<PAGE>2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d)
Securities Exchange Act of 1934
for Quarterly Period Ended March 31, 2000
- -OR-
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from _________ to________
Commission File Number 333-91825
ThermoElastic Technologies, Inc.
- --------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 51-0387926
- - --------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
5446 Canvasback Road, Blaine, WA 98230
- - -------------------------------------------------------------------
(Address of principal executive offices, Zip Code)
360-371-5061
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(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
The number of outstanding shares of the registrant's common stock,
March 31, 2000: Common Stock - 17,338,164
<PAGE>3
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
2000 1999
(NOTE 1) (NOTE 1)
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,628 $ 26,926
Accounts receivable 722 663
Inventory, net 9,645 11,000
Travel advances 3,000 3,000
------------- ------------
Total current assets 14,995 41,589
------------- -----------
Property and equipment, net 3,680 3,680
Other assets:
Product rights 250,000 250,000
------------- ------------
$ 268,675 $ 295,269
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 40,539 $ 9,025
Due to related parties 167,358 15,460
Product rights payable 75,000 75,000
------------- -------------
Total liabilities 282,897 99,485
------------- -------------
Stockholders' equity:
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 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
------------- -------------
$ 268,675 $ 295,269
============ ===========
</TABLE>
Unaudited -- See accompanying notes to condensed financial statements.
<PAGE>4
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
January 21,
Three Months January 21, Six Months January 21, 1999 (Date of
Ended 1999 to Ended 1999 to Inception) to
March 31, March 31, March 31, March 31, March 31,
2000 1999 2000 1999 2000
------------ ------------ ------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES: $ 1,970 $ 9 $ 3,498 $ 9 $ 6,935
COSTS AND EXPENSES:
Cost of sales 455 - 1,355 - 3,172
Selling, general & administrative 90,157 14,516 216,497 14,516 588,405
---------- ----------- ----------- --------- ----------
90,612 14,516 217,852 14,516 591,577
OPERATING LOSS (88,642) (14,507) (214,354) (14,507) (584,642)
--------- ----------- ----------- --------- -----------
OTHER INCOME (EXPENSE) 4,348 - 4,348 - (773)
--------- ----------- ----------- --------- ----------
NET LOSS $(84,294) $(14,507) $(210,006) $(14,507) $(585,415)
======== =========== =========== ========= ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 17,292,575 13,150,000 17,246,035 13,150,000
========== =========== =========== ===========
NET (LOSS) PER PRIMARY
AND DILUTED SHARE $ (.01) $ (.00) $ (.01) $ (.00)
========= ========== =========== ==========
</TABLE>
Unaudited -- See accompanying notes to condensed financial statements.
<PAGE>5
THERMOELASTIC TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE ENTITY)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
January
January 21, 1999
Six Months 21, 1999 (Date of
Ended Thru Inception)
March 31, March 31, to March
2000 1999 31, 2000
-------- --------- -----------
<S> <C> <C> <c
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (210,006) $ (14,507) $(585,415)
Adjustments to reconcile net loss to
net cash flows used in operating activities:
Depreciation and amortization - - 344
Changes in assets and liabilities:
(Increase) in accounts receivable (59) - (722)
Decrease (increase) in inventory 1,355 - (9,645)
(Increase) in travel advances - - (3,000)
Increase in due to related parties 151,898 - 167,358
Increase in accounts payable 31,514 - 39,993
Increase in product rights payable - - 75,000
--------- ---------- ----------
Net cash flows used in operating activities (25,298) (14,507) (316,087)
--------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of product rights - - (230,000)
Purchase of property and equipment - - (3,445)
Increase in deposits - (5,000) -
Cash acquired in reverse acquisition - - 81
--------- --------- ---------
Net cash (used for) investing activities - (5,000) (233,364)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - 201,815 700,915
Cost of acquisition of LPR Cybertech - - (149,836)
--------- --------- --------
Net cash flows from financing activities - 201,815 551,079
--------- --------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (25,298) 182,308 1,628
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 26,926 - -
--------- -------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,628 $ 182,308 $ 1,628
========= ========= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ - $ - $ -
Purchase of product rights through issuance
of stock $ - $ - $ 20,000
Liabilities not assumed in reverse acquisition $ - $ - $ 2,235
</TABLE>
Unaudited-See accompanying notes to condensed financial statements.
<PAGE>6
THERMOELASTIC TECHNOLOGIES, INC. NOTES TO THE FINANCIAL STATEMENTS FOR
THE SIX MONTHS PERIODS ENDED MARCH 31, 2000 AND MARCH 31, 1999 AND FOR
THE PERIOD JANUARY 21,1999 (INCEPTION) THROUGH MARCH 31, 2000.
1.BASIS OF PRESENTATION
In the opinion of management, the unaudited financial statements for
the period ended March 31, 2000 (second 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. SIGNFICANT ACCOUNTING POLICIES
Loss Per Share
During 1998, the Company adopted SFAS No. 128, "Earnings Per Share,"
which requires presentation of basic loss per share ("Basic LPS") and
diluted loss per share ("Diluted LPS"). The computation of Basic LPS
is computed by dividing loss available to common stockholders by the
weighted average number of outstanding common shares during the period.
Diluted LPS gives effect to all diluted potential common shares
outstanding during the period. The computation of Diluted LPS does
not assume conversion, exercise or contingent exercise of securities
that would have an anti-dilutive effect on earnings.
3. GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company has had
limited revenue. Without realization of additional capital, it would
be unlikely for the Company to continue as a going concern. It is
management's plan to seek additional capital through a public offering.
4. STOCKHOLDERS' EQUITY
During the three months ended March 31, 2000, the Company issued the
138,164 shares of common stock that had been agreed upon in the reverse
acquisition dated July 15, 1999. The agreement called for the issuance
of one share of the public company's stock for each 100 shares of
ThermoElastic stock outstanding.
<PAGE>7
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.
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 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.
RESULTS OF OPERATIONS
The Company has received $3,000 in revenue for the six months ended
March 31, 2000, compared to $0 in the comparable period for 1999. The
Company has incurred $91,000 in expenses for the three months ended
March 31, 2000 compared to $15,000 for the comparable period ended
March 31, 1999. The Company has incurred $218,000 of expenses for the
six months ended March 31, 2000 compared to $15,000 for the comparable
period in 1999. The increase in expenses for both the three and six
month periods is primarily attributable to the first quarter of 1999
being the start-up phase of the Company.
LIQUIDITY AND CAPITAL RESOURCES
ThermoElastic currently has no material commitments for capital
expenditures.
For the period from inception (January 21, 1999) to March 31, 2000,
ThermoElastic Delaware (prior to the merger) purchased product rights
for $250,000 consisting of $230,000 cash and common shares valued at
$20,000. For that same period, ThermoElastic Delaware had an increase
in deposits of $5,000 and purchased equipment for $3,445. As a result,
ThermoElastic Delaware had net cash used by investing activities of
$242,385 for the period from inception to March 31, 2000. For the
period from inception to March 31, 2000, 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 March 31, 2000.
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.
<PAGE>8
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 three 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.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
Future Operating Results - Future operating results may be impacted by
a number of factors that could cause actual results to differ
materially from those stated herein, which reflect management's current
expectations. These factors include worldwide economic and political
conditions, industry specific factors, the Company's ability to
maintain access to external financing sources and its financial
liquidity, and the Company's ability to manage expense levels.
Need for Additional Capital - As of Mach 31, 2000, the Company had
approximately $2,000 of cash. The Company has experienced negative
cash flow since inception and expects the negative cash flow to
continue until significant revenue is generated by the Company. The
Company's future success is highly dependent upon its continued access
to sources of financing which it believes are necessary for the
continued marketing of the Company. In the event the Company is unable
to maintain access to its existing financing sources, or obtain other
sources of financing, there would be a material adverse effect on the
Company's business, financial position and results of operations.
Forward Looking Statements - This report contains certain forward-
looking statements that are based on current expectations. In light of
the important factors that can materially affect results, including
those set forth above and elsewhere in this report, the inclusion of
forward-looking information herein should not be regarded as a
representation by the Company or any other person that the objectives
or plans of the Company will be achieved. The Company may encounter
competitive, technological, financial and business challenges making it
more difficult than expected to continue to market its products and
services; competitive conditions within the industry may change
adversely; the Company may be unable to retain existing key management
personnel; the Company's forecasts may not accurately anticipate market
demand; and there may be other material adverse changes in the
Company's operations or business. Certain important factors effect the
forward looking statements made herein include, but are not limited to
(i) accurately forecasting capital expenditures and (ii) obtaining new
sources of external financing.
Assumptions relating to budgeting, marketing, product development and
other management decisions are subjective in many respects and thus
susceptible to interpretations and periodic revisions based on actual
experience and business developments, the impact of which may cause the
Company to alter its capital expenditure or other budgets, which may in
turn affect the Company's financial position and results of operations.
<PAGE>9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. not applicable.
Item 2. Changes in Securities and Use of Proceeds. not applicable.
Additional common stock of 138,164 was issued and disbursed evenly
among the shareholders per the Merger Contract. This addition, with a
par value of $.0001, reflects a total common stock addition of $14.00.
Item 3. Defaults Upon Senior Securities. not applicable.
Item 4. Submission of Matters to a Vote of Security Holders. not
applicable.
Item 5. Other Information. not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Reports on Form 8-K. 8K-10/1/99 8Ka-11/16/99
(b) Exhibits.* Exhibit 27 - Financial Data Schedule
* A summary of any Exhibit is modified in its entirety by reference to
the actual Exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
THERMOELASTIC TECHNOLOGIES, INC
By: /s/ Kenneth B. Liebscher President and Director
By: /s/ Bernie Teitelbaum Secretary/Treasurer and Director EX-27 2
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,628
<SECURITIES> 0
<RECEIVABLES> 722
<ALLOWANCES> 0
<INVENTORY> 9,645
<CURRENT-ASSETS> 14,995
<PP&E> 4,024
<DEPRECIATION> 344
<TOTAL-ASSETS> 268,675
<CURRENT-LIABILITIES> 282,897
<BONDS> 0
<COMMON> 1,734
0
0
<OTHER-SE> (15,956)
<TOTAL-LIABILITY-AND-EQUITY> 268,675
<SALES> 3,498
<TOTAL-REVENUES> 3,498
<CGS> 1,355
<TOTAL-COSTS> 217,853
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (210,006)
<INCOME-TAX> 0
<INCOME-CONTINUING> (210,006)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (210,006)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
