenses for the nine
months ended June 30, 2000 compared to $223,592 for the comparable
period in 1999. The decrease in expenses for the three month period is
primarily attributable to decreased working capital, while increased
expenses for the nine month period is due to there being nine months of
operations in 2000 compared to five months in 1999, the period of
inception.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended June 30, 2000, we had net cash used by
investing activities of $881 for the purchase of equipment.
We currently have no material commitments for capital expenditures.
We expect to use any proceeds received from the exercise of the Series
A and B Warrants to expand operations. However, we cannot be assured
that the warrants will be exercised or that our sales will meet our
growth expectations. Should either of these fail to occur, we may elect
to (i) reduce the planned expansion of operations or (ii) pursue other
financing alternatives such as a rights offering, warrant exercise or
borrowings. Our planned growth and profitability could be delayed or
diminished if the two options listed above are not implemented.
ADDITIONAL FINANCING
Over the next two years, our liquidity is dependent on increased
revenues from operations, additional infusions of capital and debt
financing. We believe that additional capital and debt financing in the
next three months will allow us to commence our marketing and sales
efforts and thereafter result in revenue and greater liquidity in the
long term. However, we cannot be assured that we will be able to obtain
additional equity or debt financing in the future, if at all.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
Future Operating Results - Future operating results may be impacted by
a number of factors that could cause actual results to differ
materially from those stated herein, which reflect our current
expectations. These factors include worldwide economic and political
conditions, industry specific factors, our ability to maintain access
to external financing sources and financial liquidity, and ability to
manage expense levels.
<PAGE>8
Need for Additional Capital - As of June 30, 2000, we had approximately
$2,000 of cash. We have experienced negative cash flow since inception
and we expect the negative cash flow to continue until significant
revenue is generated. Our future success is highly dependent upon our
continued access to sources of financing which we believe are necessary
for our continued marketing efforts. In the event that we are unable
to maintain access to its existing financing sources, or obtain other
sources of financing, there would be a material adverse effect on the
Company's business, financial position and results of operations.
Forward Looking Statements - This report contains certain forward-
looking statements that are based on current expectations. In light of
the important factors that can materially affect results, including
those set forth above and elsewhere in this report, the inclusion of
forward-looking information herein should not be regarded as a
representation by the Company or any other person that the objectives
or plans of the Company will be achieved. We may encounter
competitive, technological, financial and business challenges making it
more difficult than expected to continue to market our products and
services; competitive conditions within the industry may change
adversely; we may be unable to retain existing key management
personnel; our forecasts may not accurately anticipate market demand;
and there may be other material adverse changes in the Company's
operations or business. Certain important factors effect the forward
looking statements made herein and include, but are not limited to (i)
accurately forecasting capital expenditures and (ii) obtaining new
sources of external financing.
Assumptions relating to budgeting, marketing, product development and
other management decisions are subjective in many respects and thus
susceptible to interpretations and periodic revisions based on actual
experience and business developments, the impact of which may cause us
to alter its capital expenditure or other budgets, which may in turn
affect the Company's financial position and results of operations.
<PAGE>9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. not applicable.
Item 2. Changes in Securities and Use of Proceeds. not applicable.
Item 3. Defaults Upon Senior Securities. not applicable.
Item 4. Submission of Matters to a Vote of Security Holders. not
applicable.
Item 5. Other Information. not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Reports on Form 8-K. 8K-10/1/99 8Ka-11/16/99
(b) Exhibits.* Exhibit 27 - Financial Data Schedule
* A summary of any Exhibit is modified in its entirety by reference to
the actual Exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
THERMOELASTIC TECHNOLOGIES, INC
Dated: August 21, 2000
By: /s/ Kenneth B. Liebscher
------------------------
Kenneth B. Liebscher, President and Director
By: /s/ Bernie Teitelbaum
------------------------
Bernie Teitelbaum, Secretary/Treasurer and Director
