<PAGE>2
As filed with the Securities and Exchange Commission on July 27, 2000
Commission File Number 333-92463
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment 4 to
FORM SB-2
REGISTRATION STATEMENT
Under The Securities Act of 1933
ThermoElastic Technologies, Inc.
(formerly LPR Cybertek, Inc.)
Colorado Applied For
(State or other (Primary Standard Industrial (I.R.S. Employer)
jurisdictions Classification Code Number) Identification number)
of incorporation
or organization)
5466 Canvasback Road
Blaine Washington 98230
Telephone: (360) 371-5061
(Address and telephone number of registrant's principal executive
offices and principal place of business.)
Julie C. Lalande
15451 East Wyoming Drive, Unit D
Aurora, CO 80017
(Name, address and telephone number of agent for service.)
with copies to:
Jody M. Walker
Attorney At Law
7841 South Garfield Way
Littleton, Colorado 80122
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: |x|
<TABLE>
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed Amount of
class of Amount to be offering aggregate registration
securities registered price offering price fee
<S> <C> <C> <C> <C>
Common stock 800,000 $1.50 $1,200,000 $333.60
Common stock(1) 6,756,593 $1.50 $10,134,890 $2,817.50
Common stock(2) 666,400 $2.00 $1,332,800 $370.52
Common stock(3) 666,400 $3.00 $1,999,200 $555.78
---------- ---------- ---------
8,889,393 $14,666,890 $4,077.40
</TABLE>
(1)Represents common stock to be registered on behalf of selling
security holders.
(2)Represents common stock underlying the Class A Warrants.
(3)Represents common stock underlying the Class B Warrants
The registrant amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment, which specifically states
that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>3
PRELIMINARY PROSPECTUS DATED JULY 25, 2000
SUBJECT TO COMPLETION
Up to a maximum of 800,000 common shares
at $1.50 per common share
6,756,593 common shares being registered
on behalf of selling security holders
1,332,800 common shares underlying the Series A and
B Warrants being registered on behalf of
selling security holders
ThermoElastic Technologies, Inc.
We shall receive $1,044,423 of the proceeds from the sale of the
common shares after paying the selected broker dealer discounts and
commissions of $120,000 and before expenses estimated at $35,577.
The offering is on a best-efforts basis with no minimum offering amount.
We have made no escrow arrangements for any funds received.
We are registering the shares for resale and we will pay the $120,000
commission fee only if we engage a broker-dealer.
The series A warrants are exercisable at $2.00 and the series B
warrants are exercisable at $3.00.
The information in this prospectus is not complete and we may change
it. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
This is our initial public offering, and no public market currently
exists for our shares.
The offering terminates on June 30, 2001.
Consider carefully the risk factors beginning on page 6 in the
prospectus.
Neither the SEC nor state securities commission has approved these
certificates or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
<PAGE>4
<TABLE>
TABLE OF CONTENTS
<S> <C>
PROSPECTUS SUMMARY 5
RISK FACTORS 6
- Possible adverse effects due to the contemporaneous primary
offering and secondary offering by selling security holders.
- Need for additional financing
- Going-concern qualification in the report of certifying
accountant
- There is a deficit stockholders' equity
- Material operating losses in the past and anticipated in the
future
- Limited management operating experience
- Decrease in book value of any purchased common share
- No active trading market
- No experience in selling common shares
AVAILABLE INFORMATION 7
SELLING SECURITY HOLDERS 7
TERMS OF THE OFFERING 9
SOURCE AND USE OF PROCEEDS 10
DILUTION 10
OUR COMPANY 11
GLOSSARY OF TERMS 12
BUSINESS ACTIVITIES 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 18
Trends and Uncertainties
Capital and Source of Liquidity
Results of Operations
MANAGEMENT 19
Officers and Directors
Remuneration
Indemnification
CERTAIN TRANSACTIONS 24
PRINCIPAL SHAREHOLDERS 25
SHARES ELIGIBLE FOR FUTURE SALE 26
MARKET FOR REGISTRANT'S COMMON EQUITY 27
DESCRIPTION OF SECURITIES 28
LEGAL MATTERS 29
LEGAL PROCEEDINGS 29
EXPERTS 29
INTERESTS OF NAMED EXPERTS AND COUNSEL 29
ADDITIONAL INFORMATION 29
</TABLE>
<PAGE>5
PROSPECTUS SUMMARY
The following summary contains basic information about this offering.
It likely does not contain all the information that is important to
you. For a more complete understanding of this offering, we encourage
you to read this entire document and the documents we have referred you
to.
ThermoElastic
ThermoElastic will market a new moldable acrylic composite used
primarily in the dental industry and allied fields. ThermoElastic has
entered into an agreement to acquire the licensing rights to
exclusively market this acrylic product to all industries worldwide.
The Offering
<TABLE>
<S> <C>
The Offering. ThermoElastic is offering
up to 800,000 common
shares at $ 1.50 per
common share. There is
no minimum investment and
no minimum offering amount
Common shares outstanding
prior to this offering 17,338,164
Common shares to be outstanding
after offering assuming exercise of
the Series A and B Warrants 19,470,964
Percent of common shares owned by
current shareholders after maximum
offering 89.05%
Gross proceeds after maximum offering $1,200,000
Use of proceeds from sale of
common shares ThermoElastic intends to use
the funds from the sale of its
common shares primarily for
research and development,
professional and consulting
fees, marketing and testing
and working capital
Resales by Selling
Shareholders. We are registering common
shares on behalf of selling
security holders. We will not
receive any cash or other
proceeds from the selling
security holders' sale of
their common shares. We are
not selling any common shares
on behalf of selling security
holders. We have no control
or affect on these selling
security holders.
Market For the Common Stock
Prior to the date of this
prospectus, we have had no
trading market for our common
stock. We have applied for
the quotation of our common
stock on the OTC Bulletin
Board.
We cannot offer assurance that
the NASD will quote our common
stock, that an active trading
and/or a liquid market will
develop or, if developed, that
it will be maintained.
<PAGE>6
Absence of Dividends; Dividend Policy We do not currently
intend to pay regular cash
dividends on its common stock.
Our board of directors will
review this policy from time to
time in light of,
among other things, our
earnings and financial
position. We do not anticipate
paying dividends on our common
stock in the foreseeable
future.
Transfer Agent Our transfer agent is Atlas
Stock Transfer 5899 S. State
Street, Suite 24 Salt Lake
City, UT 84107
</TABLE>
----------------------------------------------------------
RISK FACTORS
----------------------------------------------------------
In analyzing this offering, you should read this entire prospectus and
carefully consider, among other things, the following risk factors:
1. There could be adverse effects due to the contemporaneous primary
offering of 800,000 common shares offering by ThermoElastic and the
secondary offering of common shares by Selling Security Holders.
ThermoElastic is not selling any common shares on behalf of selling
security holders and has no control or affect on the 1,820,564 common
shares of these selling security holders which are not part of any
lock-up agreement. Selling security holders will sell their common
stock regardless of the outcome of the primary offering by
ThermoElastic.
Due to the fact that the secondary offering will be conducted
contemporaneously with a primary offering by ThermoElastic, the market
price of ThermoElastic's common stock when trading of the common stock
begins may be less than the offering price of $1.50 per common share.
In the event the average bid price of the stock falls below $1.50 for
three consecutive days, the primary offering by ThermoElastic will be
terminated. ThermoElastic may never complete its offering of 800,000
common shares.
2. If we do not receive additional financing, we may not be able to
develop our business and you could lose your entire investment
Even if we sell all of the 800,000 common shares, we may require
additional financing for our operations and working capital. We cannot
be assured that additional funds will be available from any source. If
these funds are not available, we may not be able to develop our
business and you may lose your entire investment.
3. The report of the certifying accountant expresses a going-
concern qualification that ThermoElastic may not be able to
continue as a going-concern.
The report of the certifying accountant express a going concern.
qualification. ThermoElastic has experienced significant losses
and has negative working capital at March 31, 2000. These
conditions raise substantial doubt about our ability to continue
as a going concern.
4. We have experience material operating losses and anticipate
similar losses in the future.
Since our incorporation in 1999, our activities have been principally
devoted to positioning ourselves to achieve our business objectives.
We have had no material operating revenue to date and expect to incur
losses and administrative expenses until we begin the sales of our
products or we receive revenues from any of our proposed operations. To
date, we have an operating loss of $584,642 from inception to March 31,
2000.
5. We currently have a deficit stockholders' equity of $14,222.
You may not recover any of your investment in case of a liquidation of
ThermoElastic.
<PAGE>7
If we cannot successfully achieve material revenues from operations
and should we be forced to liquidate ThermoElastic, you would not
receive any of your investment back upon liquidation due to the
deficit stockholders' equity.
6. Our management has limited experience, may not run the company in
a profitable manner and you may lose your entire investment.
Our management has limited experience in the conduct of a public
corporation. Compared to other companies, we do not have depth of
managerial, administrative and technical personnel. See "Management".
We may not run the company in a profitable manner due to this
inexperience and you may lose your entire investment.
7. The book value of any common shares purchased in this offering will be
decreased by $1.43 or 95.33% immediately after the offering.
This decrease does not include any of the common shares to be issued
upon exercise of the series A and B warrants. If we sell only 400,000
common shares, the net tangible book value of the common shares offered
in this prospectus will decrease by $1.45 or 96.67%. ThermoElastic may
issue additional shares in private business transactions and may pursue
a public offering in the future to complete its business plan. Your
net tangible book value could further decrease as a result of the
issuances.. See "Dilution."
8. If our common stock has no active trading market, you may not be
able to sell your common shares at all.
Our common shares do not have an active trading market. We cannot assure
you that a trading market will ever develop. If no market
develops, you may not be able to sell your common shares at all.
9. We do not have any experience in selling common shares and we may
not be able to sell the offering fully or quickly.
Our officers and directors are selling the common shares in this
offering. Although we may enter into a placement agency agreement with
one or more broker/dealers for the sale of its securities, we cannot be
assured that we will be able to obtain any broker/dealer to act in such
capacity. Our lack of experience in securities sales may make it
difficult for us to sell the offering completely or quickly
-----------------------------------------
AVAILABLE INFORMATION
-----------------------------------------
ThermoElastic has filed with the Securities and Exchange Commission
a registration statement including all amendments and required
exhibits under the Act with respect to the securities offered by
ThermoElastic. This prospectus does not contain all of the information
set forth in the registration statement. Certain parts of the
registration statement are omitted pursuant to the rules and
regulations of the Commission.
For further information with respect to ThermoElastic and the
securities offered by ThermoElastic, shareholders should examine the
registration statement. Copies of such materials may be examined
without charge at, or obtained upon payment of prescribed fees from,
the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549, telephone number
1-800-SEC-0330, at the Chicago Regional Office, Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and the
New York Regional Office, 7 World Trade Center, New York, New York
10048.
ThermoElastic will voluntarily file periodic reports in the event our
obligation to file such reports is suspended under Section 15(d) of the
Exchange Act.
ThermoElastic will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of any
of the information that was incorporated by reference in the prospectus
not including exhibits to the information that is incorporated by
reference unless the exhibits are themselves specifically incorporated
by reference. Requests for copies of said documents should be
directed to Kenneth B. Liebscher at ThermoElastic.
<PAGE>8
The Commission maintains a Web site -- //www.sec.gov -- that contains
reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission.
--------------------------------------
SELLING SECURITY HOLDERS
--------------------------------------
We are not selling any common shares on behalf of selling security
holders and have no control or affect on the sale of common shares by
these selling security holders which are not part of any lock-up
agreement.
The offering by selling security holders will terminate on or before
June 30, 2001.
On behalf of the selling security holders, we are registering 6,756,593
common shares currently outstanding and 1,332,800 common shares to be
issued upon exercise of the series A and series B warrants. The
percentage owned prior to and after the offering reflects all of the
then outstanding common shares. The amount and percentage owned after
the offering assumes the sale of all of the common shares being
registered on behalf of the selling security holders and the exercise
of all series A and series B warrants.
<TABLE>
<CAPTION>
Name and Amount Total Number % Owned Number of % Owned
Being Registered Owned Prior to Shares Owned After
Currently Offering After Offering Offering
<S> <C> <C> <C> <C>
Rosemarie Berman - 1,644,457 1,653,207 9.54% 8,750 .05%
Sondra Black - 1,624,661 1,629,661 9.40% 5,000 .03%
Vista Group - 300,000 300,000 1.73% 0 0%
Joshua Kerbel - 1,666,911 1,670,411 9.63% 4,000 .02%
Twentieth Century - 400,000 400,000 2.31% 0 0%
Michael Curtis - 550,000 550,000 3.17% 0 0%
166,332 166,332(1) 24.96%(2) 0 0%
166,332 166,322(3) 24.96%(4) 0 0%
Oliver D. Yue - 136,668 136,668(1) 20.51%(2) 0 0%
- 136,668 136,668(3) 20.51%(4) 0 0%
Lonnie Bumstead - 26,000 26,000(1) 3.90%(2) 0 0%
- 26,000 26,000(3) 3.90%(4) 0 0%
Glenn May - 40,000 40,000(1) 6.00%(2) 0 0%
- 40,000 40,000(3) 6.00%(4) 0 0%
Tim Mullen - 8,000 8,000(1) 1.20%(2) 0 0%
- 8,000 8,000(3) 1.20%(4) 0 0%
John F. Ennamorato - 52,000 52,000(1) 7.80%(2) 0 0%
- 52,000 52,000(3) 7.80%(4) 0 0%
Brian Skipper - 6,000 6,000(1) .90%(2) 0 0%
- 6,000 6,000(3) .90%(4) 0 0%
Bobby Chaudhuri - 150,000 140,000(1) 21.01%(2) 0 0%
- 150,000 140,000(3) 21.01%(4) 0 0%
Dr. Joseph Butchey - 7,000 7,000(1) 1.05%(2) 0 0%
- 7,000 7,000(3) 1.05%(4) 0 0%
Keith Jebodhsingh - 14,000 14,000(1) 2.10%(2) 0 0%
- 14,000 14,000(3) 2.10%(4) 0 0%
Michael Lyons- 8,400 8,400(1) 1.26%(2) 0 0%
- 8,400 8,400(3) 1.26%(4) 0 0%
Terry MacKay - 10,000 10,000(1) 1.50%(2) 0 0%
- 10,000 10,000(3) 1.50%(4) 0 0%
Enzo Mecozzi - 10,000 10,000(1) 1.50%(2) 0 0%
- 10,000 10,000(3) 1.50%(4) 0 0%
Warren Milando - 10,000 10,000(1) 1.50%(2) 0 0%
- 10,000 10,000(3) 1.50%(4) 0 0%
The Postal
Connection, Inc.- 7,000 7,000(1) 1.05%(2) 0 0%
- 7,000 7,000(3) 1.05%(4) 0 0%
Rubin Rapuch - 5,000 5,000(1) .75%(2) 0 0%
- 5,000 5,000(3) .75%(4) 0 0%
Glen Smeltzer - 6,000 6,000(1) .90%(2) 0 0%
- 6,000 6,000(3) .90%(4) 0 0%
Walter Von Schilling &
Edith Von Schilling - 4,000 4,000(1) .60%(2) 0 0%
- 4,000 4,000(3) .60%(4) 0 0%
</TABLE>
<PAGE>9
(1)Represents common stock underlying the series A warrants
(2)Represents percentage of series A warrants owned
(3)Represents common stock underlying the series B warrants
(4)Represents percentage of series B warrants owned
We are not aware of any current or future plans, proposals,
arrangements or understandings by any selling security holders to
distribute their registered common shares of ThermoElastic to their
respective outstanding shareholders or partners.
We are not aware of any plans, arrangements or understandings by any
selling security holders to sell their registered shares of common
stock to any particular individual(s) or to use such registered shares
to satisfy contractual obligations.
We will receive no portion of the proceeds from the sale of the
common shares by the selling shareholder and will bear all of the costs
relating to the registration of this offering other than any fees and
expenses of counsel for the selling security holders. Any
commissions, discounts or other fees payable to a broker, dealer,
underwriter, agent or market maker in connection with the sale of any
of the common shares will be paid by the selling security holders.
----------------------------------------------------------
TERMS OF THE OFFERING
----------------------------------------------------------
Plan of Distribution. ThermoElastic is offering up to 800,000 common
shares purchase price of $1.50 per common share. We are offering the
common shares on a "direct participation" basis by our officers and
directors) and possibly selected broker-dealers. The officers and
directors who shall sell the offering on our behalf are Dennis Epstein,
Kenneth B. Liebscher, Fred J. Heaps, Bernard Teitelbaum and Lawrence
Pinkney. These individuals will be relying on the safe harbor in Rule
3a4-1 of the Securities Exchange Act of 1934 to sell ThermoElastic's
securities. None of these individuals are subject to a statutory
disqualification, are not associated person of a broker or dealer and
meet all of the following conditions of 3a4-1(a)(4)(ii).
- they each primarily performs, or is intended primarily to
perform at the end of the offering, substantial duties for or on
behalf of ThermoElastic otherwise than in connection with transactions
in securities; and
- they were not a broker or dealer, or an associated person of a
broker or dealer, within the preceding 12 months; and
- They have not participated in selling an offering of securities
for any issuer more than once in the last 12 months.
No sales commission will be paid for common shares sold by
ThermoElastic. Selected broker-dealers shall receive a sales
commission of up to 10% for any common shares sold by them.
ThermoElastic reserves the right to withdraw, cancel or reject an offer
in whole or in part. The common shares offered hereby will not be
sold to insiders, control persons, or affiliates of our company.
We have made no plans, proposals, arrangements or understandings with
any potential sales agent with respect to participating in the
distribution of our securities. When, in the future, assuming such
participation develops, the registration statement will be amended to
identify such persons.
The selling security holders may sell the common shares offered hereby
in one or more transactions (which may include "block" transactions in
the over-the-counter market, in negotiated transactions or in a
combination of such methods of sales, at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The
selling security holders may effect such transactions by selling the
Shares directly to purchasers, or may sell to or through agents,
dealers or underwriters designated from time to time, and such agents,
dealers or underwriters may receive compensation in the form of
discounts, concessions or commissions from the selling security holders
and/or the purchaser(s) of the common shares for whom they may act as
agent or to whom they may sell as principals, or both.
<PAGE>10
The selling security holders and any agents, dealers or underwriters
that act in connection with the sale of the common shares might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any discount or commission received by them and
any profit on the resale of the common shares might be deemed to be
underwriting discounts or commissions under the Securities Act.
ThermoElastic is not aware of any plans, arrangements or understandings
by any selling security holders to sell their registered shares of
common stock to any particular individual(s) or to use such registered
shares to satisfy contractual obligations.
ThermoElastic will receive no portion of the proceeds from the sale of
the common shares by the selling shareholder and will pay all of the
costs relating to the registration of this offering (other than any
fees and expenses of counsel for the selling security holders). Any
commissions, discounts or other fees payable to a broker, dealer,
underwriter, agent or market maker in connection with the sale of any
of the common shares will be paid by the selling security holders.
Offering Period. The offering by ThermoElastic and selling security
holders will terminate on June 30, 2001.
Determination of Offering Price. The offering price and other terms
of the total offering amount needed and the possible dilution to
existing and new shareholders.
Subscription Procedure. The full amount of each subscription will be
required to be paid with a check payable to ThermoElastic in the amount
of the subscription. Purchasers or soliciting broker/dealers should
remit payment directly to ThermoElastic before 12:00 noon, on the
following business day, together with a list showing the names and
addresses of the person subscribing for the offered common shares or
copies of subscriber's confirmations.
No Escrow Account. There is no minimum offering amount and no escrow
account. As a result, we will deposit any and all offering proceeds
directly into our operating account.
--------------------------------------------------------------
SOURCE AND USE OF PROCEEDS
--------------------------------------------------------------
Assuming successful completion of the offering, we shall receive net
proceeds of $1,044,423 after payment of commissions of $120,000 and
offering expenses of approximately $35,577. The commission amount
would only be payable if a broker-dealer is engaged. If we raise
significantly less than the maximum amount, we will be able to pay
operational expenses but will have less working capital to expand
operations. We shall utilize the net proceeds from the sale
of our common shares as described below. The proceeds are to be
utilized over a six-month period.
<TABLE>
<CAPTION>
Raised Raised
---------- ----------
<S> <C> <C>
Gross Proceeds $600,000 $1,200,000
less commissions 60,000 120,000
offering expenses 35,577 35,577
---------- ----------
Net Proceeds $504,423 $1,044,423
R & D $150,000 $300,000
Professional
(legal,accounting) 50,000 100,000
Consulting
Agreements 135,000 270,000
Marketing and
Testing 100,000 200,000
Working Capital 69,423 174,423
--------- ---------
Net Proceeds used $504,423 $1,044,423
</TABLE>
<PAGE>11
In the event that the minimal amount is not received, we will have
to scale back operations and may pursue other equity or debt
offerings, not yet determined.
Any proceeds received from the exercise of the Series A and Series B
Warrants shall be utilized for general working capital purposes.
We will not receive any cash proceeds from the sale of common shares by
the selling security holders.
------------------------------------------------------
DILUTION
------------------------------------------------------
Dilution. Common shares outstanding will be a total of 18,138,164 and
17,738,164, respectively if $1,200,000 or $600,000 is raised. This
does not include the assumption of any warrant exercise. The net
tangible book value as of March 31, 2000 is ($264,222) and the net
tangible book value per share as of March 31, 2000 is (0.02). The
following table illustrates the per share dilution as of the date of
this prospectus, which investors may experience if we reach the
various levels listed below.
<TABLE>
<CAPTION>
$1,200,000 $600,000
Raised Raised
---------- ----------
<S> <C> <C>
Offering price $1.50 $1.50
Net tangible book value per
share before offering (.02) (.02)
Increase per share
attributable to investors .06 .03
------ ------
Pro Forma net tangible
book value per common
share after offering .04 .01
----- -----
Dilution to investors 1.46 1.49
Dilution as a percent of
offering price 97% 99%
</TABLE>
Further Dilution. We may issue additional restricted common shares
pursuant to private business transactions. We do not currently have
any plans, arrangements or commitments regarding any private business
transactions. Any sales under Rule 144 after the applicable holding
period may have a depressive effect upon the market price of our common
shares and investors in this offering.
-------------------------------------------------------
OUR COMPANY
-------------------------------------------------------
L.P.R. Cybertek, Incorporated was incorporated on January 30, 1995
under the laws of the State of Colorado, to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers
and acquisitions. L.P.R. Cybertek had limited activity since inception
and had limited operations prior to the merger with ThermoElastic.
Other than issuing shares to its original shareholders, L.P.R.
Cybertek had limited operational activities. L.P.R. Cybertek was a
"shell" company whose sole purpose was to locate and consummate a
merger or acquisition with a private entity.
On July 15, 1999, LPR Cybertek entered into an Agreement and Plan of
Reorganization with ThermoElastic Technologies, Inc., a Delaware
corporation. Pursuant to the Agreement and Plan of Reorganization,
ThermoElastic Delaware was merged into LPR Cybertek. Then current
shareholders of ThermoElastic Delaware received 138,164 common shares,
666,400 Class A Warrants, 666,400 Class B Warrant and 100,000 options
to purchase common shares of LPR Cybertek at $1.00 per common share in
return for all of their common shares, warrants and options in
ThermoElastic Delaware.
<PAGE>12
Pursuant to the terms of the merger, we changed our name from LPR
Cybertek to ThermoElastic Technologies, Inc.
Additionally, on July 15, 1999, the shareholders of LPR Cybertek sold
15,766,629 common shares representing 91.67% of the outstanding common
shares to ThermoElastic Delaware designees resulting in a change in
control in LPR Cybertek.
ThermoElastic's principal offices are located at 5466 Canvasback Road,
Blaine, Washington 98230, telephone number (360) 371-5061. These
offices consist of 150 square feet on a month to month lease. The
monthly rental fee is included in management remuneration.
Employees. We do not currently have any employees. We have
engaged consultants to assist us in our operations. We have a
written agreement with Vista Developments, Ltd. To provide services
for ThermoElastic. The consulting agreement has been in place since
inception and we intend to continue the agreement until operations
increase to justify hiring full time employees for ThermoElastic.
On February 2, 1999, ThermoElastic Delaware entered into a contract
with Vista Developments Ltd., in which Vista would provide required
marketing, promotion and sales services. Brent Banfield is the
principal of Vista Developments, Ltd. The contract stipulates such
services will cost $150,000 per annum, payable $12,500 per month, plus
certain stock options and commissions above stipulated sales levels.
On February 8, 1999, ThermoElastic Delaware entered into a five-year
contract with Gritell International Limited, in which Gritell would
provide certain management, business and financial advice and
expertise. Howard E. Kerbel is the principal of Gritell. As amended
April 1, 1999, Gritell will receive $6,000 per month for its services
until further notice plus certain expenses. The original compensation
terms outlined in the contract were $13,334 per month during the first
year, $20,000 per the month during the second and third years, and
$33,334 per month during the fourth and fifth years. Gritell has
reserved the right to demand payment of any unpaid accrued balances.
On February 22, 1999, ThermoElastic Delaware entered into a five-year
contract with Trilock Financial Corporation, in which Trilock would
provide certain management, business and financial advice and
expertise. Grace Maitland-Carter is the principal of Trilock. As
amended April 1, 1999, Trilock will receive $3,000 per month plus
certain other expenses for its services until further notice. The
original compensation terms outlined in the contract were $6,666 per
month during the first year, $10,000 per month during the second and
third years, and $16,666 per month during the fourth and fifth years.
Trilock has reserved the right to demand payment of any unpaid accrued
balances.
All of the above agreements have been continued by us after the merger.
Government Regulations. At the present time, there are no pervasive
regulations of our business.
Competition. It is important to note that none of the competing
products in the marketplace today possess the thermoelastic consistency
of BITEM. All the competing products are single purpose products and
have distinctive drawbacks. Some of the existing products on the
market have functions similar to the products made with BITEM, but we
are of the opinion that there is no comparison in performance.
1. The Myoloc System: Similar to BITEM blocks, one of the BITEM
applications, are made of bent metal wires. These wires act as rigid
sublingual stabilizers, which are difficult to place into the neutral
zone under the tongue. Myolocs must be removed from the patient's
mouth to be adjusted.
2. Myoflex: A single purpose technologies utilizing the sub mandibular
undercut to retain a lower denture. Nylon inserts are incorporated
into the extended flange and make the extensions movable. This method
is complicated and technique sensitive. Impressions have to be very
precise in order to assure patient comfort. The patient cannot control
tension on the extensions, resulting in possible pain and discomfort.
<PAGE>13
3. Molloplast-B: A superior soft reline material that will form a
silicone cushion under the denture. Such relines are often difficult
to bond to acrylic and will eventually harden and can cause odor over
time.
4. Flexite M.P.: This material is a poly thermoplastic that can only
be injection molded. The metal-free denture designs are somewhat
similar to BITEM partials but flexite is not compatible with acrylic
and cannot be repaired or bonded to teeth. It is injected under heat
but once set it is not thermal adjustable. Eventually the flexite
material becomes brittle and often snaps.
5. Brux-Eze/Impak/Thermoflex: This material is used to construct
sports guards and night guards. It will soften in warm water, but the
consistency is not controllable and usually remains relatively soft.
-------------------------------------------------------
GLOSSARY OF TERMS
-------------------------------------------------------
Cold cure: a method to process plastic without boiling. Also known
as "self cure", which is the preferred term.
Incisor pad: a spacer worn between the front teeth to prevent hard
contact or grinding.
Injection molded: industrial process to form plastic objects, using
heat and pressure to fill a mold.
Inter-proximal: dental term to define the area where two teeth touch.
Liquid monomer: the liquid used to mix with the powder to create
plastic.
Lingual flange: inside vertical wall of a lower denture touched by
the tongue.
Malocclusion: a situation where upper and lower teeth do not come
together to form a proper bite.
Malpositioning: dental term describing teeth which are not properly
lined up to form a nice arch.
Mandibular prosthesis: a lower denture, fitted to the lower jaw
bone.
Neutral zone: the area between he bottom of the tongue and the floor
of the mouth.
Occlude: a verb meaning the way upper and lower teeth relate to each
other, when the mouth is closed.
Polymerisation: chemical term for processing raw acrylic or plastic.
Reline material: to refit a loose denture, a filler is used on the
inside to compensate for gums that have shrunk in size.
Retromylohyoid fossa: scientific term of submandibular undercut.
Ridge height: the amount of gum left on the jaw bone after all teeth
are extracted.
Sublingual stabilizers: horizontal support ledges attached to the
inside walls of a lower denture, just below the tongue
Submandibular undercut: a hollow area below the crest of the lower jaw
bone, in the back of the mouth, towards the throat.
Support prosthesis: any orthopedic device meant to help support parts
of the body.
Thermoelastic consistency: degree of softness of the plastic as it is
heated in warm water.
Thermal adjustable: by applying heat, a material softens and can be
molded into a different position.
<PAGE>14
Thermo-adjustable flap: only that part of the device can be adjusted
by applying heat.
Vacu-former: a machine that uses heat and a strong vacuum suction to
shape thermo-plastic sheets to a mold.
Wing: as in stabilizer "wing" referred to in definition of sublingual
stabilizers.
-------------------------------------------------
BUSINESS ACTIVITIES
-------------------------------------------------
Product Introduction
Apple Dental Ventures has developed a "new generation" acrylic. This
product is currently being used by dentists, denturists, and dental
laboratories in Ontario, Canada, where testing occurred. Currently, in
the dental field, "BITEM" is the acronym for Biocompatable Intraoral
Thermal Elastic Material and represents the trade name for this acrylic
composition.
The Technologies
The uniqueness of BITEM lies in the control of flexibility, memory and
rigidity, during and after the processing stage. Based on in-house
study, this material allows for the creation of more than 60 new
applications in the dental field. The most significant improvements are
with fit, tightness, aesthetics and comfort for removable dental appliances.
This special composition once added to a denture softens in warm water
and can be adapted to the contours of the patient's gums and/or teeth.
The acrylic material requires the temperature of the water to be only
between 120 - 155 degrees Fahrenheit or 50 - 63 degrees Celsius. This
process can be repeated as many times as necessary to ensure complete
fit and comfort. The innovation of these patented technologies lies in
the controlling mixture of the two liquid monomers: A- the softener and
B-the hardener. The relative proportions of the two monomers determine
the range of BITEM's consistencies, from the cushiony soft to the hard
acrylic base of commonplace denture material.
After polymerization BITEM remains "thermoelastic"- meaning that the
material may be heated in water to soften, in order to be adapted to
tissues and teeth as often as necessary to insure the most comfortable
fit. It is unique with its dual qualities- the rigidity is
controllable during the mixing process and remains "thermo" adjustable
everafter.
The quality of BITEM is that it is a consistently controllable thermo
elastic acrylic material that can be used to fabricate dental
appliances of varying rigidities. This appliance can be softened with
hot water or a hot air dryer and fashioned to the contour of the
patient's mouth.
The Products
Dental Applications
Due to the newly invented thermo-adjustable parts, this system can be
applied in more than a dozen ways using a diverse range of
flexibilities and rigidities in critical areas of a denture. The
advantage of using this material as a heat sensitive reliner is that it
allows denture wearers the luxury of being able to fit and refit their
own dentures when there is any discomfort just by softening the liner
in warm water.
This material is available in raw material (powder and liquid), "heat-
cure". or in "self-cure" packages. It can made available in pre-
manufactured sublingual wings containing the thermoelastic material and
can be used to stabilize existing lower dentures by installing them
under the tongue.
Dental patients will be the primary beneficiaries of BITEM due to the
increased comfort afforded by the material. The dentist will also
benefit due to the product's ease of use. Most products available in
<PAGE>15
the dental business have a single purpose or are use specific. The
dual properties of BITEM, provides the dentist with the following:
A) complete control in the mixing process - allowing an infinite
variety of rigidities
B) the ability to create many different critical parts of dental
appliances; and
C) to create a dental appliances which are thermo-adjustable for
their lifetime.
D) the following are 15 examples of the over 60 dental applications
of BITEM.
1. Post dam for upper dentures
The back part of a denture on the palate is known as the post dam and
can be easily adjusted and manipulated using hot water to ensure the
appliance's direct contact with the tissue surface.
2. Lingual flange on lower dentures
If there is little ridge height to support prosthesis, the dentist may
expand the prosthesis in the lingual space. The resultant extensions
are easily adjusted using hot water and tongue posturing giving the
denture increased stability.
3. Sublingual stabilizer wings
Engagement of undercuts in the retromylohyoid fossa to improve
retention of the mandibular prosthesis. The flanges can be displaced
after being tempered in hot water and then repositioned intraorally to
engage the undercuts.
4. Clasps on partial dentures
In order to cut down on the amount of metal use in a cast partial
denture, and to improve the aesthetics, particularly in the anterior
area of the mouth, tooth colored BITEM material can be used in order to
make the clasps for those particular areas.
5. Gasket clasps
These allow for maintenance of the remaining teeth in a partially
edentulous mouth. Processing the material into inter-proximal areas
will also allow increased retention. By tempering the denture, the
denture can be inserted and retained.
6. Stressbreaker connected to rigid attachment or implants
Instead of complex and expensive precision attachments, conventionally
used for this application, a layer of Thermoelastic material is
chemically layered into the denture right behind the attachment. This
will provide a simple, strong and relentless method of stress breaking
on abutment teeth.
7. Temporo-Mandibular Joint (TMJ) appliances
These appliances, commonly known as "splints" or oral orthopedic
appliances are used to correct malocclusion for malpositioning of the
lower jaw. Currently made with hard acrylic and metal ball clasps to
retain, can now be constructed with a thermo-adjustable flap.
8. Obturator
These appliances are made to correct parts of oral cavity, caused by
birth defects or accidents. Often they are difficult to insert;
however with the availability of producing certain parts of these
appliances with BITEM, the placement in the mouth could mean the start
of a whole new technologies.
9. Thermo relines
Relining prosthesis with a softened version of BITEM will allow the
prosthesis to sit comfortably and allow the patient to modify the
prosthesis on a daily basis. Before insertion of the prosthesis in the
morning, the prosthesis is tempered in water, the patient then seats
the prosthesis and occludes heavily. The inner surface of the
prosthesis will then mold to the tissues and create a newly adapted
surface.
10. Preformed sheets of vacuum forming
Existing technologies provides different sheets for forming trays over
dental models. With BITEM SHEETS, parts of appliances can be formed
and will be able to be used for many novel ideas.
<PAGE>16
11. Pre-made forms for temporary crowns
These crowns would be made of tooth-colored BITEM material and can be
used by dentists as temporary crowns, while the laboratory is preparing
the permanent crowns.
12. Supplemental prosthetic devices for specialized use
Sometimes it is necessary to construct a prosthetic appliance for a
specialized use. For example, denture wearing wind instrument players
need a specialized appliance to allow them to play their instrument.
By utilizing BITEM on these devices, we can accomplish a superior fit
over the conventional hard acrylic devices, providing greater comfort
and benefit to the musician. This is only a single example where BITEM
can be used in place of conventional acrylic material in specialized
conditions.
13. Orthodontic appliance
Spring retainers, one of the most frequently used Ortho appliances, can
be outfitted with BITEM incisor pads. The ability of the thermoelastic
material to replace clasps, wires and springs would make it extremely
useful.
14. Night guards/Athletic guards
These guards can be produced either with the Vacu-former (plus cold
cure thermoelastic in the case of night guards) or waxed and baked
liked the other applications.
15. Cosmetic adjustments
One example of cosmetic adjustments would be when the gum in the
anterior area has shrunk severely; the only cosmetic solution is to
fabricate a piece of rigid acrylic to fill the gap. This now can be
done using a BITEM adapted substitute resulting in more comfort for the
patient.
We are currently seeking uses for these technologies inside and outside
of the dental world. We are currently pursuing the following
opportunities:
1. Orthotics
Orthotics are shoe inserts. They are intended to adjust an abnormal or
regular gait. They help make standing, walking and running more
comfortable by altering the angle at which the foot strikes the ground.
The goal of orthotics is to improve foot function and minimize stresses
that can cause foot pain and deformity. There are two forms of
orthotics.
Rigid Orthotics: they are designed to control foot function and are
made of a stiff material such as plastic. Rigid orthotics are
fabricated from as mold of an individual's foot and normally extends
along the sole of the heel to the ball or toes of the foot. These
orthotics are designed to control motion at the sub-talar joint. Rigid
orthotics have a long life span and do not change shape. If the
patient requires a change for whatever reason, entirely new orthotics
must be fabricated and it is not uncommon for a new pair of orthotics
to cost a patient upwards of five hundred dollars ($500).
The thermoelastic qualities of BITEM allow doctors to adjust the
patients existing orthotics to match the changing needs of the patient
and to reduce the need for costly fabrication of a new pair of
orthotics.
Soft Orthotics: They are designed to absorb shock and aid in increasing
foot comfort. They are constructed of compressible material and molded
to a plaster impression of the foot. Many geriatric patients help ease
the pain associated with arthritis and diabetic foot ulcers by the use
of soft orthotics.
Incorporating BITEM into the fabrication of soft orthotics reduces the
need to replace the orthotics to accommodate changes in weight bearing
patterns that often occur as a result of foot pain. With Bitem, the
orthotics can be, placed in hot water, remolded to the desired shape
and left to cool. The orthotics can be remolded as many times as are
needed to accommodate the changes that are occurring in the patient's
feet.
2. Splints
The thermoelastic qualities of BITEM are particularly suitable for the
fabrication of low-cost splints. They are often used in the management
and prevention of soft tissue contractures, which often follow joint
<PAGE>17
immobilization, neurological insult and other joint and soft tissue
problems. The application of a low-level tissue stress for prolonged
periods of time is often the therapist's treatment of choice for such
conditions.
A contracture is a normal response to muscle spasticity or joint
immobilization that prevents the movements of the affected joint
through its range of motion. The loss of mobility in the soft tissue
is caused by a remodeling of the tissues in the joint-tendon-muscle
unit in response to joint immobilization. Eventually, the soft tissue
becomes stiff, thickened, and immobile, rendering the affective joint
useless. Management of soft tissue contracture relies on eliciting a
plastic response from the affected tissues. By eliciting a plastic
response from the soft tissue, a permanent elongating of the affected
tissue may be achieved. The plastic response can be elicited by
applying a progressive long-term, low intensity stretch to the affected
tissue. The most common way of doing this is with a dynamic splint.
Taking advantage of BITEM's thermoelastic properties, contracture
management splints can be fabricated. Splints made from BITEM can be
constantly adjusted to progressively increase the amount of tension
applied to soft tissue surrounding a joint. The adjustment process
only requires that the splint be heated in hot water, then bent to the
desired angle and left to cool before the patient puts the splint back
on the body.
3. Medical Prostheses
The fabrication of prosthetic and orthopedic devices from BITEM adds a
new dimension to the practice of prosthetics and orthotics. By taking
advantage of the thermoelastic and consistency control capabilities of
BITEM, custom-made prosthetic devices can be made, that are both
economical and versatile. Prosthetic devices can be mass-produced to
standard sizes and yet customized for each individual user by molding
the prosthetic in hot water. The material will help increase the
lifespan of products and reduce costs at the same time.
4. Braces
Prosthetics and Orthopedic braces and artificial limbs are a billion
dollar a year industry in the United States. There are approximately
2.5 million amputees in the U.S. and is estimated that this number
grows by 125,000 annually. Approximately 54% of all amputations are
below the knee, 37% are above the knee and 7% are amputations of the
arm. The demands for orthotics and prosthetics are expected to grow
over the next twenty years, according to the National Commission on
Orthotic and Prosthetic Education. There will be a 25% percent
increase in the number of people with paralysis, deformity o orthopedic
impairments in that time. Over the same period, the number of people
expected to require prosthesis will increase by 47% and the number of
people using orthopedic braces is expected t increase by 3 1 %.
The market demands for orthotics and prosthetics is projected to grow
so fast, that even with a 20% increase in the number of certified
Orthotists and Prosthetists, only 65% of the population needs will be
met. (See: issues affecting the future demand for orthotists and
prosthetists: National Commission of Orthotic and Prosthetic Education,
1996).
According to the Orthotists and Prosthetists National Office, studies
show that for every dollar spent on rehabilitation, including orthotic
and prosthetic care, more than eleven dollars is saved in long-term
health care.
5. Custom Furniture
The BITEM technologies is now being used in the architectural process
to customize a new artistically designed line of contemporary
furniture.
6. Specialized Glasses
With BITEM, the Optical industry is able to customize the nose and ear
parts of the frames of all their clients. It would also be easy for
the patients to adjust their own frames from time to time as needed.
Many other uses in the industry would become available as the product
was used, especially in the area of disabilities and malformed
structures.
<PAGE>18
7. Hearing Aids
Audiologists are always looking for new technologies and materials to
improve upon the fit and service of the hearing aids for their
patients. Each ear differs and depending upon the type of hearing aid
used would determine how the patient could utilize BITEM. We intend to
explore this area with both doctors and technicians who make the
appliances and fit them.
8. Aids to daily living
Rehabilitation centers, physical and occupational therapists work with
many people who, because of accident, injury or disease have problems
with items standard in every household. With BITEM, we are able to
design special equipment to accommodate these special needs. Most of
these designs and manufacturing will be left to the specialists in the
field by entering into licensing agreements for BITEM's use. Many
situations can be easily remedied by the use of this new material.
9. Sports Equipment
In all sports, there is a need to customize the equipment used in that
sport and to fit each participant's particular requirements. Racquet
sports, such as tennis, squash or racquetball could benefit from custom
grips or handles made from BITEM. This could also apply to ski boots,
running shoes, poles etc., all to assist or improve the efficiency and
performance for the athletes whom participate within a given sport.
10. Customized Instrumentation
Any or trade that requires or uses specialized tools could be a
candidate for this a new material. There is a large market in many
fields, where this type of customization and adjustability would be
desired.
In most areas outside of Dentistry, we intend to license the
technologies to various industries that specialize in the above area
and allow them to open up the various market places.
Currently in the dental field there are a total of ten products
offered. Dental companies such as Ash Temple, Central Dental, and
Unident are merchandising these products to the dental professions. As
the demand grows, new uses will be found for the thermoelastic
properties of BITEM.
To date, we have pursued the following uses
- relining of dentures
- clasping in partial dentures for esthetics
- temporomandibular joint appliances
- repairs of both full and partial appliances
- flanges for lower dentures in the undercut areas
We do not intend to pursue additional uses in the near future. We
have made limited sales to date, through Ash Temple, Central Dental,
Zahn Dental(Canada) and Dentist. We will be selling packaged kits
which include raw products with instructions of how to mix the
products. We will obtain our raw materials from Esschein, Inc. of
Linwood, Pennsylvania. We will be distributing the products world-
wide through Zahn Dental Company, Inc.
PATENTS AND LICENSING RIGHTS
BITEM is protected by US Patent #5,431,563, Canadian Patent #2,111,789
and European Patent #0605912. The United States Divisional Patent for
the BITEM technologies, allowed since February 1996 has been issued.
This second patent covers a thermoelastic composite material formed
using the BITEM technologies and expands the use of the product into
all possible fields.
Licensing Agreement with Apple Dental Ventures.
ThermoElastic has entered into an exclusive agreement with Apple Dental
Ventures to acquire the rights and related privileges to manufacture,
market, distribute and sell by retail, wholesale or any other method,
the "BITEM" products. These products are protected by U.S., Canadian
and European patents, and all divisional patents for non-dental
applications, along with improvements, variations and changes to these
<PAGE>19
patents for the entire world for a term which is the longer of 25 years
or the life of the patents or any extension or amendments of the
patents.
For granting this exclusive license, the licensor will receive,
the following:
(a) A royalty calculated as follows:
(i) 5% of the first $25,000,000 in gross annual income, and
(ii) 3.5% of the next $25,000,000 in gross annual income, and
(iii) 2.5% of gross annual income exceeding $50,000,000.
(b) A consulting agreement for a 3-year term, a maximum of
Canadian $60,000 (US $40,469 as of July 15, 1999) per year for
further research and development of new products, marketing and
training. This agreement shall be renewable on mutual consent for
two successive periods of two years.
(c) The right to purchase 100,000 common shares, par value of
$.0001 per share, at $.20 per share, or $20,000. This right had
been exercised as of the date of these financial statements.
(d) A two-year option to purchase 100,000 common shares at $1.00
per share.
The license agreement has been capitalized at a cost of $250,000.
Payments for the license agreement are $50,000 at the time of
initial funding, $20,000 in common stock, three payments of
$35,000 every 2 months, and $75,000 at the end of one year. At
July 15, 1999, $110,000 remained in product rights payable.
MARKETING
The goal of ThermoElastic is to market products throughout specified
geographical locations in the dental field. Licensing agreements will
be entered into with qualified companies and individuals to fulfill the
dynamic potential of this material and to expand its use into other
diverse areas and products.
----------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
----------------------------------------------------------------
As shown in the accompanying financial statements, the Company incurred
net losses of $584,642 since inception. The Company's current losses
exceed its current liabilities by $301,745, and the Company is experiencing
liquidity problems. These factors create substantial doubt about the
Company's ability to continue as a going concern. The Company intends to
generate cash flows from operations and from proceeds on the exercise of
warrants. The financial statements do not include any adjustments that
might be necessary if ThermoElastic is unable to continue as a going
concern.
ThermoElastic incurred operating expenses of $217,800 for the six
months ended March 31, 2000. Operating expenses include consulting
fees of $135,564 and professional fees of $25,089. These expenses
increased by $199,847 from the year ended September 30, 1999 due to
expansion of operations during the period ended March 31, 2000
Trends and Uncertainties. Demand for ThermoElastic's services will be
dependent on, among other things, general economic conditions which are
cyclical in nature. Inasmuch as a major portion of ThermoElastic's
activities is the sales and marketing of dental application products,
ThermoElastic's business operations may be adversely affected by
ThermoElastic's competitors and prolonged recessionary periods.
Capital and Source of Liquidity. For the six months ended March 31,
2000, ThermoElastic did not pursue any investing activities.
For the six months ended March 31, 1999, ThermoElastic had an increase
in deposits of $5,000 resulting in net cash used for investing
activities of $5,000.
For the six months ended March 31, 2000, ThermoElastic pursued no
financing activities.
<PAGE>20
For the six months ended March 31, 1999, ThermoElastic received
$201,815 from the sale of common stock resulting in net cash provided
by financing activities of $201,815.
ThermoElastic currently has no material commitments for capital
expenditures. For the period from inception (January 21, 1999) to
September 30, 1999, ThermoElastic Delaware (prior to the merger)
purchased product rights for $230,000, issued common shares valued at
$20,000. For that same period,
ThermoElastic Delaware purchased equipment for $3,445. As a result,
ThermoElastic Delaware had net cash used in investing activities of
$233,445 for the period from inception to September 30, 1999.
For the period from inception to September 30, 1999, ThermoElastic
Delaware received $700,915 from the issuance of common stock in an
offering pursuant to Rule 504 and advanced $149,836 to LPR Cybertek
evidenced by a promissory note. As a result, ThermoElastic Delaware
had net cash provided by financing activities of $551,079 for the
period from inception to September 30, 1999. We expect that the net
proceeds from our recent offering and the cash flow from future
operations, if any, will be sufficient to allow us to meet the
expected growth in demand for our products and services. Additionally,
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
- reduce the planned expansion of operations or
- 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.
Over the next two years, our liquidity is dependent on increased
revenues from operations, additional infusions of capital and debt
financing. We believes that additional capital and debt financing in
the next six months will allow us to commence its 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.
Plan of Operation. ThermoElastic, over the next twelve months
intends to market and distribute dental applications world wide
through Zahn Dental Company, Inc. and to utilize the World Wide Web in
the information dissemination and marketing of its products.
ThermoElastic shall conduct of product research and development as
funds allow. Management possesses the experience to expand marketing
and distribution of its products. No significant equipment purchases
are planned over the next twelve months.
ThermoElastic shall seek to maintain low operating expenses while
commencing operations and increasing operating revenues. We are
focusing on maintaining a low cost administrative approach.
However, increased marketing expenses will probably occur in future
periods as we attempt to further increase our marketing and sales
efforts.
Recent Accounting Pronouncements - During 1998, the FASB issued
statement of Financial Accounting Standards No. 131 (SFAS No. 131),
"Disclosure About Segments of an Enterprise and Related Information"
which changes the way public companies report information about
segments. SFAS No. 131 establishes standards for the way public
companies report information about operating segments in annual
financial statements and requires reporting of selected information
about operating segments in interim financial statements issued to the
public. We do not have any disclosure requirements under this standard.
Concentration of Credit Risk - ThermoElastic's financial instruments
that are exposed to concentrations of credit risk consist of cash,
which includes checking accounts placed with federally insured
financial institutions. Such accounts may at times exceed federally
insured limits. We have not experienced any losses on such accounts.
<PAGE>21
---------------------------------------------------------
MANAGEMENT
---------------------------------------------------------
Officers and Directors. Pursuant to our articles of incorporation,
each director shall serve until the annual meeting of the
stockholders, or until his successor is elected and qualified.
ThermoElastic's basic philosophy requires the inclusion of directors
who will be representative of management, employees and the minority
shareholders of ThermoElastic. Directors may only be removed for
"cause". The term of office of each officer of ThermoElastic is at
the pleasure of ThermoElastic's board.
The principal executive officers and directors of ThermoElastic are as
follows:
<TABLE>
<CAPTION>
Name Position
<S> <C>
Dennis Epstein, age 64 Chairman of the Board
Kenneth B. Liebscher, age 56 President,Director
Fred J. Heaps, age 60 Chief Executive Officer, Director
Bernard Teitelbaum, age 49 Vice President of Sales and
Marketing, Secretary
Daniel Wiseman, age 32 Chief Financial Officers and Treasurer
Dr. Lorne Berman, age 37 Director
Dr. Stephen Rivers, age 50 Director
Dr. Ila Berman, age 38 Director
Dr. Gregory K. Slater, age 42 Director
Dr. Izchak Barzilay, age 39 Director
Bonnie D. Walton, age 45 Director
</TABLE>
All of the above officers and directors, except for Daniel Wiseman
began their terms on July 30, 1999 subsequent to the merger with
ThermoElastic Technologies, Inc., a Delaware corporation.
Resumes:
Dennis Epstein CA, CMC, CBV, Chairman of the Board. Mr. Epstein is a
co-founder of ThermoElastic Delaware and has been a partner with
Horwath Orenstein from 1966 to the present. Mr. Epstein was the
managing partner of Horwath Orenstein from 1983 to 1992. Horwath
Orenstein is a Toronto based Chartered Accounting firm and member of
Horwath International.
He is a member of the Institute of Chartered Accountants of Ontario,
Canadian Association of Management Consultants of Ontario, and the
Canadian Institute of Chartered Business Valuators. He has
successfully completed the Canadian Security Course, is a member of
such associations as the Canadian Franchise Association, the
Canadian Venture Capital Association. His practice includes public
financing of early stage technology opportunities, debt equity
financing proposals, acquisitions and mergers, real estate
syndications, transportation technologies, franchising and assisting
entrepreneurs to manage growth for profit. Mr. Epstein has written a
book, "Growth Hormones in the Technology Sector."
Daniel Wiseman, Chief Financial Officer and Treasurer. From 1993 to
1995, Mr. Wiseman worked as a staff accountant at Arthur Andersen & Co
LLP, Where he specialized in family wealth and tax planning. From 1996
to June 1997 he was appointed as Chief Financial Officer for Le Print
Express International Inc. In mid 1997, Mr. Wiseman founded and is
currently President & CEO of Harvard Investment Group Ltd. Is
registered as a Limited Market Dealer with the Ontario Securities
Commission. In March 1998, Mr. Wiseman was a Founder and Director of
Harvard Capital Corp (ASE, HOO), an Alberta Junior Capital Pool
Company. He is currently the Vice President of Corporate Development
of Network Corp. (CDNX, NWK), formerly Harvard Capital Corp. Mr.
Wiseman received his B.Sc. Degree in 1989 (in Psychology) from York
University, his Hon. B. Comm. Degree in 1991 (in Finance and
Marketing) from University of Windsor Ontario, and his Chartered
Accountancy designation in 1995.
Dr. Lorne Berman, Director. Mr. Berman has been in private practice
as an optometrist in Toronto from 1985 until the present. From 1998
to 1999, he was a lecturer for the Canadian College of naturopathic
Medicine. From 1986 to 1987, Dr. Berman was a Clinical Supervisor,
University of Waterloo, School of Optometry. Dr. Berman is a member of
<PAGE>22
the Canadian Association of Optometrists, the Ontario Association of
Optometrists, Glaucoma Research Society and an Affiliate Doctor with
TLC, the Laser Center. Dr. Berman graduated from the University of
Waterloo School of Optometry in 1985.
Dr. Stephen Rivers, Director. Dr. Rivers received his Honors BA in
Psychology at Carleton University in 1971. He graduated from McMaster
University with an MA in Psychology in 1973. Dr. Rivers obtained his
Ph.D. in Psychology from Carleton University in 1979. He was under
contract with the Canadian Federal Government in 1979. From 1995 to
present, Dr. Rivers has been a Coordinator in the Adolescents Substance
Abuse Program at the Hospital for Sick Children in Toronto. Dr.
Rivers is employed as a staff psychologist. He also carries on a
part-time private practice in a medical clinic as a psychologist
treating both adults and children. His expertise falls into the areas
of parenting and child management, marital relationships, relationship
issues, drug/alcohol abuses, work dissatisfaction, depression and
stress management. From 1992 to 1995, Dr. Rivers worked at the
Thistletown Regional Center for Children and Adolescents as a staff
psychologist for the Peel Children's Center in Mississauga, Ontario.
From 1988 until 1989, he did his externship in family therapy at
Thistletown/Peel Children's Center.
From 1981 to 1987, Dr. Rivers was employed by the Ottawa Board of
Education as a staff psychologist on a full-time basis. From 1980 to
1981, Dr. Rivers was under contract with the Children's Aid Society of
the County of Lamark, working with adolescents and counseling adults,
performing psychometric and emotional assessments of infants and young
children. Dr. Rivers is registered with The College of Psychologist
of Ontario. He is affiliated with the following organizations;
Canadian Psychology Association, American Psychology Association and
The Ontario Psychological Association. Dr. Rivers has published
extensively and has many conference presentations to his credit.
Dr. Ila Berman, Director. Dr. Berman graduated from the School of
Architecture, Carleton University in Ottawa, Canada with a Bachelor of
Architectural Degree with High Distinction in 1983. She studied
abroad at the Techinion Institute of Technology, Haifa, Israel for one
semester from 1983 to 1984. Dr. Berman worked as an architect in Tel
Aviv, Israel in 1984. She returned to Toronto and worked for Norr
Partnership Limited, Architects and Engineers, in the position of
Project Design Architect. Dr. Berman was responsible for the
principal research program and development of design pertaining to Norr
Care, a division of Norr, established to respond to social needs, by
providing architectural alternatives to traditional institutions
related to the community, social services, housing and health care.
From 1986-1989 she designed Covenant House, Street Youth Hostel Crisis
Care Center in Toronto. From 1986-1989 Dr. Berman designed Woodroffe
Center in Ottawa, the Cape Breton Regional Hospital in Cape Breton,
Nova Scotia, the St. Thomas-Elgin Rehabilitation Unit in St. Thomas and
the Freeport Hospital Chronic Care Facility in Kitchener, Ontario. In
1991, Dr. Berman graduated with a masters of Design Studies in
Architecture from Harvard University Graduate School of Design. In
1993, Dr. Berman received her Doctorate in Design in Architecture from
Harvard University Graduate School of Design. From 1994-1997,Dr.
Berman was an assistant professor of Architecture at Lulane University,
New Orleans, Louisiana. From 1997 to 1999, Dr. Berman held the
position of Assistant Professor to the Illinois Institute of Technology
College of Architecture.
During the time at Harvard University, Dr. Berman has received numerous
awards, fellowships and scholarships. When Dr. Berman graduated from
Carleton University in 1983, she received the lieutenant Governor of
Ontario's Metal for Design and Architecture. Dr. Berman is not only a
scholar and a teacher, but she is also a recognized artists and has had
a number of one artist shows and group exhibitions.
Dr. Gregory K. Slater, Director. Dr. Slater received his Doctor of
Dental Surgery Degree from the University of Toronto in 1982, and is
licensed by the Royal College of Dental Surgeons. Dr. Slater is a
member of the Toronto Academy of Cosmetic Dentistry, the Ontario Dental
Association, the Toronto Dental Seminars and the American Academy of
Cosmetic Dentistry. Recently, Dr. Slater successfully completed the
State University of New York at Buffalo's Postgraduate Program in
Esthetic Dentistry. Although Dr. Slater is proficient in all areas of
dental treatment his special interest in cosmetic dentistry to enhance
<PAGE>23
smiles and esthetic dentistry to restore teeth back their natural
function and beauty. Since 1986, Dr. Slater has carried on a private
practice in downtown Toronto.
Bonnie D. Walton, Director. Ms. Walton, 45, is presently the Managing
Director of Walton Interiors, specializing in commercial and
residential interiors and construction. She has completed her studies
at Sheridan College in Ontario and at Christies Education in London,
England. In the past Bonnie has been extensively involved in the
management, sale, developing and redeveloping of commercial real
estate. Bonnie has also had extensive business management experience
having provided management services on a contract basis to the legal
profession. Over the past five years, Ms. Walton has worked as an
independant consultant in interior design.
Fred J. Heaps, Chief Executive Officer. From 1991 to 1998, Mr. Heaps,
60, was Managing Director and Partner of ITIS, Inc., an information and
database provider to the North American Travel industry, located in
Concord, Ontario. In 1990 Mr. Heaps was President and CEO of Armada
Equipment Co. From 1964 to 1989 he was with DENTSPLY INTERNATIONAL
INC., where his positions included Sales Representative, Division
Manager for North East United States and Canada, Vice President and CEO
of DENTSPLY CANADA LTD., President of Amalgamated Dental Company,
President of Ash USA, President of Medical and Industrial Equipment,
President of National Refining Co. and President of Canadian Dental
Supply Company.
Mr. Heaps has 30 years of multinational corporate management experience
in North America and Europe at all levels of product development,
financing and marketing, with recent in depth involvement in Canadian
information services and database environments, procedures and
development processes. Mr. Heaps graduated from the University of
British Columbia with a business major. He attended York University
and added business and financial postgraduate courses. He also
attended University of Chicago taking additional marketing courses.
Kenneth B. Liebscher, President, Director. Mr. Liebscher, 56, is an
international businessman with 28 years of executive management
experience. He was 22 years with the world's largest dental products
manufacturer, DENTSPLY INTERNATIONAL INC. He held several positions
culminating as the Manager of their West Coast division, headquartered
in San Francisco, CA. Mr. Liebscher was recruited by a major European
based competitor, IVOCLAR LIECHTENSTEIN, to lead their entry into the
North American market and within two years became Executive Vice
President of Sales and Marketing and helped expand this company 's
sales to 300 million dollars U.S. before retiring.
Since 1992, Mr. Liebscher has been a director of E.T.C., a publicly
traded company and became President of it's wholly owned subsidiary,
The Electric Car Company. In 1994 he led a team that developed the Ml-
6 prototype electric car from the ground up. Mr. Liebscher serves on
the board of directors of several public companies listed on the
Vancouver and U.S. Stock Exchanges. Mr. Liebscher is graduate of St.
George's School, Vancouver B.C. and also attended the University of
British Columbia.
Bernard Teitelbaum, Vice President Sales and Marketing. For the last
five years, Mr. Teitelbaum has been an independent sales and marketing
consultant in the dental industry as well as Executive Director of the
Dental Industry Association of Canada for the past two years. From
1990 until 1994, Mr. Teitelbaum, 49, was with DENTSPLY CANADA LTD. as
Director of Sales and Marketing. He was fully responsible for sales
and marketing for both business units i.e. the dental laboratory and
dental equipment divisions. He launched the Trublend SLM, the largest
single tooth company, launched in the Corporation's history with 100%
dealer network penetration.
From 1986 until 1992, Mr. Teitelbaum continued with Dentsply as Sales
Manager of the Laboratory Products Business Unit. He successfully
launched, in the European market, a tooth line called Biodent into a 50
% dealer distribution network and also captured 33 % of the market
share in Europe with pre-mixed opaquing porcelain called Biopaque.
From 1981 until 1986, he was Treasurer and Controller of DENTSPLY
CANADA LTD. and was an Officer and Director of DENTSPLY CANADA LTD.
Operating Divisions. He was directly responsible for the full
<PAGE>24
financial reporting, planning, data processing and asset management for
all Canadian businesses of DENTSPLY INTERNATIONAL INC. From 1977 until
1981, Mr. Teitelbaum was with DENCO, A DIVISION OF MCGAW SUPPLY LTD. as
Assistant Controller.
Mr. Teitelbaum graduated from University of Toronto in 1971 with a
Bachelor of Commerce degree. He took additional courses at Osgoode
Hall Law school in the L.L.B. program, Sir Wilfred Laurier University
in export management, University of Toronto in strategic planning,
intermediate accounting & auditing. He also took courses at Xerox
York, Pennsylvania in professional selling skills and has attended many
one and two day special interest courses in sales and marketing
management.
Dr. Izchak Barzilay, Director. Dr. Barzilay, 42, graduated from the
University of Toronto with a Bachelor of Science Degree in 1979. He
obtained s DDS from the Faculty of Dentistry, University of Toronto in
1983. He then put in a one-year Faculty Internship Program with the
Department of Oral Medicine and Pathology at the University of Toronto,
Faculty of Dentistry. Dr. Barzilay, at the Eastman Dental Center,
University of Rochester, obtained his Specialty Certificate in
Prosthodontics in 1986. He continued on in the Department of Dental
Research, University of Rochester and obtained his Masters Degree in
1991.
Dr. Barzilay has been in private practice in Toronto as a
Prosthodontist since 1987. He is an Associate in Dentistry, Department
of Prosthodontics, Faculty of Dentistry, University of Toronto. Dr.
Barzilay is on staff at the Toronto Hospital and is Head of the
Division of Prosthodontics, Mount Sinai Hospital. He is also on the
Editorial Board of Dental Implant Perspectives. Dr. Barzilay's
professional experience, includes the following: Faculty Internship at
the University of Toronto, Clinical Instructor in Oral Diagnosis and
Emergency Departments, Resident Dentist, University of Toronto Mobile
Dental Clinic for the Disabled Resident and Department of Dentistry,
Moose Factory General Hospital. Izchak was in private practice in
General Dentistry in 1984. Between 1985 and 1986 he attended at the
Genesee Hospital, Prosthodontics. Between 1986 and 1987 he was at
Strong Memorial Hospital in Prosthodontics, attending. He was
Assistant Professor, Department of Prosthodontics, Eastman Dental
Center, Rochester, NY, and a Member - Executive of the Ontario Study
Club for Osseointegration between the years of 1991 and 1993.
In 1991, he was President of the Ontario study Club for
Osseointegration. Research activities are many and varied in the area
of Cured, Composite Resins, Titanium Implants, Light-cured Composite
Resins, Bonding Composite Resins, Evaluation of Porcelain Repair
Materials and from 1996, Clinical Evaluation of BITEM, our Intraoral
Thermo Elastic Material. Dr. Barzilay is a member of Alpha Omega
Dental Fraternity, The Canadian Dental Association, the American
College of Prosthodontist, American Association for Dental Research,
Ontario Study Club for Osseointegration, American Association of Dental
Research Implantology Group, Canadian Academy of Restorative Dentistry
& Prosthodontics, the Academy of Prosthodontics -Fellow, Academy of
Dentistry International Fellow and in many more.
Dr. Barzilay has received many honors and awards, and has lectured and
published extensively. Dr. Barzilay has done our main clinical study
of the BITEM product and he has become our Foremost Authority in this
particular Product.
Remuneration: To date, none of the officers have received any
compensation due to the our financial condition. In the future, we
will compensate the officers with common shares in lieu of cash
payment. The amount of common shares has yet to be determined.
Board of Directors Compensation. Members of the board of directors
will receive a yet to be determined per meeting if these directors are
not separately compensated by ThermoElastic and will be required to
attend a minimum of four meetings per fiscal year. All expenses for
meeting attendance or out of pocket expenses connected directly with
their board representation will be reimbursed by ThermoElastic.
Director liability insurance may be provided to all members of the
board of directors. ThermoElastic has not yet obtained such insurance
and does not have any specifics for available cost and coverage.
ThermoElastic does not have a specific time frame to obtain the
insurance. No differentiation is made in the compensation of "outside
directors" and those officers of ThermoElastic serving in that capacity.
<PAGE>25
Conflicts of Interest Policy. ThermoElastic has adopted a policy that
any transactions with directors, officers or entities of which they are
also officers or directors or in which they have a financial interest,
will only be on terms consistent with industry standards and approved
by a majority of the disinterested directors of ThermoElastic's board
of directors.
The bylaws of ThermoElastic provide that no such transactions by
ThermoElastic shall be either void or voidable solely because of such
relationship or interest of directors or officers or solely because
such directors are present at the meeting of the board of directors of
ThermoElastic or a committee thereof which approves such transactions,
or solely because their votes are counted for such purpose if:
- the fact of such common directorship or financial
interest is disclosed or known by the board of directors
or committee and noted in the minutes, and the board or
committee authorizes, approves or ratifies the contract
or transaction in good faith by a vote for that purpose
without counting the vote or votes of these interested
directors; or
- the fact of the common directorship or financial interest
is disclosed to or known by the shareholders entitled to
vote and they approve or ratify the contract or
transaction in good faith by a majority vote or written
consent of shareholders holding a majority of the common
shares entitled to vote (the votes of the common or
interested directors or officers shall be counted in any
such vote of shareholders), or
- the contract or transaction is fair and reasonable to
ThermoElastic at the time it is authorized or approved.
In addition, interested directors may be counted in
determining the presence of a quorum at a meeting of the
board of directors of ThermoElastic or a committee
thereof which approves such transactions.
------------------------------------------------------
CERTAIN TRANSACTIONS
------------------------------------------------------
Due to Related Parties. ThermoElastic Delaware has entered into
management consulting fee contracts with a PEL Moulds, Inc. Vista
Developments, Ltd. is a shareholder in the company. Lawrence Pinkney
is the principal of PEL Moulds, Inc. Pursuant to the contract, we
owed $1,000 at September 30, 1999. Management fees and other
expenses paid or accrued to PEL Moulds, Inc. was $32,464 at September
30, 1999.
----------------------------------------------------------------
PRINCIPAL SHAREHOLDERS
----------------------------------------------------------------
There are currently 17,338,164 common shares outstanding. The following
tabulates holdings of shares of ThermoElastic by each person who,
at the date of this prospectus, holds of record or is known by
management to own beneficially more than 5.0% of the common shares and,
in addition, by all directors and officers of ThermoElastic
individually and as a group.
<PAGE>26
Shareholdings at Date of
This Prospectus
<TABLE>
<CAPTION>
Percentage of
Outstanding
Shares as
Adjusted
to Reflect
Percentage Shares Conclusion
Number Prior to Owned After of the
Name and Address of Shares(1) Offering Offering(2) Offering
<S> <C> <C> <C> <C>
Dennis Epstein 29,000 .17% 29,000 .16%
14 Chicora Avenue
Toronto, Ontario M5R 1T6
Kenneth B. Liebscher 0 0% 0 0%
1180 - 666 Burrard Street
Vancouver, B.C. V6C 2X8
Fred J. Heaps 0 0% 0 0%
390 Edgeley Boulevard, Unit 18
Concord, Ontario L4K 3Z6
Bernard Teitelbaum 0 0% 0 0%
390 Edgeley Bouleard, Unit 19
Concord, Ontario L4K 3Z6
Lawrence Pinkney 1,000 01% 0 0%
1695 Lincolshire Blvd
Mississauga, Ontario L5E 2T2
Dr. Lorne Berman 3,222,533 18.59% 2,722,533 15.01%
Ste. 4
2267 Islington Avenue
Toronto, Ontario M9W 1R4
Dr. Stephen Rivers 500 .003% 500 .003%
1 Corwin Cres.
Toronto, Ontario M3H 129
Dr. Ila Berman 500 0% 500 .003%
1106 Felicity St.
New Orleans, LA 70130
<PAGE>26
Dr. Gregory K. Slater 500 0% 0 0%
2 Bloor St. W.
Cumberland Terrace
Toronto, Ontario M4W 3E2
Dr. Izchak Barzilay 500 0% 0 0%
18 Green Acres Road
Thornhill, Ontario L4J 4S1
Bonnie D. Walton 0 0% 0 0%
Suite 906
94 Cumberland Street
Toronto, Ontario M5R 1A3
Rosemarie Berman 1,653,207 9.54% 8,750 .05%
PH 105
1131 Steeles Avenue West
Toronto, Ontario
Sondra Black 1,629,661 9.40% 5,000 .03%
21 Roxborough Lane
Thornhill, Ontario Canada L4J 4T1
Grace Maitland Carter 3,197,534 18.44% 3,197,534 18.44%
14 Chicora Avenue
Toronto, Ontario Canada
Howard Kerbel 3,223,033 18.59% 3,223,033 18.59%
120 Wembley Road
Toronto, Ontario Canada M6C 2G6
<PAGE>27
Dr. Joshua Kerbel 1,670,411 9.63% 4,000 .02%
525 Chaplin Crescent, Apt. 815
Toronto, Ontario Canada
Officers and Directors
As a Group (11 persons) 3,254,533 18.77% 2,752,533 15.18%
</TABLE>
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
beneficial ownership of a security consists of sole or
shared voting power, including the power to vote or direct the voting,
and/or sole or shared investment power, including the power to dispose
or direct the disposition, with respect to a security whether through a
contract, arrangement, understanding, relationship or otherwise.
Unless otherwise indicated, each person indicated above has sole power
to vote, or dispose or direct the disposition of all shares
beneficially owned except if applicable community property laws apply.
(2)Assumes sale of all common shares being registered on behalf of
selling security holders.
None of the officers, directors, principal shareholders or holders of
more than 5% of ThermoElastic common stock own any of the series A or
series B warrants.
----------------------------------------------------------
SHARES ELIGIBLE FOR FUTURE SALE
----------------------------------------------------------
ThermoElastic currently has 17,338,164 shares of common stock
outstanding. Of these, 9,148,238 common shares will be "restricted
securities" after the offering and may be sold in compliance with Rule
144 adopted under the Securities Act of 1933. Other
securities may be issued, in the future, in private transactions
pursuant to an exemption from the Securities Act. Rule 144 provides,
in essence, that a person who has held restricted securities for a
period of one year may sell every three months in a brokerage
transaction or with a market maker an amount equal to the greater of 1%
of ThermoElastic's outstanding shares or the average weekly trading
volume, if any, of the shares during the four calendar weeks preceding
the sale.
The amount of "restricted securities" which a person who is
not an affiliate of ThermoElastic may sell is not so limited.
Non-affiliates may each sell without limitation shares held for two
years. ThermoElastic will make application for the listing of our
shares in the over-the-counter market. Sales under Rule 144 may, in
the future, depress the price of ThermoElastic's shares in the over-
the-counter market, should a market develop. Prior to this offering
we have not had a market for our common shares. The effect, if any, of
a public trading market or the availability of shares for sale at
prevailing market prices cannot be predicted. Nevertheless, sales of
substantial amounts of shares in the public market could adversely
effect prevailing market prices.
----------------------------------------------------------
MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
----------------------------------------------------------
Prior to this offering, we have had no market for our common stock and
warrants. We have applied to have our common stock quoted on the OTC
Bulletin Board. If ThermoElastic is not accepted on the OTC Bulletin
Board, ThermoElastic will apply to have our common shares traded on the
pink sheets.
Dividends. Holders of ThermoElastic's common stock are entitled to
receive such dividends as may be declared by our board of directors.
Broker-Dealer Sales of ThermoElastic Securities. ThermoElastic's
securities may be covered by Rule 15g-2 under the Securities Exchange
Act of 1934 that imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than
established customers and accredited investors. Accredited investors
are generally:
<PAGE>28
- institutions with assets in excess of $5,000,000 or
- individuals:
- with net worth in excess of $1,000,000 or
- annual income exceeding $200,000 or $300,000
- jointly with their spouse
For transactions covered by the rule, the broker-dealer must make a
special suitability determination of the purchaser and have received
the purchaser's written agreement to the transaction prior to the sale.
In order to approve a person's account for transactions in designated
securities, the broker or dealer must
- obtain information concerning the person's financial
situation, investment experience and investment objectives;
- reasonably determine, based on the information required
by the first paragraph that transactions in designated
securities are suitable for the person and that the
person has sufficient knowledge and experience in
financial matters that the person reasonably may be
expected to be capable of evaluating the rights of
transactions in designated securities; and
- deliver to the person a written statement setting forth
the basis on which the broker or dealer made the
determination required by the second paragraph in this
section, stating in a highlighted format that it is
unlawful for the broker or dealer to effect a
transaction in a designated security the provisions of
the second paragraph of this section unless the broker
or dealer has received, prior to the transaction, a
written agreement to the transaction from the person;
and stating in a highlighted format immediately
preceding the customer signature line that the broker
or dealer is required to provide the person with the
written statement and the person should not sign and
return the written statement to the broker or dealer
if it does not accurately reflect the person's
financial situation, investment experience and
investment objectives and obtain from the person a
manually signed and dated copy of the written
statement.
A designated security means any equity security other than a security
- registered, or approved for registration upon notice
of issuance on a national securities exchange that
makes transaction reports available pursuant to 17 CFR
11Aa3-1
- authorized or approved for authorization upon notice of
issuance, for quotation in the NASDAQ system;
- that has a price of five dollars or more or . . .
- whose issuer has net tangible assets in excess of
$2,000,000 demonstrated by financial statements dated
less than fifteen months previously that the broker or
dealer has reviewed and has a reasonable basis to
believe are true and complete in relation to the date
of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell
ThermoElastic's securities and also may affect the ability of
purchasers in this offering to sell their shares in the secondary
market.
ThermoElastic's securities will likely trade below $5.00 and the penny
stock rules discussed above will apply.
As of the date of the prospectus, there are 66 shareholders
--------------------------------------------------------------
DESCRIPTION OF SECURITIES
---------------------------------------------------------------
Our articles of incorporation authorize the issuance of up to
100,000,000 common shares. Common shares purchased in this offering
will be fully paid and non-assessable.
<PAGE>29
Common Stock. Each record holder of common stock is entitled to one
vote for each share held on all matters properly submitted to the
stockholders for their vote. Cumulative voting for the election of
directors is not permitted by the articles of incorporation. The
holders of outstanding shares of common stock are entitled to such
dividends as may be declared from time to time by the board of
directors out of legally available funds; and, in the event of
liquidation, dissolution or winding up of the affairs of ThermoElastic,
holders are entitled to receive, ratably, the net assets of
ThermoElastic available to stockholders after distribution is made to
the preferred stockholders, if any, who are given preferred rights upon
liquidation.
Holders of outstanding common shares are, and all unissued shares when
offered and sold will be, duly authorized, validly issued, fully paid,
and nonassessable. To the extent that additional common shares are
issued, the relative interest of then existing stockholders may be
diluted.
Preferred Stock. ThermoElastic's articles of incorporation authorize
the issuance of 20,000,000 shares of $.0001 par value preferred stock.
The board of directors of ThermoElastic is authorized to issue the
preferred stock from time to time in series and is further authorized
to establish such series, to fix and determine the variations in the
relative rights and preferences as between series, to fix voting
rights, if any, for each series, and to allow for the conversion of
preferred stock into common stock.
No preferred stock is currently issued.
Series A Warrants. There are current 666,400 series A warrants issued
and outstanding. The series A warrants are each exercisable for one
common share of ThermoElastic at an exercise price of $2.00. The
series A warrants are exercisable at any time after April 30, 2000,
unless certain conditions apply, and expire December 31, 2001.
ThermoElastic may redeem the series A warrants upon written notice of
thirty (30) days, at $.01 per series A warrants.
The series A warrants exercise price and number and kind of common
stock or other securities and properties to be obtained upon exercise
of the series A warrants will be effected by adjustments in the event of
stock dividends on, or a subdivision (stock split) of or consolidation
(reverse stock split) of the common stock, or the issuance of certain
rights or warrants to all holders of its common stock to purchase
common stock at less than market price or upon other distributions
(other than cash dividends) to all holders of common stock.
Series B Warrants. There are current 666,400 series B warrants issued
and outstanding. The series B Warrants are each exercisable for one
common share of ThermoElastic at an exercise price of $3.00. The
series B warrants are exercisable at any time after April 30, 2000,
unless certain conditions exist, and expire December 31, 2001.
ThermoElastic may redeem the series B warrants upon written notice of
thirty (30) days, at $.01 per series B warrants.
The series B warrants' exercise price and number and kind of common
stock or other securities and properties to be obtained upon exercise
of the series B warrants will be adjusted in the event of
stock dividends on, or a subdivision like a stock split of or
consolidation like a reverse stock split of the common stock, or the
issuance of certain rights or warrants to all holders of its common
stock to purchase common stock at less than market price or upon other
distributions other than cash dividends to all holders of common stock.
Transfer Agent. Atlas Stock Transfer acts as transfer agent for
ThermoElastic.
-----------------------------------------------------------
LEGAL MATTERS
-----------------------------------------------------------
Certain legal matters with respect to the issuance of the securities
offered in this prospectus will be passed upon by J. M. Walker,
Attorney-At-Law.
<PAGE>30
--------------------------------------------------------
LEGAL PROCEEDINGS
--------------------------------------------------------
We are not involved in any legal proceedings as of the date of this
prospectus.
--------------------------------------------------------
EXPERTS
--------------------------------------------------------
The financial statements as of September 30, 1999 and for the period
ended from inception (January 21, 1999) through September 30, 1999
included in this prospectus, have been audited by Meeks, Dorman &
Company, P.A. independent auditors, as stated in their report appearing
herein (which report expresses an unqualified opinion), and have been
so included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
--------------------------------------------------------
INTERESTS OF NAMED
EXPERTS AND COUNSEL
--------------------------------------------------------
None of the experts or counsel named in the prospectus are affiliated
with ThermoElastic.
--------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------
Until , 2000 (90 days after the date of the prospectus), all
persons making transactions in the registered securities, whether or
not participating in the offering, may be required to deliver a
prospectus. This is in addition to the obligation of these persons to
deliver a prospectus when acting as underwriters and when utilizing
their unsold allotments or subscriptions.
No dealer, salesman, agent or any other person has been authorized to
give any information or to make any representation other than those
contained in this prospectus. If given or made, this information or
representation must not be relied upon as having been authorized by
ThermoElastic, or the underwriter, if an underwriter assists in the
sale of the securities.
This prospectus is not an offer or a solicitation by anyone to any
person in any state, territory or possession of the United States in
which an offer or solicitation is not authorized by the laws of a
state, territory or possession of the United States, or to any person
to whom it is unlawful to make an offer or solicitation.
Neither the delivery of this prospectus or any sale made hereunder
shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this prospectus or in the
affairs of ThermoElastic since the date of this prospectus.
--------------------------------------------------------
FINANCIAL STATEMENTS
--------------------------------------------------------
Index to Financial Statements
Independent Auditor's Report dated August 26, 1999 F-2
Balance Sheet as of September 30, 1999 F-3
Statement of Operations for the period from
inception (January 21, 1999) to September 30, 1999 F-4
Statements of Cash Flows For the Period From
Inception (January 21, 1999) to September 30, 1999 F-5
Statement of Changes in stockholders' Equity For
The Period From Inception (January 21, 1999)
to September 30, 1999 F-6
Notes to Financial Statements F-7
<PAGE>31
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
ThermoElastic Technologies, Inc.
We have audited the accompanying balance sheet of ThermoElastic
Technologies, Inc., a development stage entity, as of September
30, 1999 and the related statements of operations, stockholder's
equity and cash flows for the period from inception (January 21,
1999) to September 30, 1999. 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 referred to above
present fairly, in all material respects, the financial position
of ThermoElastic Technologies, Inc. as of September 30, 1999 and
the results of its operations and its cash flows for the period
from inception (January 21, 1999) to September 30, 1999, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 9 to the financial statements, the Company has
experienced significant losses and has negative working capital
at September 30, 1999. These conditions raise substantial doubt
about its ability to continue as a going concern. Management's
plans regarding those matters are also described in Note 9. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Meeks, Dorman & Company, P.A.
Longwood, Florida
December 23, 1999
F-2
<PAGE>32
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Balance Sheets
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
(Unaudited)
------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash $1,628 $26,926
Accounts receivable 722 663
Inventory 9,645 11,000
Travel advances 3,000 3,000
------------------------------------------------------------------------------------
Total current assets 14,995 41,589
----------------------------------------------------------------------------------
Fixed assets, net of accumulated depreciation 3,680 3,680
------------------------------------------------------------------------------------
Other assets:
Product rights (Note 3) 250,000 250,000
------------------------------------------------------------------------------------
Total other assets 250,000 250,000
------------------------------------------------------------------------------------
Total Assets $268,675 $295,269
====================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 40,539 $ 9,025
Due to related parties (Note 4) 167,358 15,460
Product rights payable (Note 3) 75,000 75,000
------------------------------------------------------------------------------------
Total current liabilities 282,897 99,485
------------------------------------------------------------------------------------
Commitments and contingencies (Notes 7 & 8)
Stockholders' equity (Note 6)
Preferred stock, par value $.0001,
20,000,000 shares authorized, no shares issued - -
Common stock, par value $.0001, 100,000,000
shares authorized, 17,338,164 and 17,200,000
shares issued and outstanding 1,734 1,720
Additional paid-in capital 569,459 569,473
Deficit accumulated during the development stage (584,642) (370,288)
Accumulated other comprehensive income:
Foreign currency translation adjustments (773) (5,121)
------------------------------------------------------------------------------------
Total stockholders' equity $(14,222) $195,784
------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $268,675 $295,269
====================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>33
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Statements of Operations
<TABLE>
<CAPTION>
January 21,
Six Months Six Months 1999(Date of
Ended Ended Year Ended Inception)
March 31, March 31, September 30, To March 31,
2000 1999 1999 2000
(Unaudited) (Unaudited) (Unaudited)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $ 3,498 $ 9 $ 3,437 $ 6,935
Cost of sales 1,335 - 1,817 3,172
-----------------------------------------------------------------------------------------------------------------
Gross profit 2,163 9 1,620 3,763
-----------------------------------------------------------------------------------------------------------------
Operating expenses 216,497 14,516 371,908 588,405
-----------------------------------------------------------------------------------------------------------------
Net loss (214,354) (14,507) (370,288) (584,642)
-----------------------------------------------------------------------------------------------------------------
Other comprehensive income:
Foreign currency translation adjustment 4,348 - (5,121) (773)
-----------------------------------------------------------------------------------------------------------------
Total comprehensive loss $ (210,006) $ (14,507) $ (375,409) $ (585,415)
-----------------------------------------------------------------------------------------------------------------
Net loss per share $ (.01) $ (.00) $ (.03)
-----------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding 17,246,035 13,150,000 12,219,763
=================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE>34
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Statements of Cash Flows
<TABLE>
<CAPTION>
January 21,
Six Months Six Months 1999(Date of
Ended Ended Year Ended Inception)
March 31, March 31, September 30, To March 31,
2000 1999 1999 2000
(Unaudited) (Unaudited) (Unaudited)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (210,006) $ (14,507) $ (375,409) $ (585,415)
Adjustments to reconcile net loss to
net cash used for operating activities:
Depreciation and amortization - - 344 344
Changes in assets and liabilities:
Accounts receivable (59) - (663) (772)
Inventory 1,335 - (11,000) (9,645)
Travel advances - - (3,000) (3,000)
Accounts payable 31,514 - 8,479 39,993
Due to related parties 151,898 - 15,460 167,358
Product rights payable - - 75,000 75,000
-----------------------------------------------------------------------------------------------------------------
Net cash used for operating activities: (25,298) (14,507) (290,789) (316,087)
-----------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Cash acquired in reverse acquisition - - 81 81
Purchase of product rights - - (230,000) (230,000)
Purchase of equipment - - (3,445) (3,445)
Increase in deposits - (5,000) - -
------------------------------------------------------------------------------------------------------------------
-
Net cash used for investing activities: - (5,000) (233,364) (233,364)
------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of common stock - 201,815 700,915 700,915
Cost of acquiring LPR Cybertek - - (149,836)
(149,836)
------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities: - 201,815 551,079 551,079
------------------------------------------------------------------------------------------------------------------
Net increase in cash (25,298) 182,308 29,926 1,628
Cash, beginning of period 26,926 - - -
------------------------------------------------------------------------------------------------------------------
Cash, end of period $ 1,628 $ 182,308 $ 26,926 $ 1,628
==================================================================================================================
Supplemental disclosures of
cash flow information:
------------------------------------------------------------------------------------------------------------------
Cash paid for interest $ - $ - $ - $ -
Cash paid for income taxes $ - $ - $ - $ -
Purchase of product rights through issuance of stock $ - $ - $ 20,000 $ 20,000
Liabilities not assumed in reverse acquisition $ - $ - $ 2,235 $ 2,235
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>35
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Statement of Stockholders' Equity
<TABLE>
<CAPTION>
Common Shares Deficit
------------------------------ Accumulated Accumulated
Number Additional Other During the Total
Of Paid in Comprehensive Development Stockholders'
Shares Amount Capital Income Stage Equity
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 21, 1999 - $ - $ - $ - $ - $ -
Shares issued to TTI
shareholders in reverse
acquisition 17,200,000 1,720 (1,720) - - -
Issuance of common stock
To founders for cash 13,050,000 1,305 - - - 1,305
Issuance of common stock
to founders for product
rights 100,000 10 20,000 - - 20,010
Issuance of common stock
in connection with
private offering for cash 666,400 67 699,533 - - 699,600
Cost of acquiring LPR
Cybertek - - (149,722) - - (149,722)
Conversion of TTI shares to
LPR shares (13,816,400) (1,382) 1,382 - - -
Net loss - - - - (370,288) (370,288)
Foreign currency translation
Adjustments - - - (5,121) - (5,121)
-------------------------------------------------------------------------------------------------------------------------
BALANCE, September 30, 1999 17,200,000 1,720 569,473 (5,121) (370,288) 195,784
Shares issued in merger 138,164 14 (14) -
Net loss - - - - (214,354) (214,354)
Foreign currency translation
Adjustments - - - 4,348 - 4,348
-------------------------------------------------------------------------------------------------------------------------
BALANCE, March 31, 2000
(Unaudited) 17,338,164 $ 1,734 $ 569,459 $ (773) $ (584,642) $ (14,222)
=========================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-6
<PAGE>36
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations - 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. On July 15, 1999, the Company entered into a reverse
acquisition agreement with LPR Cybertek ("LPR") to become a
publicly traded Company incorporated under the laws of the State
of Colorado (See Note 2). All significant intercompany accounts
and transactions have been eliminated upon consolidation.
Basis of Presentation - The balance sheet as of March 31, 2000
and the statements of operations for the three and six month
periods ended March 31, 2000 and 1999, and the statements of
cash flows for the six month periods ended March 31, 2000 and
1999, have been prepared by the Company, without audit. In the
opinion of management, all adjustments, (which include only
normal recurring adjustments), necessary to present fairly the
financial position, results of operations and changes in cash at
March 31, 2000, and for all periods presented have been made.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principals have been condensed or omitted.
It is suggested that these financial statements be read in
conjunction with the Company's audited financial statements for
the year ended September 30, 1999. The results of operations for
the period ended March 31, 2000, are not necessarily indicative
of the operating results for the full year.
Dependence on Future Financing - The Company is newly organized,
and has sustained losses since its inception. The Company's
ability to meet its obligations in the ordinary course of
business is dependent on its ability to raise additional
financing through public or private equity financings, or secure
other sources of financing.
The Company has minimal revenues from operations and is subject
to the risks, expenses, and uncertainties frequently encountered
by companies in the development stage. In the event the
Company does not successfully implement its business plan,
certain assets may not be recoverable.
Wholly-Owned Subsidiary - On June 14, 1999, the Company filed
articles of incorporation for a wholly-owned subsidiary,
ThermoElastic Technologies (Canada), Inc., a Canadian corporation.
As of September 30, 1999, no activity had taken place in the
subsidiary.
Cash Equivalents - The Company considers all highly liquid
investments with an original maturity of three months or less as
cash equivalents.
<PAGE>37
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Inventory - Inventory is stated at the lower of cost or market on
a first-in, first-out ("FIFO") basis.
Fixed Assets - Fixed assets are stated at cost. Depreciation is
provided for fixed assets over the estimated useful life of the
asset using a straight-line method.
Other Assets - Other assets include product rights. The product
rights will be amortized on a straight-line basis over their
estimated useful life once the Company commences operations.
Amortization for the period ended September 30, 1999 was $601.
The Company purchased a website for $9,021 which was recorded as
an operating expense.
Income Taxes - The Company follows the provisions of Statement of
Financial Accounting Standard No. 109, "Accounting for Income
Taxes," which requires the recognition of deferred tax assets and
liabilities for expected future tax consequences of events that
have been included in the Company's financial statements or tax
returns. Under this method, deferred tax assets and liabilities
are determined based on the difference between financial statement
and tax basis of assets and liabilities using enacted tax rates in
effect when these differences are expected to reverse. Valuation
allowances are established, when appropriate, to reduce deferred
tax assets to the amount expected to be realized.
Use of Estimates - The preparation of 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 disclosures of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
Long-Lived Assets - In March 1995, Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
("SFAS No. 121") was issued. SFAS No. 121 requires that long-
lived assets and certain identifiable intangibles to be held and
used or disposed of by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company
has adopted this statement and determined that no impairment loss
need be recognized for applicable assets.
<PAGE>38
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Earnings Per Share - The Company has adopted Statement of
Financial Accounting Standards No. 128, "Earnings Per Share,"
which requires presentation of basic earnings per share ("Basic
EPS") and diluted earnings per share ("Diluted EPS"). The
computation of Basic EPS is computed by dividing income available
to common stockholders by the weighted average number of
outstanding common shares during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during
the period. The computation of Diluted EPS does not assume
conversion, exercise or contingent exercise of securities that
would have an anti-dilutive effect on earnings.
The shares used in the computation as of September 30, 1999 were
as follows:
-----------------------------------------
Basic EPS 12,219,763
=======================================
Diluted EPS 12,219,763
=========================================
Comprehensive Income - The Company has adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"). SFAS No. 130 establishes standards for
the reporting and display of comprehensive income and its
components in the financial statements. This schedule has been
included in the statement of operations and statement of
stockholders' equity.
Fair Value Of Financial Instruments - The carrying value of cash
and cash equivalents, accounts receivable, accounts payable, due
to related parties, and product rights payable, approximates fair
value due to the relatively short maturity of these instruments.
Impact of Year 2000 Issue - During the period ended September 30,
1999, the Company conducted an assessment of issues related to the
Year 2000 and determined that there were no modifications needed
in order to ensure that its computer systems will properly utilize
dates beyond December 31, 1999. At this time, the Company cannot
determine the impact the Year 2000 will have on its key suppliers.
If the Company's suppliers do not convert their systems to become
Year 2000 compliant, the Company may be adversely impacted. The
Company is addressing these risks in order to reduce the impact on
the Company.
<PAGE>39
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Disclosures About Segments of An Enterprise and Related
Information - The Company has adopted Statement of Financial
Accounting Standards No. 131 ("SFAS No. 131"), "Disclosure About
Segments of an Enterprise and Related Information" which changes
the way public companies report information about segments. SFAS
No. 131 establishes standards for the way public companies
report information about operating segments in annual financial
statements and requires reporting of selected information about
operating segments in interim financial statements issued to the
public. The Company does not have any disclosure requirements
under this standard.
Recent Accounting Pronouncements - In June 1998, the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," ("SFAS No. 133"). This
statement establishes accounting and reporting guidelines for
derivatives and requires an establishment to record all
derivatives as assets or liabilities on the balance sheet at fair
value. Additionally, this statement establishes accounting
treatment for four types of hedges: hedges of changes in the fair
value of assets or liabilities, firm commitments, forecasted
transactions and hedges of foreign currency exposures of net
investments in foreign operations. Any derivative that qualifies
as a hedge, depending upon the nature of that hedge, will either
be offset against the change in fair value of the hedged assets,
liabilities or firm commitments through earnings or recognized in
other comprehensive income until the hedged item is recognized in
earnings. SFAS No. 133 is effective for years beginning after
June 15, 2000. The Company does not currently participate in
these types of financing activities and does not anticipate that
the adoption of this statement will have a material impact on its
consolidated balance sheets, statements of operations, or cash
flows.
NOTE 2 - ACQUISITION
On July 15, 1999, the Company entered into a reverse acquisition
agreement with LPR Cybertek, to become a publicly traded
company. In the transaction, LPR acquired all the outstanding
common stock of TTI. LPR was incorporated on January 30, 1995
under the laws of the State of Colorado. LPR had been in the
development stage since inception, and had been unsuccessful in
developing and managing computer websites. LPR had been
substantially inactive since 1997. Upon completion of the
acquisition, LPR Cyberteck was renamed TheromoElastic
Technologies, Inc. For accounting purposes, the acquisition has
been treated as a recapitalization of TTI, with TTI as the
acquirer. The Colorado corporation is the surviving legal
entity, and the stock of TTI has been retroactively adjusted for
a common stock split reflecting the legal entity's stock balance
as of September 30, 1999. Losses from operations for LPR are
included in the statement of operations for the period from July
15, 1999 through September 30, 1999.
<PAGE>40
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 2 - ACQUISITION (CONTINUED)
The transaction called for the issuance of 1 share of LPR stock
for each 100 shares of TTI stock outstanding. This will result
in 138,164 shares of common stock being issued at a par value of
$.0001, or $14. This stock had not been issued as of the date
of these financial statements. The Company also paid $149,836
to the holders of LPR Cybertek common stock in order to complete
the acquisition. This amount has been charged to additional
paid-in capital.
NOTE 3 - PRODUCT RIGHTS
The Company has entered into an exclusive agreement to acquire the
rights and related privileges to manufacture, market, distribute
and sell by retail, wholesale or any other method, the "BITEM"
products. These products are protected by U.S., Canadian and
European patents, and all divisional patents for non-dental
applications, along with improvements, variations and changes to
these patents for the entire world for a term which is the longer
of 25 years or the life of the patents or any extension or
amendments of the patents.
For granting this exclusive license, the licensor will receive,
the following:
a. A royalty calculated as follows:
(i) 5% of the first $25,000,000 in gross annual income, and
(ii) 3.5% of the next $25,000,000 in gross annual income,
and
(iii) 2.5% of gross annual income exceeding $50,000,000.
b A consulting agreement for a 3-year term, a maximum of Canadian
$60,000 (US $40,830 as of September 30, 1999) per year for
further research and development of new products, marketing
and training. This agreement shall be renewable on mutual
consent for two successive periods of two years.
c. The right to purchase 100,000 common shares, par value of
$.0001 per
share, at $.20 per share, or $20,000. This right has been
exercised
as of the date of these financial statements.
d. A two-year option to purchase 100,000 common shares at $1.00
per share.
<PAGE>41
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 3 - PRODUCT RIGHTS (CONTINUED)
The license agreement has been capitalized at a cost of $250,000.
Payments for the license agreement are $50,000 at the time of
initial funding, $20,000 in common stock, three payments of
$35,000 every 2 months, and $75,000 at the end of one year. At
September 30, 1999, $75,000 remained in product rights payable.
Product rights will begin being amortized once business
activities commence.
NOTE 4 - DUE TO RELATED PARTIES
The Company has entered into management consulting fee contracts
with Vista Developments, Ltd., Gritell International Limited,
Trilock Financial Corporation and PEL Moulds, Inc. as described
further in Note 8 - Commitments. Vista Developments, Ltd. is a
shareholder in the Company. Gritell International Limited,
Trilock Financial Corporation and PEL Moulds, Inc. are owned by
shareholders of the Company.
Due to related parties consisted of the following at September
30, 1999:
===========================================
Gritell International $ 14,460
PEL Moulds, Inc. 1,000
-------------------------------------------
Total $ 15,460
==============================================
Management fees and other expenses paid or accrued to related
parties consisted of the following at September 30, 1999:
==============================================
Gritell International $ 76,017
Vista Developments, Ltd. 93,750
Trilock Financial Corporation 26,750
PEL Moulds, Inc. 32,464
-------------------------------------------
Total $ 228,981
================================================
<PAGE>42
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 5 - INCOME TAXES
The components of the net deferred tax assets consist of the
following at September 30, 1999:
===============================================================
Deferred tax assets:
Net operating loss carryforwards $ 142,700
--------------------------------------------------------------
Gross deferred income tax assets 142,700
Valuation allowance (142,700)
--------------------------------------------------------------
Total deferred income tax assets -
Total deferred income tax liabilities -
--------------------------------------------------------------
Net deferred income tax assets -
================================================================
The following summary reconciles differences from taxes at the
federal statutory rate with the effective rate:
================================================================
Federal income taxes at statutory rates 34.0%
State taxes, net of federal benefit 5.5%
----------------------------------------------------------------
Net deferred income tax assets 39.5%
================================================================
Unused net operating losses for income tax purposes, expiring in
various amounts through 2014, of $361,267 are available at
September 30, 1999 for carryforward against future years'
taxable income. The tax benefit of these losses of
approximately $142,700 has been offset by a valuation allowance
due to it being more likely than not that the deferred tax
assets be realized.
NOTE 6 - STOCKHOLDERS' EQUITY
The Company issued a total of 13,150,000 common shares to its
founders for $1,305 in cash and $20,010 of product rights. In
addition, the Company issued 666,400 common shares for $999,600 in
a private placement. The Company paid $300,000 in fees due under
an investor relations consulting agreement.
In the Company's private offering, each share of common stock
issued includes one Series A warrant, exercisable for one share of
common stock at a price of $2.00, and one Series B warrant,
exercisable for one share of common stock at a price of $3.00.
The warrants are exercisable at any time after April 30, 2000.
Both Series A and Series B warrants expire December 31, 2001. The
Company may redeem its warrants with 30 days written notice at a
price of $0.01 per warrant. See Note 10 regarding the reduction
in the exercise price of the warrants subsequent to year-end.
<PAGE>43
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)
The Company also has 100,000 options outstanding to purchase
common shares at $1.00 per share.
In connection with the Company's reverse acquisition (see Note 2),
the Company's stock has been adjusted for a forward split from
13,816,400 shares outstanding to 17,200,000 shares outstanding, to
equal the LPR stock outstanding. Warrants outstanding from the
Company's private offering were also adjusted on a 1 for 100 share
basis in the reverse acquisition, resulting in 6,664 Series A and
B warrants outstanding at September 30, 1999.
NOTE 7 - COMMITMENTS
On February 2, 1999, the Company entered into a contract with
Vista Developments Ltd., in which Vista would provide required
marketing, promotion and sales services. Vista Developments,
Ltd. is a shareholder of the Company. The contract stipulates
such services will cost $150,000 per year, payable $12,500 per
month, plus certain stock options and commissions above
stipulated sales levels.
On February 8, 1999, the Company entered into a five-year
contract with Gritell International Limited, in which Gritell
would provide certain management, business and financial advice
and expertise. Gritell International Limited is owned by a
stockholder of the Company. As amended April 1, 1999, Gritell
will receive $6,000 per month for its services until further
notice plus certain expenses. The original compensation terms
outlined in the contract were $13,334 per month during the first
year, $20,000 per the month during the second and third years, and
$33,334 per month during the fourth and fifth years. Gritell has
reserved the right to demand payment of any unpaid accrued
balances. Gritell International Limited is owned by a stockholder
of the Company.
On February 22, 1999, the Company entered into a five-year
contract with Trilock Financial Corporation, in which Trilock
would provide certain management, business and financial advice
and expertise. As amended April 1, 1999, Trilock will receive
$3,000 per month plus certain other expenses for its services
until further notice. The original compensation terms outlined in
the contract were $6,666 per month during the first year, $10,000
per month during the second and third years, and $16,666 per month
during the fourth and fifth years. Trilock has reserved the right
to demand payment of any unpaid accrued balances.
<PAGE>44
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
Notes to Financial Statements
NOTE 8 - OPERATING LEASE COMMITMENTS
The Company leases two vehicles under operating leases with four-
year terms. Rent expense for the period ended September 30, 1999
was $12,220. The Company leases two offices under operating
leases with terms of one year or less. Rent expense for the
period ended September 30, 1999 was $7,880. Future minimum lease
payments under the vehicle leases, are as follows:
=====================
2000 $ 13,712
2001 13,712
2002 13,712
2003 7,392
--------------------
Total $ 48,528
=====================
NOTE 9 - GOING CONCERN
The accompanying 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 suffered losses from operations and has
had negative cash flows from operating activities during the six
months ended March 31, 2000 and cumulative from inception
through September 30, 1999, which conditions raise substantial
doubt about the Company's ability to continue as a going
concern. The Company's continued existence is dependent upon
its ability to obtain additional financing.
NOTE 10 - SUBSEQUENT EVENT
On November 22, 1999, the Company reduced the exercise price of
its Series A and Series B warrants from $3.00 and $4.00 per
warrant to $2.00 and $3.00 per warrant, respectively.
<PAGE>45
PART II
INFORMATION NOT REQUIRED BY PROSPECTUS
Item 24. Indemnification of Officers and Directors.
The bylaws of ThermoElastic provides that a director of the registrant
shall have no personal liability to the Registrant or its stockholders
for monetary damages for breach of a fiduciary duty as a director,
except for liability (a) for any breach of the director's duty of
loyalty to the Registrant or its stockholders, (b) for acts and
omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, and (c) pursuant to Colorado law for any
transaction from which the director derived an improper personal
benefit. Registrant's bylaws exculpates and indemnifies the
directors, officers, employees, and agents of the registrant from and
against certain liabilities. Further the bylaws also provides that
the Registrant shall indemnify to the full extent permitted under
Colorado law any director, officer employee or agent of Registrant who
has served as a director, officer, employee or agent or the Registrant
or, at the Registrant's request, has served as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THERMOELASTIC FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
Item 25. Other Expenses of Issuance and Distribution.
Other expenses in connection with this offering which will be paid
by ThermoElastic are estimated to be substantially as
follows:
<TABLE>
Amount
Payable
Item By ThermoElastic
<S> <C>
S.E.C. Registration Fees $4,077.40
Printing and Engraving Fees $2,500.00
Legal Fees $15,000.00
Accounting Fees and Expenses $10,000.00
Transfer Agent's Fees $1,500.00
Miscellaneous $2,500.00
Total $35,577.40
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
Since ThermoElastic's inception through the date of this registration
statement, ThermoElastic has sold its Common Stock to five (5) persons
listed in the table below in transactions summarized as follows:
Aggregate Purchase
Date of Purchase Price
Name Sale Shares Price per Share
---- ---- ---- ------ -----
Patrick R. Lalande(1) 01-30-95 4,000,000 $100 -
Chuck L. Burton(1)(2) 01-30-95 4,000,000 $100 -
William Waters 08-01-95 1,000,000 $10,000 .01
12-15-95 500,000 $5,000 .01
Keith Martz(3) 02-10-96 250,000 $2,500 .01
Steve Banks(3) 02-10-96 250,000 $2,500 .01
___________________
(1) Consideration consisted of services rendered to ThermoElastic
related to investigating and developing ThermoElastic's proposed
business plan, capital structure and completing the organization of
ThermoElastic totaling $200. Officers and Directors met on several
occasions to discuss and formulate the corporate structure and plan.
(2) On March 1, 1995, Mr. Burton gifted and transferred 3,800,000
shares to his wife, Joyce Burton and 200,000 shares to William Waters,
both currently Officers and Directors. Mr. Burton is no longer a
shareholder but may be deemed to be the beneficial owner of all of his
wife's 3,800,000 shares.
(3) Total aggregate consideration consisted of services valued by
ThermoElastic's board of directors at $5,000.00. Each of the sales
listed above was made for services. All of the listed sales were made
<PAGE>46
in reliance upon the exemption from registration offered by Section
4(2) of the Securities Act of 1933 and applicable state
private offering exemptions.
Based upon Subscription Agreements completed by each of the
shareholders and the pre-existing relationship between the shareholders
and ThermoElastic, ThermoElastic believes it had reasonable grounds to
believe immediately prior to making an offer to the private investors,
and did in fact believe, when such subscriptions were accepted, that
such purchasers (1) were purchasing for investment and not with a view
to distribution, and (2) had such knowledge and experience in financial
and business matters that they were capable of evaluating the merits
and risks of their investment and were able to bear those risks. The
purchasers had access to pertinent information enabling them to ask
informed questions. The shares were issued without the benefit of
registration. An appropriate restrictive legend is imprinted upon each
of the certificates representing such shares, and stop-transfer
instructions have been entered in ThermoElastic's transfer records. All
such sales were effected without the aid of underwriters, and no sales
commissions were paid.
On July 15, 1999, LPR Cybertek entered into an Agreement and Plan of
Reorganization with ThermoElastic Technologies, Inc., a Delaware
corporation. Pursuant to the Agreement and Plan of
Reorganization, ThermoElastic Delaware was merged into the LPR
Cybertek.
In January 1999, ThermoElastic Delaware issued a total of 13,150,000
common shares for cash consideration of $1,315.
<TABLE>
NAME TOTAL # TOTAL AMOUNT DATE
OF SHARES PAID
<S> <C> <C> <C>
Black, Sondra 500,000 $ 50.00 01/22/99
Berman, Rosemarie 875,000 87.50 01/22/99
Cumming, Anna 300,000 30.00 01/22/99
Curtis, Michael 550,000 55.00 01/22/99
Gray, Ron 100,000 10.00 02/24/99
Hybechts, Robert 100,000 10.00 01/22/99
Kerbel, Dr. Joshua 350,000 350.00 01/22/99
Kerbel, Zachary 100,000 10.00 01/22/99
Martino, Chris 50,000 5.00 01/23/99
Mittelman, George 100,000 10.00 01/22/99
Maitland-Carter Jedha400,000 40.00 01/22/99
Melnyk, Gerhard 100,000 10.00 02/24/99
Perlman, Morton 25,000 2.50 01/22/99
Slater, Laurie 50,000 5.00 01/22/99
Vista Development ltd300,000 30.00 01/22/99
Wall, Jack 50,000 5.00 01/22/99
Zaman, Claudia 50,000 5.00 01/22/99
Kerbel, Howard 2,950,000 295.00 01/22/99
Epstein, Dennnis 2,900,000 290.00 01/22/99
Berman, Lonnie 2,900,000 290.00 01/22/99
Pickney, Lawrence 100,000 10.00 01/22/99
Rivers, Dr. Stephan 50,000 5.00 01/22/99
Slater, Dr. Gregory 50,000 5.00 01/22/99
Berman, Dr. Ila 50,000 5.00 01/22/99
Barzilay Dr. Izchak 50,000 5.00 01/22/99
Curtis, Dr. Denise 25,000 2.50 01/22/99
Curtis, Dr. Denise 25,000 2.50 01/22/99
Churchill, Don 25,000 2.50 01/22/99
Tamblyn, Irene 25,000 2.50 01/22/99
</TABLE>
In the second quarter of 1999, ThermoElastic Delaware issued 666,400
units to the following individuals and entities.
<TABLE>
NAME UNITS $U.S. AMOUNT DATE
<S> <C> <C> <C>
Yue, Oliver D 10,000 $30,000.00 02/26/99
Bumstead, Lonnie 13,000 39,000.00 02/25/99
May, Glenn 10,000 30,000.00 02/25/99
Mullen, Tim 4,000 12,000.00 02/25/99
<PAGE>47
Ennamorato, John F. 3,500 10,500.00 02/25/99
Skipper, Brian 3,000 9,000.00 02/23/99
Chaudhuri, Bobby 40,000 120,000.00 02/25/99
Butchey, Dr. Joseph 3,500 10,500.00 02/30/99
Chaudhuri, Bobby 35,000 105,000.00 03/31/99
Ennamorato, John F. 22,500 67,500.00 03/30/99
Jebodhsingh, Keith 7,000 21,000.00 03/31/99
Lyons, Michael 4,200 12,600.00 03/27/99
May, Glenn 10,000 30,000.00 03/29/99
MacKay, Terry 5,000 15,000.00 03/26/99
Mecozzi, Enzo 5,000 15,000.00 03/26/99
Milando, Warren 5,000 15,000.00 03/29/99
The Postal Connection 3,500 10,500.00 03/31/99
Rapuch, Rubin 2,500 7,500.00 03/31/99
Smeltzer, Glen 3,000 9,000.00 03/30/99
Von Schilling, Walter
Von Schilling, Edith 2,000 6,000.00 03/30/99
Yue, Oliver 58,334 175,002.00 03/31/99
Curtis, Michael 83,166 249,498.00 No date
Carl Flood Limited 7,000 21,000.00 04/27/99
Skipper, Brian 3,000 9,000.00 04/27/99
Milando, Loarren 1,000 3,000.00 04/29/99
Hesketh, Gary 7,500 22,500.00 05/19/99
Allinson, Michael 7,000 21,000.00 03/05/99
Bumstead, Lonnie 5,000 15,000.00 05/11/99
Scheleese, Sabine 5,000 15,000.00 05/10/99
May, Glen 4,000 12,000.00 05/10/99
Smith, Dennis 1,500 4,500.00 05/12/99
MacMillan, Brook 4,000 12,000.00 05/12/99
Smeltzer, Glen 3,000 9,000.00 05/12/99
Watts, Phillip 3,000 9,000.00 05/5/99
Brand, Marlon 1,966 5,898.00 05/14/99
Flood, Doug 700 2,100.00 05/10/99
Maime, Kevin 28,000 84,000.00 04/13/99
Ginter, Dave 1,500 4,500.00 05/10/99
</TABLE>
All of the sales made in 1999 were made pursuant to an exemption from
registration pursuant to Section 505 of Regulation D. The offering
was approved and/or exempted by the required states and the appropriate
Form D was filed with the Securities and Exchange Commission. The
securities were sold to not more than thirty five nonaccredited
investors.
All shares held by current shareholders of ThermoElastic Delaware were
exchanged for 138,164 common shares, 666,400 series A warrants, 666,400
series B warrant and 100,000 options to purchase common shares of the
LPR Cybertek at $1.00 per common share.
The issuances pursuant to the merger were made in reliance upon the
exemption from registration offered by Section 4(2) of the Securities
Act of 1933 and applicable state private offering exemptions.
Based upon the merger documents and the pre-existing relationship
between the shareholders and ThermoElastic, We believe we
had reasonable grounds to believe immediately prior to the merger, and
did in fact believe, when such merger was consummated, that the
shareholders of ThermoElastic Delaware (1) were acquiring for
investment and not with a view to distribution, and (2) had such
knowledge and experience in financial and business matters that they
were capable of evaluating the merits and risks of the merger and were
able to bear those risks. The shareholders of ThermoElastic Delaware
had access to pertinent information enabling them to ask informed
questions. The shares were issued without the benefit of registration.
An appropriate restrictive legend is imprinted upon each of the
certificates representing such shares, and stop-transfer instructions
have been entered in ThermoElastic's transfer records. All such sales
were effected without the aid of underwriters, and no sales commissions
were paid.
<PAGE>48
Item 27. Exhibit Index.
<TABLE>
<S> <C>
(1) Not Applicable
(2) Not Applicable
(3) Articles of Incorporation incorporated by reference
to Form 10SB filed November 25, 1998
(3.2) Amendment to Articles of Incorporation dated August
25, 1998 incorporated by reference to Form 10SB filed
November 25, 1998
(3.3) Bylaws incorporated by reference to Form 10SB filed
November 25, 1998
(3.4) Articles of Merger between ThermoElastic and LPR
Cybertek, Inc. incorporated by reference to Form 8-K
dated July 30, 1999
(4) Specimen certificate for common stock
(4.1) Specimen Warrant certificate
(5) Consent and Opinion of Jody M. Walker regarding
legality of securities registered under this
Registration Statement and to the
references to such attorney in the prospectus filed
as part of this Registration Statement
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) Licensing Agreement by and between ThermoElastic and
Apple Dental Ventures incorporated by reference to
Form SB-2
(10.1) Agreement with Vista Developments, Ltd. incorporated
by reference to amendment 1 to Form SB-2
(10.2) Agreement with Gritell International Limited by
reference to amendment 1 to Form SB-2
(10.3) Agreement with Trilock Financial Corporation by
reference to amendment 1 to Form SB-2
(10.4) Agreement with PEL Moulds, Inc. by reference to
amendment 1 to Form SB-2
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of Meeks, Dorman & Company, P.A., Certified
Public Accountants
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule
(28) Not Applicable
</TABLE>
Item 28. Undertaking.
The undersigned registrant undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(I) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the formation set forth in the
Registration Statement.
(iii) To include any additional or changed material information on the
plan of distribution.
<PAGE>49
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) Delivery of Certificates. The undersigned registrant
undertakes to provide to the Transfer Agent at the closing,
certificates in such denominations and registered in such names as are
required by the Transfer Agent to permit prompt delivery to each
purchaser.
(c) Indemnification. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
provisions set forth in ThermoElastic's articles of incorporation or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>50
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form SB-2 and authorized
this registration statement to be signed on its behalf by the
undersigned, in the City of Blaine, State of Washington on the 25th day
of July, 2000.
ThermoElastic Technologies, Inc.
/s/ Kenneth B. Liebscher
-------------------------------
By Kenneth B. Liebscher
President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
Signature Capacity Date
<S> <C> <C>
/s/Dennis Epstein Director July 25, 2000
-----------------------
Dennis Epstein
/s/Kenneth B. Liebscher President/Director July 25, 2000
-----------------------
Kenneth B. Liebscher
/s/Fred J. Heaps CEO/Director July 25, 2000
-----------------------
Fred J. Heaps
/s/Lawrence Pinkney CFO/Controller July 25, 2000
------------------------
/s/Dr. Lorne Berman Director July 25, 2000
------------------------
/s/Dr. Stephen Rivers Director July 25, 2000
------------------------
Dr. Stephen Rivers
/s/Dr. Ila Berman Director July 25, 2000
------------------------
Dr. Ila Berman
/s/Dr. Gregory K. Slater Director July 25, 2000
------------------------
Dr. Gregory K. Slater
/s/Dr. Izchak Barzilay Director July 25, 2000
------------------------
Dr. Izchak Barzilay
Bonnie D. Walton Director July 25, 2000
------------------------
Bonnie D. Walton
</TABLE>
