U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 2000
Commission File No. 000-30069
THERMAFREEZE, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 95-452-0761
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification Number)
4430 HASKELL AVENUE, ENCINO, CA 91436
(Address of principal executive office)(City, State Zip Code)
Issuer's telephone number, including area code: (818) 784-2445
Check whether the issuer (1) filed reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months or
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 [ ]
There were 22,961,522 shares of the Issuer's Common Stock outstanding
and 5,000,000 of Preferred Stock outstanding as of June 30, 2000.
Transitional Small Business disclosure Format. Yes [ ] No [X]
<PAGE 1>
INDEX
PART I. FINANCIAL INFORMATION ----------------------- P. 3
ITEM 1. FINANCIAL STATEMENTS ----------------------- P. 3
BALANCE SHEET AT JUNE 30, 2000 AND DECEMBER 31, 1999 -------- P. 3
STATEMENT OF OPERATIONS (6 MONTHS) FOR THE PERIODS
ENDING JUNE 30, 2000 AND JUNE 30, 1999 ---------------- P. 4
STATEMENT OF OPERATIONS (3 MONTHS) FOR THE PERIODS
ENDING JUNE 30, 2000 AND JUNE 30, 1999 ----------------- P. 5
STATEMENT OF CASH FLOWS (6 MONTHS) FOR THE PERIODS
ENDING JUNE 30,2000 AND JUNE 30, 1999 ---------------- P. 6
NOTES TO FINANCIAL STATEMENTS ------------------------------ P. 7
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF
PLANS OF OPERATION --------------------------- P. 9
PART II. OTHER INFORMATION -------------------------- P. 13
ITEM 1. LEGAL PROCEEDINGS --------------------------- P. 13
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS --- P. 13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ------------- P. 13
ITEM 4. SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS ------------------- P. 13
ITEM 5 OTHER INFORMATION -------------------------- P. 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ----------------- P. 14
PART III. SIGNATURES --------------------------------- P. 14
<PAGE 2>
PART I. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
THERMAFREEZE, INC.
(A Development Stage Company)
Balance Sheet
June 30, 2000 and December 31, 1999
June 30 December 31
2000 1999
(Unaudited) (Audited)
ASSETS
Assets:
Cash $ 522 $ 1,503
Accounts receivable 12,807 5,105
Furniture, fixtures and equipment, net 908 1,090
---------- ----------
Total Assets $ 14,236 $ 7,698
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Notes Payable Shareholders $1,175,615 $1,081,263
Accrued and other liabilities 196,329 108,158
---------- ----------
Total Liabilities 1,371,944 1,189,421
---------- ----------
Common Stock, $0.001 par value,
40,000,000 shares authorized; 22,961,522
shares issued and outstanding at 6/30/00
and 12/31/99 22,512 22,512
Preferred Stock, $0.001 par value,
10,000,000 shares authorized; 5,000,000
shares issued and outstanding at 6/30/00
and 12/31/99 5,000 5,000
Additional paid-in capital 2,106,750 2,106,750
Deficit accumulated during development stage (3,491,969) (3,315,985)
---------- ----------
Total Stockholders' Deficit (1,357,707) (1,181,723)
---------- ----------
Total Liabilities and Stockholders' Deficit $ 14,236 $ 7,698
========== ==========
The accompanying notes are an integral part of these financial
statements. The balance for December 31, 1999 were taken from the
audited financial statements at that date.
See 1st Quarter 1-QSB for comments on events that occurred during that
period.
<PAGE 3>
PART I. FINANCIAL INFORMATION, ITEM 1 FINANCIAL STATEMENTS (CONT.)
THERMAFREEZE, INC.
(A Development Stage Company)
Income Statements
For 6 Months
June 30, 2000 and June 30, 1999
STATEMENT OF OPERATIONS June 30, June 30
2000 1999
(Unaudited) (Audited)
Revenue $ 117,784 25,698
Research and development 139,225 136,476
General and administrative expenses 84,849 120,886
Depreciation 181 182
---------- ----------
Net deficit before other expenses (106,471) (125,430)
Other expenses Interest 69,490 31,281
---------- ----------
Net deficit accumulated
during development stage $(175,961) $ (156,711)
========== ==========
Weighted average number of
common shares outstanding 22,961,522 22,511,522
Net (loss) per share $ (0.0077) $ (0.007)
=========== ==========
<PAGE 4>
PART I. FINANCIAL INFORMATION, ITEM 1 FINANCIAL STATEMENTS (CONT.)
THERMAFREEZE, INC.
(A Development Stage Company)
Income Statements
For 3 Months
June 30, 2000 and June 30, 1999
STATEMENT OF OPERATIONS Qtr Ending Qtr Ending
June 30, June 30
2000 1999
(Unaudited) (Audited)
Revenue $ 101,883 $ 19,490
Research and development 83,922 79,480
General and administrative expenses 68,423 46,335
Depreciation 101 91
---------- ----------
Net deficit before other expenses (50,563) (106,416)
Other expenses Interest 35,794 32,084
---------- ----------
Net deficit accumulated
during development stage $ (86,357) $ (138,500)
========== ==========
Weighted average number of
common shares outstanding 22,961,522 22,511,522
Net (loss) per share $ (0.0038) $ (0.0062)
=========== ==========
<PAGE 5>
PART I. FINANCIAL INFORMATION, ITEM 1 FINANCIAL STATEMENTS (CONT.)
THERMAFREEZE, INC.
(A Development Stage Company)
Statement of Cash Flows
6 Months
For the Periods
June 30, 2000 and June 30, 1999
STATEMENT OF CASH FLOWS June 30, June 30
2000 1999
(Unaudited) (Audited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(175,961) $(295,211)
Depreciation 182 182
(Increase)/Decrease in accounts receivable (7,725) (10,319)
Increase in other liabilities 88,171 37,703
--------- ---------
Net cash used by operating activities (95,333) (267,645)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Notes payable-shareholders 94,352 99,909
Additional paid-in capital 0 170,275
--------- ---------
Net cash provided by financing activities 94,352 270,174
--------- ---------
Beginning cash 1,503 2,283
--------- ---------
Ending cash $ 522 $ 4,822
======== =========
<PAGE 6>
PART I. FINANCIAL INFORMATION, ITEM 1 FINANCIAL STATEMENTS (CONT.)
THERMAFREEZE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
PART I BASIS OF PRESENTATION:
Note 1. The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments, consisting of normal recurring
accruals, considered necessary for a fair presentation have been
included. It is suggested that these financial statements be read in
conjunction with the December 31, 1999 audited Financial Statements and
the notes thereto for ThermaFreeze, Inc.
The Company's financial statements present the company as a going
concern, which contemplates the realization of asset and liquidation of
liabilities in the normal course of business. Without realization of
additional capital, it would be unlikely for the Company to continue as
a going concern.
Accounting policies and procedures have not been determined except as
follows:
1. The Company uses the accrual method of accounting.
2. Earning per share is computed using the weighted average number
of shares of common stock outstanding.
3. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
4. The cost of equipment is depreciated over the estimated useful
life of the equipment.
5. The company has adopted December 31 as its fiscal year end.
Note 2. There are no inventory values reflected in the statements as
they have been expensed.
Note 3. Related Party Transactions: Stockholder's advanced additional
loans in the amount of $13,045 on Demand Notes at 12% annual interest
rate compounded monthly.
Note 4. Property and Equipment: No new Property or Equipment was added
during this quarter ending 6/30/00.
<PAGE 7>
PART I. FINANCIAL INFORMATION, ITEM 1 FINANCIAL STATEMENTS (CONT.)
Note 5. Income Taxes: There are no Income Taxes due as of the date June
30, 2000. The Company will review its need for a provision for federal
income tax after each operating quarter and each period for which a
statement is issued.
Note 6. Stockholder's Equity
1. There were no preferred stocks issued in the quarter ending June
30, 2000.
2. The Company offered a Warrant Package in 1999: Each warrant unit
contains 100,000 shares of restricted common stock and 33,334
warrants to purchase 33,334 shares of common stock at $0.15 per
share exercisable for a 2-year period from the purchase date.
During the year ended December 31, 1999, 408,342 warrants/shares
were issued. There were no warrants issued in the quarter ending
March 31, 2000.
3. There was no contribution of donated capital in the quarter
ending June 30, 2000.
Note 7. Results of the 2nd quarter of 2000 operation:
1. Assets were increased by $11,968.
2. Accrued and Other Liabilities increased by $91,427.
3. Stockholder loans were increased by $13,045.
4. There was no issue of stocks.
5. There was no additional paid-in-capital.
6. Operational loss for the period is $86,357 compared to loss of
$138,500 for quarter ending June 30, 1999.
7. Revenue for sales was $101,883 compared to second quarter of 1999
of $19,490, an increase of $82,393. These include the final
payment of DeliveSafe deposit on its license agreement.
8. Operational expense was $188,240 compared to second quarter of
1999 of $157,990.
9. Based on weighted average number of shares outstanding in both
periods the net loss per share was $.0038 in 2000 compared to
$.0062 in 1999.
<PAGE 8>
ITEM 2 : MANAGEMENT DISCUSSION & ANALYSIS OF PLAN OF OPERATION
The following discussion and analysis should be read in conjunction
with the company's Financial Statements and notes thereto included
elsewhere in this Form 10-QSB. Except for historical information
contained herein, the discussion in this Form 10-QSB contains certain
forward looking statements that involve the risks and uncertainties,
such as statements of the Company's plans, objectives, expectations and
intentions. The cautionary statements made in this Form 10-QSB should
be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-QSB. This statements include,
without limitation, statements concerning potential operations and
results of the Company and information relating to Year 2000 matters,
described below. The Company's actual results could differ materially
from those discussed herein. Factors that could cause or contribute to
such differences, include, without limitation, to those factors
discussed herein and in the Company's Form 10-SB for the year ending
12/31/99.
RECENT DEVELOPMENTS
We have either successfully completed testing and specific product use
or are currently involved in the test process and system application
for several food companies in both the United States and Western
Europe, who have historically been unable to eliminate spoilage and
cost effectively ship or deliver their perishable food products. We
have focused a major part of our sales and marketing roll out in
support of our first licensed joint venture partner, DeliverSafe Inc.
DeliverSafe, a private company currently engaged in a second round
private placement anticipatory to an IPO, is the worldwide value added
manufacturer and distributor for the ThermaFreeze patent pending system
for shipping/delivery of temperature sensitive perishable food. This
system has now been 100% successful and highly cost effective in
shipping or delivery of perishable food ranging from Swiss chocolate to
fish. The DeliverSafe perishable food system is the only proven method
for shipping or delivery without a refrigeration power source.
Completed customer product tests include Albertsons, the second largest
U.S. grocery chain, for non-attended perishable food delivery.
Albertsons tests allowed eight hours of protection for frozen ice
cream, fresh fish, milk, eggs etc. in outside ambient temperatures in
excess of 100 Degrees f. Another field test allowed Wendy's independent
food quality testing laboratory to replace dry ice and eliminate spoiled
or freeze altered samples of french fries, chicken and beef from their
many vendors. The DeliverSafe System solves perishable food
shipping/delivery problems for all food companies from "new economy"
Internet retail and wholesale perishable food sales to creating new
distribution methods for "old economy" perishable food companies. One
of the three largest U.S. candy manufacturers has successfully opened
new national retail sales by using the DeliverSafe products.
<PAGE 9>
ITEM 2 MANAGEMENT DISCUSSION & ANALYSIS OF PLAN OF OPERATION (CONT.)
The following is a partial list of either tests in progress, test
completed or initial customer orders :
NORTH AMERICA
1. Consolidated Products Services
This customer is "the largest candy distributor in the US" with
distribution centers in Indianapolis, IN, Kennesaw, GA, Grand
Prairie, TX, Milwaukee, WI, Aurora, CO, Melbourne, FL and their
headquarters in Mechanicsburg, PA. The original order was for 5,500
DeliverSafe ThermaBarrier liners. We are initially shipping to
each distribution center on a weekly basis. Customer feedback on
product performance is "excellent."
2. Tyson Distribution
This key customer is a major contract shipper for one of the three
largest confectioners in the world. We have shipped 69 cases of 6 x
6 ThermaFreeze pads YTD with 51 more in production. We expect them
to average 40 cases per month from June through September just to
ship one brand of candy. All shipments are sent by UPS ground
service with six pads of ThermaFreeze as the only protection for
each master case. They have not experienced a single thermal
failure.
3. Wendy's International
We have performed two test shipments for Wendy's Quality Assurance
department in Ohio. We are about to enter the final test phase with
a custom DeliverSafe system. Once that test is completed and
approved, we expect all of Wendy's QA samples to be shipped with our
DeliverSafe system. All three raw materials (beef, poultry and
potatoes) are shipped from numerous production sites across the
country to an independent lab in Columbus, OH for QA testing.
4. Albertsons.com
This company's primary E-commerce facility in Fort Worth, TX is
being modified at this time to handle perishable goods. This is a
critical move since the main profit stream in the grocery business
is from perishables and value-added products. They have worked only
with dry goods up to this point in order to gain a clear
understanding of the Internet grocery segment's market prospects.
We have been informed that they will be ready to begin using the
DeliverSafe system towards the end of 2000.
5. Shanghai, China Fish
We have successfully concluded small FedEx shipments of frozen,
cooked crawfish for this customer. The crawfish are imported from
China in 40-foot containers and distributed across the US. There
are several containers inbound at this time. The next stage is the
shipment of five-pound shipments to locations across the US.
<PAGE 10>
ITEM 2 : MANAGEMENT DISCUSSION & ANALYSIS OF PLAN OF OPERATION (CONT.)
EUROPE
1. Airline Catering Operations
(a) Austrian Airlines has completed successful testing of ThermaFreeze
refrigerant.
(b) Swissair is conducting tests at their subsidiaries, Crossair and
Gate Gourmet. Tests have been successful and continuing.
(c) Singapore Airlines is conducting tests at their Zurich station.
(d) LSG Skychef in Milan has completed successful testing of
ThermaFreeze refrigerant. They are quite interested in
implementing the product once we can provide a HydraFreezer at
their location.
2. Givaudan
This company produces aromatics in Switzerland as food additives.
They are currently testing ThermaFreeze refrigerant.
3. Nestle's
They have conducted successful stationary tests in their Swiss
headquarters. In early July they successfully completed a 3-day
field test of 20 cases of candy from Zurich to Guatemala, via
Madrid. We await the next stage in the sales cycle, which will
occur after the European August holidays.
4. Kintetsu
This company is a primary freight forwarder for Nestle's. They have
informed Nestle's that they have found the answer (ThermaFreeze
refrigerant) to their thermal failure problems.
5. Fisco-Findus
They are a Nestle's subsidiary and are currently testing
ThermaFreeze refrigerant to ship seafood in Central and Western
Europe.
6. Teuscher Chocolate
This company is considered by many to be the premier Swiss
chocolatier. Mr. Teuscher himself conducted tests in June, using
ThermaFreeze refrigerant to ship his chocolate to Italy, France and
Texas. After testing, Teuscher purchased one case of 6 x 8 pads to
determine how many cases of various pad sizes they will need to fit
their wide variety of box sizes.
7. Hugo Dubno
This "fancy food" distributor and a member of the Swiss Food Coop,
is a beginning customer in Zurich, using our products to ship across
Europe.
8. Top Toque
Members of the Swiss Food Coop. They have completed successful
testing of ThermaFreeze refrigerant to ship seafood. Their French
subsidiary is currently conducting tests. We expect fall production
orders.
<PAGE 11>
ITEM 2 : MANAGEMENT DISCUSSION & ANALYSIS OF PLAN OF OPERATION (CONT.)
9. Migros
This is the top Internet, e-mail and Fax food ordering distributor
in Switzerland with 15,000 shipments per day. They are in test
mode.
In order to maximize revenue potential, DeliverSafe, Inc. must secure
additional financing (thus their current private placement) for
machinery and equipment necessary to facilitate a "Just in Time"
availability of DeliverSafe Systems to large food companies. Smaller
companies can immediately utilize and benefit from the System.
According to DeliverSafe,when fully customer installed, the prospective
food business can contribute $5,000,000 + to ThermaFreeze, Inc. annual
revenue and grow at least 100% annually for five years thereafter.
<PAGE 12>
PART II. OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None
<PAGE 13>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
None
(B) REPORTS ON FORM 8-K
None.
PART III. SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON BEHALF OF
THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
THERMAFREEZE, INC.
-----------------
Date: July 31, 2000
By:/s/ Joseph Murray
----------------------
JOSEPH MURRAY, President
By: /s/ Thomas Pryor
-----------------------
THOMAS PRYOR, CPA
<Page 14>
