Page 1
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 333-91825
THERMOELASTIC TECHNOLOGIES, INC.
- --------------------------------
(Name of Small Business Issuer in its Charter)
COLOCRADO 51-0387926
--------------- --------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5466 Canvasback Rd
Blaine, WA 98230
-----------------------------
(Address of Principle Executive Offices)
Issuer's Telephone Number: (306) 371-5061
Check whether the Issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Company was required to file such reports). And (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
---- ---- ---- ----
<PAGE>
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(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each Issuer's classes of common
equity, as of the latest practicable date:
December 31, 1999: Common Stock - 17,338,164
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is contained in Item
6 of this report.
Transitional Small Business Issuer Format Yes No X
----- -----
<PAGE>
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THERMOELASTIC TECHNOLOGIES, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements:
Balance Sheets as of December 31, 1999 and
September 30, 1999 5
Statements of Operations for the three months ended
December 31, 1999 and December 31, 1998 and the twelve months ended
December 31, 1999 and December 31, 1998 and from Inception through
December 31, 1999 6
Statements of Cash Flow for the three months ended
December 31, 1999 and December 31, 1998 and the twelve months ended
December 31, 1999 and December 31, 1998 and from Inception through
December 31, 1999 7
Notes to Financial Statements for the three months ended
December 31, 1999 and December 31, 1998 and the twelve months ended
December 31, 1999 and December 31, 1998 and from Inception through
December 31, 1999 9
Item 2. Management's Discussion and Analysis or Plan of Operation 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Securities Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8 - K 11
Signatures 12
<PAGE>
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Financial Statements of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together with related Notes. In the opinion of management, these Financial
Statements fairly present the financial condition of the Company, but should be
read in conjunction with the Financial Statements of the Company for the year
ended September 30, 1999 previously filed with the Securities and Exchange
Commission.
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THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31, 1999 and September 30, 1999
ASSETS
<TABLE>
<CAPTION>
Current assets: December 31, 1999 Sept. 30, 1999
<S> <C> <C>
Cash $ 3,408 $ 26,926
Accounts receivable 137 663
Inventory 11,000 11,000
Travel advances 3,000 3,000
--------------------------------
Total current assets $ 17,548 41,589
--------------------------------
Product rights 250,000 250,000
Fixed Assets (Net) 3,680 3,680
Website (Net) 8,420 9,021
--------------------------------
Total Assets $ 279,645 $ 304,290
--------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts Payable and Accrued Liabilities $ 36,,019 $ 9,025
Product Rights Payable 75,0000 75,000
--------------------------------
Total Current Liabilities $ 111,019 $ 84,025
--------------------------------
Due to related parties 89,533 15,460
--------------------------------
Total Liabilities $ 200,552 $ 99,485
--------------------------------
Stockholders' equity (Deficiency)
Share Capital - Note 2
Authorized:
100,000,000 common shares $0.0001 par value
20,000,000 preferred shares $0.0001 par value
Issued:
17,338,164 common shares $ 1,720 $ 1,720
Additional paid-in capital 569,473 569,473
Deficit accumulated during the development stage (486,979) (361,267)
Foreign currency translation (5,121) (5,121)
Total stockholders' equity 79,093 204,805
--------------------------------
Total Liabilities and Stockholders' Equity $ 279,645 $ 304,290
--------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
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THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS PERIODS ENDED DECEMBER 31, 1999, AND DECEMBER 31, 1998, AND
FOR THE PERIOD JANUARY 21,1999 (INCEPTION) THROUGH DECEMBER 31, 1999
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS JAN 21,1999
ENDED DEC.31 ENDED DEC.31 (DATE OF INCEPTION)
1999 1998 TO DECEMBER 31, 1999
<S> <C> <C> <C>
SALES $ 1,528 $ - $ 4,965
COST OF SALES 900 - 2,717
-------------- -------------- --------------
GROSS PROFIT 628 - 2,248
-------------- -------------- --------------
OPERATING EXPENSES $ 126,340 $ - $ 489,227
-------------- -------------- --------------
LOSS BEFORE OTHER ITEMS $ (125,712) $ - $ (486,979)
OTHER ITEMS
FOREIGN CURRENCY ADJUSTMENT - - $ (5,121)
-------------- -------------- --------------
NET (LOSS) $ (125,712) $ - $ (492,100)
-------------- -------------- --------------
BASIC AND DILUTED
LOSS PER SHARE $ (0.007) $ - $ (0.028)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
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THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS PERIODS ENDED DECEMBER 31, 1999, AND DECEMBER 31, 1998, AND
FOR THE PERIOD JANUARY 21,1999 (INCEPTION) THROUGH DECEMBER 31, 1999
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS JAN 21,1999
(DATE OF ENDED DEC.31 ENDED DEC.31 (DATE OF INCEPTION)
1999 1998 TO DECEMBER 31, 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET (LOSS) $ (125,712) $ - $ (492,100)
ADD: ITEMS NOT
AFFECTING CASH
DEPRECIATION 601 - 945
CHANGES IN ASSETS
AND LIABILITIES
ACCOUNTS RECEIVABLE 526 - (137)
INVENTORY - - (11,000)
TRAVEL ADVANCES - - ( 3,000)
ACCOUNTS PAYABLE 26,994 - 35,473
DUE TO RELATED PARTIES 74,073 - 89,533
PRODUCT RIGHTS PAYABLE - - 75,000
-------------- -------------- --------------
NET CASH (USED) BY
OPERATING ACTIVITIES $ (23,518) - $ (305,286)
-------------- -------------- --------------
CASH FLOW FROM
INVESTING ACTIVITIES
PRODUCT RIGHTS $ - $ - $ (230,000)
WEBSITE - - ( 9,021)
EQUIPMENT - - ( 3,445)
OTHER - - 81
-------------- -------------- --------------
NET CASH (USED) BY
INVESTMENT ACTIVITIES $ - $ - $ (242,385)
-------------- -------------- --------------
CASH FLOWS FROM
FINANCING ACTIVITIES
PROCEEDS FROM ISSUANCE
OF COMMON SHARES $ - $ - $ 700,915
COST OF ACQUISITION
OF LPR CYBERTECH - - (149,836)
-------------- -------------- --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES $ - $ - $ 551,079
-------------- -------------- --------------
CASH AT BEGINNING
OF PERIOD $ 26,926 $ - $ -
CASH AT END
OF PERIOD 3,408 $ - $ 3,408
-------------- -------------- --------------
NET INCREASE (DECREASE)
IN CASH $ (23,518) $ - $ 3,408
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
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THERMOELASTIC TECHNOLOGIES, INC.
NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIODS ENDED DECEMBER
31, 1999 AND DECEMBER 31, 1998 AND FOR THE PERIOD JANUARY 21,1999 (INCEPTION)
THROUGH DECEMBER 31, 1999.
1. BASIS OF PRESENTATION
In the opinion of management, the unaudited financial statements for the period
ended December 31,1999 (first quarter), reflect all normally recurring
adjustments necessary to fairly present the Company's financial position and
results of operations for the periods indicated. The accompanying interim
financial statements should be read in conjunction with the financial statements
and related notes included in the Company's 10-KSB for the period ended
September 30, 1999, which has been filed with the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the Company's annual financial statements have been omitted from the quarterly
financial statements based upon Securities and Exchange Commissions rules and
regulations. Net loss per common and common equivalent share was computed based
on the net loss divided by the weighted average number of common and common
equivalent shares outstanding, unless antidilutive, during the year presented.
2. FINANCING
Common Additional
Shares Paid-in
# Par Value Capital
------- --------- -------
Balance, September 30, 1999 17,338,164 $ 1,720 $ 569,473
NO CHANGES IN PERIOD
---------- --------- ----------
Balance, December 31, 1999 17,338,164 $ 1,720 $ 569,473
========== ========= ==========
Capital raised was used to fund operations. The Company anticipates needing
additional capital to fund operations during the upcoming year. The Company
intends to raise capital through a combination of the private placement of its
securities, establishing operating lines of credit, and through the sale of
product.
3. RELATED PARTY TRANSACTIONS
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. 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. 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.
4. DESCRIPTION OF SECURITIES
Qualification. The following statements constitute brief summaries of
ThermoElastic's Articles of Incorporation and Bylaws, as amended. Such
summaries do not purport to be complete and are qualified in their entirety to
the full text of the Articles of Incorporation and Bylaws.
<PAGE>
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Our Articles of Incorporation authorize the issuance of up to 100,000,000 common
shares.
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 by ThermoElastic.
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, subject to certain conditions, 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 are subject to 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, subject to certain conditions, 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 are subject to 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.
Item 2. Management's Discussion and Analysis or Plan of Operations
The Company is in its initial stages of development with minor revenues and
income and is subject to all the risks inherent in the creation of a new
business. Since the Company's principal activities to date have been limited to
organizational activities, prospect development, and acquisition of interests,
it has no record of any material revenue-producing operations. Consequently,
there is no operating history upon which to base an assumption that the Company
will be able to achieve its business plans.
PRINCIPAL PRODUCT.
ThermoElastic Technologies, Inc., a development stage entity (the "Company" or
"TTI"), was incorporated on January 21, 1999, in the State of Delaware to carry
on the business of marketing and distributing a new generation acrylic, known as
Biocompatible Intraoral Thermo Elastic Material ("BITEM"), which is anticipated
to be sold to dental related businesses and other allied fields throughout the
world. 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. As a result of the
merger, the Company's name was changed to ThermoElastic Technologies Inc. The
goal of ThermoElastic Technologies, Inc. (TTI) is to market products throughout
specified geographical locations in the dental field. Licensing agreements will
be entered into with qualified companies and individuals to expand its use into
other diverse areas and products.
<PAGE>
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ThermoElastic, over the next twelve months intends to market and distribute
dental applications in the United States and internationally and to utilize the
World Wide Web in the implementation of its planned business operations.
ThermoElastic shall conduct of product research and development as funds allow.
Management possesses the experience to implement its business plan. No
significant equipment purchases are planned over the next twelve months.
LIQUIDITY AND CAPITAL RESOURCES
ThermoElastic currently has no material commitments for capital expenditures.
For the period from inception (January 21, 1999) to December 31, 1999,
ThermoElastic Delaware (prior to the merger) purchased product rights for
$250,000 consisting of $230,000 cash and common shares valued at $20,000 and had
website costs of $9,021. For that same period, ThermoElastic Delaware had an
increase in deposits of $5,000 and purchase equipment for $4,023. As a result,
ThermoElastic Delaware had net cash used by investing activities of $242,385 for
the period from inception to September 30, 1999.
For the period from inception to December 31, 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 December 31, 1999.
We expect to use any proceeds received from the exercise of the Series A and B
Warrants to expand operations. However, we cannot be assured that the warrants
will be exercised or that our sales will meet our growth expectations. Should
either of these fail to occur, we may elect to (i) reduce the planned expansion
of operations or (ii) pursue other financing alternatives such as a rights
offering, warrant exercise or borrowings. Our planned growth and profitability
could be delayed or diminished if the two options listed above are not
implemented. ,
ADDITIONAL FINANCING
Over the next two years, our liquidity is dependent on increased revenues from
operations, additional infusions of capital and debt
financing. We 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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
not applicable.
Item 2. Changes in Securities and Use of Proceeds.
not applicable.
Item 3. Defaults Upon Senior Securities.
not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
not applicable.
Item 5. Other Information.
not applicable.
Item 6. Exhibits and Reports on Form 8-K.
<PAGE>
PAGE 11
(a) Reports on Form 8-K.
8K-10/1/99
8Ka-11/16/99
(b) Exhibits.*
Exhibit 27 - Financial Data Schedule
* A summary of any Exhibit is modified in its entirety by reference to the
actual Exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
THERMOELASTIC TECHNOLOGIES, INC
By: /s/ Kenneth B. Liebscher
President and Director
By: /s/ Bernie Teitelbaum
Secretary/Treasurer and Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATIONS FOR THERMOELASTIC, INC. A DEVELOPMENT STAGE
COMPANY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> SEP-30-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,408
<SECURITIES> 0
<RECEIVABLES> 136
<ALLOWANCES> 0
<INVENTORY> 11,000
<CURRENT-ASSETS> 17,544
<PP&E> 263,045
<DEPRECIATION> 945
<TOTAL-ASSETS> 270,644
<CURRENT-LIABILITIES> 200,550
<BONDS> 0
0
0
<COMMON> 1,720
<OTHER-SE> 77,374
<TOTAL-LIABILITY-AND-EQUITY> 279,644
<SALES> 1,528
<TOTAL-REVENUES> 1,528
<CGS> 900
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 162,340
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (125,712)
<EPS-BASIC> 0.007
<EPS-DILUTED> 0.007
</TABLE>
