UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SEURITIES OF
SMALL BUSINESS ISSUERS Under Section 12(b) or
(g) of the Securities Exchange Act of 1934
ThermaFreeze, Inc.
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(Name of Small Business Issuer in its charter)
Delaware 95-4520761
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
4430 Haskell Avenue, Encino, CA 91436
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(Address of principal executive offices) (zip code)
818-784-2445
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Issuer's Telephone Number
Securities to be registered under section 12(b) of the Act:
Title of Each Class Name on each exchange on which
to be registered each class is to be registered
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Securities to be registered under section 12(g) of the Act:
Common Stock, $.001 par value per share, 40,000,000 shares authorized,
22,511,522 issued and outstanding as of December 31, 1999. Preferred
Stock, $.001 par value per share, 10,000,000 shares authorized,
5,000,000 issued and outstanding as of December 31, 1999.
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FORWARD LOOKING STATEMENTS
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
ThermaFreeze, Inc., herein referred to as the ("Company") or ("THFZ") cautions
readers that certain important factors may affect the Company's actual
results and could cause such results to differ materially from any
forward-looking statements that may be deemed to have been made in this
Document or that are otherwise made by or on behalf of the Company. For
this purpose, any statements contained in the Document that are not
statements of historical fact may be deemed to be forward-looking
statements. This Registration contains statements that constitute
"forward-looking statements". These forward-looking statements can be
identified by the use of predictive, future-tense or forward-looking
terminology, such as "believes," "anticipates," "expects," "estimates,"
"plans," "may," "will," or similar terms. These statements appear in a
number of places in this Registration and include statements regarding
the intent, belief or current expectations of the Company, its directors
or its officers with respect to, among other things: (i) trends affecting
the Company's financial condition or results of operations for its limited
history; (ii) the Company's business and growth strategies; (iii) the
Company's ability to find customers for its products; and, (iv) the
Company's financing plans. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and
involve significant risks and uncertainties, and that actual results may
differ materially from those projected in the forward-looking statements
as a result of various factors. Factors that could adversely affect actual
results and performance include, among others, the Company's operating history,
dependence on identifying markets and customers for its products, potential
fluctuations in quarterly operating results and expenses, future government
regulation, technological change and competition.
The accompanying information contained in this Registration, including,
without limitation, the information set forth under the heading "Risk
Factors," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business" identifies important additional
factor that could materially adversely affect actual results and performance.
All of these factors should be carefully considered and evaluated. All
forward-looking statements attributable to the Company are expressly
qualified in their entirety by the foregoing cautionary statement. Any
forward-looking statements in this report should be evaluated in light of
these important risk factors. The Company is also subject to other risks
detailed herein or set forth from time to time in the Company's filings with
the Securities and Exchange Commission.
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Part I ......................................................... 4
Item 1. Description of Business.................................. 4
Item 2. Management's Discussion and Analysis or Plan of
Operation................................................ 15
Item 3. Description of Property.................................. 16
Item 4. Security Ownership of Management and Others and Certain
Security Holders......................................... 17
Item 5. Directors, Executives, Officers and Significant
Employees................................................ 18
Item 6. Remuneration of Directors and Executive
Officers................................................. 20
Item 7. Certain Relationships and Related Transactions........... 20
Part II ......................................................... 21
Item 1. Market Price of and Dividends of the Registrant's
Common Equity and Other Stockholder Matters.............. 21
Item 2. Legal Proceedings........................................ 22
Item 3. Recent Sales of Unregistered Securities.................. 23
Item 4. Description of Securities................................ 23
Item 5. Indemnification of Directors and Officers................ 25
Part F/S ......................................................... 27
Item 1. Financial Statements..................................... 27
Item 2. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure..................... 28
Part III ........................................................ 29
Item 1. Index to Exhibits....................................... 29
Item 2. Description of Exhibits................................. 29
The following Registration statement is qualified in its entirety by,
and should be read in conjunction with, the more detailed information
and the Financial Statements and Notes related thereto appearing
elsewhere in this Registration. Except where the context otherwise
requires, all references in this Registration to (a) the ("Registrant")
or ThermaFreeze(R), the ("Company") a Delaware corporation, (b) ("THFZ")
refers to the Company.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
A. Business Development, Organization and Acquisition Activities
ThermaFreeze, Incorporated, the ("Company") or ("THFZ") was formed in
Delaware in May 1994, as Baseball Properties, Inc., a publicly held Delaware
Corporation. The original ThermaFreeze(R), Inc. was formed in Nevada in
March, 1995, and acquired by Baseball Properties, Inc. The acquisition
became operationally effective in January of 1997. At the conclusion of
the ThermaFreeze (Delaware - formerly Baseball Properties, Inc.) acquisition
of ThermaFreeze (Nevada) the combined Shareholders totaled 1,376 with
7,041,971 issued and outstanding shares as of May 15, 1997.
The Company is a Development Stage Company with no history of profitable
operations, financed by several existing shareholders. ThermaFreeze(R) was
formed to further develop, manufacture and market a diverse, state of the
art product line for the packaging and shipping of temperature sensitive
products. Applications include such products included but not limited to
the shipping of whole blood, plasma and human organs, to food products of
all types, flowers and pharmaceuticals.
The Company has the authority to issue 10,000,000 Shares of Preferred Stock
at $.001 par value, 5,000,000 Preferred Shares are presently issued and
outstanding; and, the Company has the authority to issue 40,000,000 Shares
of Common Stock at $.001 par value, of which 22,511,522 of which are
presently issued and outstanding. The Company's shares are traded on
OTC-BB. The symbol is THFZ.
Approximately 22,511,522 shares of the Company's Common Stock, $.001 par
value are presently issued outstanding, the Company issued 5,000,000 of its
Convertible Preferred Shares to Thermal Products, Inc., an unaffiliated
Nevada Corporation, in exchange for: (a) The exclusive use and lease for
North America of Thermal Products, Inc. ThermaFreeze(R) production
machine and license rights to all future ThermaFreeze(R) production and
process machines. The Company will also participate in all worldwide
License agreements. Thermal Products, Inc. has expensed over $750,000
to date on design, development and building this advanced design, computer
controlled, semi-automatic ThermaFreeze (R) Production Machine; (b) The
exclusive use and lease for North America of the Thermal Products, Inc.
Hydration Freezing Processing Machine, presently under development. Thermal
Products, Inc. has expensed over $200,000 to date on research, development
and design of the proprietary Hydration Freezing Processing Machine.
1) Principal Products, Services and Principal Markets.
(a) Operating History
The Company was formed in Delaware in May 1994, as Baseball Properties,
Inc., a publicly held Delaware Corporation. The original ThermaFreeze(R),
Inc. was formed in Nevada in March, 1995, and acquired by Baseball
Properties, Inc. The acquisition became operationally effective in
January of 1997. The Company is a Development Stage Company with no
history of profitable operations, financed by several existing shareholders.
ThermaFreeze (R) was formed to further develop, manufacture and
market a diverse, state of the art product line for the packaging
and shipping of temperature sensitive products. Accordingly, the Company
has a limited operating history upon which an evaluation of the Company,
its current business and its prospects can be based, each of which must be
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considered in light of the risks, expenses and problems frequently encountered
by all companies in the early stages of development, and particularly by
such companies entering developing market with a new product concept. The
Company's prospects must be considered in light of the risks, uncertainties,
expenses and difficulties frequently encountered by companies in their
early stages of development, particularly companies with a new product
concept. Such risks include, without limitation, the lack of broad
acceptance of the company's products, the possibility that the Company
will fail to achieve broad acceptance, the inability of the Company to
generate significant revenues from its customers, the company's inability to
anticipate and adapt to a developing market, including the amount and timing
of capital expenditures and other costs relating to the expansion of the
company's operations, the introduction and development of different or more
extensive solutions by direct and indirect competitors of the Company,
including those with greater financial, technical and marketing resources, the
inability of the Company to find markets for its products, the inability of
the Company to attract, retain and motivate qualified personnel and general
economic conditions.
(b) Description of The Business
ThermaFreeze(R) was formed to develop, manufacture and market a diverse,
product line for the packaging and shipping of temperature sensitive products.
Any product being shipped, whether food, medical or pharmaceutical, must be
maintained within certain temperature parameters determined by the producer.
To maintain those parameters in the most cost effective manner is the mission
of all shipping companies and packaging engineers. Toward this end, the
Company has designed a group of thermal protection products that may be used
individually or together as a system. The products prevent heat from entering
or exiting a given receptacle whether it is the box or pouch within the
container or the container itself.
(c) Company Products
ThermaFreeze(R) provides a versatile product, that contains a non-toxic
refrigerant, that when hydrated and frozen or hydrated and heated, can
maintain the desired temperature range for extended periods of time.
ThermaBarrier(R) is designed to protect against solar radiation, that is,
heat transferred through radiated energy. This film material when properly
applied reflects radiated heat and protects the cargo both from the intrusion
and extrusion of heat.
ThermaPack(R) is the Company's prototype container whose construction and
design will protect against all types of heat sources. Further, it can be
specifically prepared and lined with a combination of the Company's products
to achieve specific temperature conditions.
ThermaFreeze(R) product line controls heat attack from conduction, radiation
or convection. ThermaFreeze(R) is a non-toxic refrigerant produced from a
proprietary formula of plastic film, non-woven fabrics and special polymers,
which when hydrated and frozen, is capable of maintaining cold temperatures
during transit or if hydrated and heated, of maintaining a warm temperature in
transit.
(d) Developing and Changing Market
Present packing and shipping methods in the medical, pharmaceutical and
food-processing industries are well established. The Company believes its
comprehensive system can offer these customers a different and innovative
from both a cost-effective and product protection, approach to ship product.
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Management believes the Company's line of ThermaFreeze products can provide
the dual benefits of lower shipping costs combined with minimal spoilage
rates. By replacing the present freezing media, wet or dry ice or gel blocks
packed in insulated containers with ThermaFreeze's total shipping weight and
related shipping costs will be reduced, sometimes substantially. Management
believes the efficiency of the Company's products will reduce or in many cases
eliminate spoilage during transit.
The packaging industry has not developed any innovative products or
technologies that address the specialized needs of many of its clients.
The profusion and variety of items being transported require new methods
and concepts that have not been forthcoming. Wet or dry ice or frozen gel
blocks have, in one form or another, been the basis of temperature
sensitive shipping for the past 50 years. When packed in insulated containers,
usually Styrofoam lined, the product is ready to be shipped. A typical example
might involve a pharmaceutical company shipping a two-pound payload plus two
pounds of frozen gel blocks packaged in a 14-pound box. The cost required
to deliver 18 pounds of payload, container and gel is almost twice the cost
of the Company's system in the same application. Assuming the pharmaceutical
company ships 10,000 of these containers each month, the Company's system
will make a dramatic impact on current packaging and shipping methods.
The ThermaFreeze(R) family of refrigerants and containers when used together,
might offer a more cost-effective shipping medium than any present packaging
and shipping media by reducing overall shipping weight and product
deterioration. Management believes the packaging industry has been slow
to address the need for lighter, more efficient thermal protection. The
Company hopes large shippers might embrace any product that can increase
efficiency and reduce costs. The techniques and designs of the Company's
products and production equipment are subject either to exclusive licenses
or will be the subjects of patent applications to be filed with respect to
chemical formulations and manufacturing processes and designs. The inability
to attract and retain customers for its products could have a material
adverse effect upon the Company's business, results of operations and
financial condition.
(e) Product Composition and Manufacture
The Company's refrigerant product line is produced in long, continuous,
ribbon-like strips and delivered to the users for hydration and freezing or
hydration and heating depending on the specific usage. The essential
structure involves a thin plastic film layer, non-woven fabric and an
assortment of special polymers and chemical additives. All of the requisite
materials needed for the product production are readily available from
several sources.
The manufacturing techniques as well as the combination of chemicals and the
design of the various products are proprietary to the Company. Several of the
designs and processes may be the subject of patent applications.
(f) Market Segments and Potential Applications
The Company has identified and intends to concentrate its marketing and
product development efforts in several specific market segments and industries.
i) Pharmaceutical Application
Human and animal vaccines and serums must be shipped in temperature controlled
conditions within the specific parameters mandated by the manufacturers. Any
material deviation may negatively impact their effectiveness or in some cases
actually cause additional harm. The Company's ThermaBarrier(R) and
ThermaFreeze(R), depending on the specific transit conditions required, are
provides a shipping alternative for this market.
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ii) Clinical Laboratory Applications
As medical procedures become more sophisticated, there is an increasing demand
for human organs as well as human and animal blood and tissue samples. In
many instances, transport is required from acquisition site, to usage site
while maintaining the shipments specified temperature range critical to the
overall efficacy of the treatment or the procedure. The Company's products
can provide the necessary thermal protection as may be required.
iii) Medical Applications
ThermaFreeze(R) is suited for topical application as either a hot or cold
compress. General medical uses, physical therapy and orthopedic situations
often require heat and cold to be applied immediately upon injury or in
continuing treatment. Hospitals and clinics can maintain a supply of frozen
ThermaFreeze(R) for immediate use. Dry ThermaFreeze(R) can be, within two
minutes, hydrated in cold water for use as a cool compress while hydrated
ThermaFreeze(R) can be heated, within two minutes, in a microwave, for use
as a hot compress.
ThermaSorb(R) is in development and has a variety of potential medical
applications now under consideration from bed liners to lining surgical
bio-waste receptacles in operating or emergency rooms. All of the Company's
products may be incinerated without negative environmental effect.
iv) Food Processing and Shipping Applications
Foods to be transported, where temperature maintenance is a factor, are
candidates for the Company's products. As discussed, ThermaFreeze(R) can
be used to maintain product in a frozen state, an extremely warm state or
in any reasonable temperature range within such extremes. Accordingly,
fish, poultry, red meat, fruits, vegetables, juices, dairy products and
candy are likely products for the Company.
The ThermaBarrier(R) radiant barrier can also be used during the actual
production process in meat and poultry facilities. Often, trolley loads
of processed meat and poultry are left for short periods either during
shift changes or breaks or simply awaiting the next step in the processing
or packaging process. A ThermaBarrier (R) cover placed over the trolley
will, for short periods, maintain acceptable product temperature conditions.
Another related use for the ThermaBarrier(R) cover is to protect frozen
foods on pallets on a dock awaiting loading onto a refrigerated truck.
While on the loading dock, the lowest tiers of frozen product are exposed
to heat arising either from the dock or from the truck, if it is not yet
fully refrigerated. The ThermaBarrier(R) cover and base will protect the
lower portions of the frozen product from radiant energy being released
from the dock into the bottom of the pallet. ThermaBarrier(R) will do the
same when the pallet is loaded into a relatively warm truck before it is
totally refrigerated. The use of the ThermaBarrier(R) cover can be
optimized when combined with a ThermaFreeze(R) blanket. The ThermaFreeze(R)
blanket, covering the load, works together with the frozen food, to maintain
freezing temperatures in the load. ThermaFreeze(R) and ThermaBarrier(R) act
as a system to create a portable refrigerator to protect frozen product.
v) Other Applications
The Company's products have been tested and demonstrated as effective in
the packaging and shipping of chocolate or chocolate related products.
While cold may not necessarily spoil the chocolate, it does produce a
white, powdery substance bloom on the outer surface making it difficult
to display or otherwise merchandise the product. ThermaFreeze(R) and
ThermaBarrier(R) have provided the necessary protection to permit the
shipping of chocolate during summer heat without the appearance of the
white "bloom" on the surface.
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Also, the shipment of flowers and similar perishables, have been
accomplished without spoilage when utilizing the combination of
ThermaFreeze(R) and ThermaBarrier(R).
(g) Potential Cost Savings:
The Company believes its group of products can be adapted to fit the
needs of most customers while offering a savings in shipping costs and
reducing the rate of spoilage or product deterioration.
The Company has accumulated data from solicitation of potential customers
and overall knowledge of packaging and shipping costs. The following is
anecdotal representative example of savings that can be realized by the
Company's products.
A large producer of organic herbs ships 1,600 boxes of herbs each week by
using 9 gel blocks per box, with a total weight of 13.5 pounds. An equivalent
amount of ThermaFreeze(R) has a total weight of 8.5 pounds providing total
savings of five pounds per box or 8,400 pounds per week or 436,800 pounds
per year. Annual freight savings calculated conservatively would equal
$109,000. These types of percentage savings represent the financial benefits
that might be realized by the Company's customers.
(h) ThermaFreeze Production Machine
An advanced ThermaFreeze(R) production machine has been completed by Thermal
Products, Inc., a non-affiliated third party. It significantly improves
production capacity, efficiency and finished goods quality. The Company has
exclusive lease rights for North America United States with worldwide Joint
Venture participation. A patent was granted in 1996.
This machine's design utilizes a process control and reporting system. The
hardware design is open, permitting easy maintenance of components and heavy
part replacement, if necessary. An on-board hoist and an air compressor are
included to make the machine almost completely self-contained. It can be
disassembled into four major systems and packed into a 20-foot container.
With the proper electrical components, the machine can be unpacked, set up
and in operation within five (5) working days, anywhere in the world.
(i) The Hydration Freezing Machine
The Hydration Freezing machine is a computer-controlled unit of stainless
steel and aluminum. It consists of freezing units, hydration chambers
where material is wetted, a water filtration system, heating and cooling
coils, storage tanks and a high speed defrosting system.
The machine has been design engineered by Thermal Products, Inc. It will
be built and financed by an unaffiliated third party. The Company estimates
the actual construction costs should be between $250,000-$300,000 and would
require from 3-6 months to complete the design and construction.
Management believes the importance of the Hydration Freezing machine is
twofold. First, it will enable the Company to process ThermaFreeze(R) for
active temperature sensitive applications to eliminate the necessity for
each client to hydrate and freeze or hydrate and heat the product before
use. The Company anticipates that ThermaFreeze(R) processed in the Hydration
freezing machine will be of more uniform quality than processed on an
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individual basis by each user. Secondly, and most importantly, the Company
has developed a marketing strategy called "Just-in-Time" which contemplates
delivery and installation of the machine to high volume users. The Company
will be paid only for the frozen ThermaFreeze(R) produced by the machine and
for any of its related labor costs. Any additional output by the machine
not used by the customer can be sold to others in the area and the Company and
its principal customer will share in these proceeds.
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The Company anticipates the location of the Hydration Freezing machine on
site will provide a hassle-free answer to its major customers' packaging
and shipping problems. The user will no longer have to purchase, handle, or
freeze gel blocks or hazardous dry ice. Discussions with potential large
users have been extremely positive and the Company hopes ultimately to place
machines in the facilities of volume users throughout the country to service
their needs as well as other customers in the area.
(j) Competition and Markets
The Registrant is at a competitive disadvantage with some other firms and
individuals that have greater financial resources and larger technical
staffs than the Registrant. In addition, in recent years a number of small
companies have been formed which have objectives similar to those of the
Registrant and which present substantial competition to the Registrant.
The Company is entering a marketplace where new products, technology and
innovation are just emerging. Essentially, the market is controlled by
the use of wet ice, dry ice and gel blocks packed in a Styrofoam insert
and foam lined shipping boxes. The packaging market is familiar with
the use, performance, and limitations of these products and large
manufacturers and shippers have sizable inventories of these products.
Despite these factors, the Company hopes it can provide cost-effective
benefits of its packaging system, in that it will outweigh any rationale
for the continued use of the present shipping media. Management is presently
aware of only four direct competitors who offer a thermal product similar to
ThermaFreeze(R).
i) Dynetherm, Inc., Division of Weyerhaeuser, Inc., Theodore, AL.
They sell a product line essentially the same as ThermaFreeze(R), Inc.
ii) Techni-Ice (Australia). Producing a refrigerant pad sold in the U.S.
iii) Sealed Air Australia. Sealed Air Corporation acquired the assets of
Thermarite Pty. Ltd. in 1996. This is another similar product to the
ThermaFreeze produce.
iv) Maxwell Chase (Atlanta, Georgia)
(k) Sales and Marketing
The Company has contacted major potential users in its target industries,
pharmaceuticals, medical and food processing. Some of this potential
users have already either used or tested the Company's products.
The Company plans to conduct the bulk of its early sales efforts through
the use of manufacturers representatives. This method of selling will allow
the Company personnel to establish personal contact with the end users of its
products. The Company plans to retain all billing responsibilities and thereby
maintain control of customer pricing, market conditions and trends. If its
business develops, the Company may choose to appoint exclusive and or
non-exclusive distributors to service specific markets. No Sales Contracts
or Suppliers Contracts have been issued at this time.
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(l) Other Products
Management is considering other growth opportunities and potential acquisitions
of businesses and/or the acquisition of exclusive proprietary rights in
consumer/commercial products similar or complementary to that of the Company,
but there can be no assurance that such opportunities will arise or will be
profitable to the Company. The pursuit of any such growth opportunities will
require a significant investment of funds and management attention. Any such
growth opportunities will be subject to all of the risks inherent in the
establishment of a new product or service, including competition, lack of
sufficient customer demand, unavailability of experienced management,
unforeseen complications, delays and cost increases. The Company may incur
costs in connection with pursuing new growth opportunities that it cannot
recover, and the Company may be required to expense certain of these
costs, which may negatively impact the Company's reported operating
performance for the periods during which such costs are incurred. Please
refer to "Forward-Looking Statements and Cautionary Notice Regarding Forward
Looking Statements."
2) Raw Materials and Suppliers
The Company obtains its raw materials and supplies from many different sources
and is not dependent on any single source.
3) Customers
The Company believes that establishing and maintaining brand identity is a
critical aspect of its efforts to attract new customers. In order to attract
new customers, advertisers and commerce vendors, and in response to competitive
pressures, the Company intends to make a commitment to the creation and
maintenance of brand loyalty among these groups. The Company plans to
accomplish this, although not exclusively, through targeted customer marketing
and promotional efforts.
There can be no assurance that brand promotion activities will yield
increased revenues or that any such revenues would offset the expenses
incurred by the Company in building its brands. Further, there can be no
assurance that any new users will continue to purchase the ThermaFreeze
product on a regular basis. If the Company fails to promote and maintain
its brand or incurs substantial expenses in an attempt to promote and
maintain its brand or if the Company's existing or future strategic
relationships fail to promote the Company's brand or increase brand awareness,
the Company's business, results of operations and financial condition would
be materially adversely affected.
4) Potential Fluctuations in Operating Results; Quarterly Fluctuations
The Company's operating results may fluctuate significantly in the future
as a result of a variety of factors, many of which are outside the Company's
control. As a strategic response to changes in the competitive environment,
the Company may from time to time make certain pricing, marketing decisions
or acquisitions that could have a material short-term or long-term adverse
effect on the Company's business, results of operations and financial
condition.
There can be no assurance that such patterns will not have a material adverse
effect on the Company's business, results of operations and financial
condition. There can be no assurance that the Company will receive any
material amount of revenue under these agreements in the future. The foregoing
factors, in some future quarters, may lead the Company's operating results to
fall below the expectations.
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5) Risks Associated With New Services, Features and Functions
There can be no assurance that the Company would be able to expand its
operations in a cost-effective or timely manner or that any such efforts
would maintain or increase overall market acceptance. Furthermore, any new
business launched by the Company that is not favorably received by consumers
could damage the Company's reputation and diminish the value of its brand
name. Expansion of the Company's operations in this manner would also
require significant additional expenses and development, operations train the
Company's management, financial and operational resources. The lack of
market acceptance of the Company's products would result in the Company's
inability to generate satisfactory revenues and its inability to offset their
costs could have a material adverse effect on the Company's business, results
of operations and financial condition.
6) Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company would acquire
businesses, technologies, services or product(s) that the Company believes
are strategic.
The process of integrating an acquired business, technology, service or
product(s) into the Company may result in unforeseen operating difficulties
and expenditures and may absorb significant management attention that would
otherwise be available for ongoing development of the Company's business.
Moreover, there can be no assurance that the anticipated benefits of any
acquisition will be realized. Future acquisitions could result in potentially
dilutive issuances of equity securities, the incurrence of debt, contingent
liabilities and/or amortization expenses related to goodwill and other
intangible assets, which could materially adversely affect the Company's
business, results of operations and financial condition. Any future
acquisitions of other businesses, technologies, services or product(s) might
require the Company to obtain additional equity or debt financing, which might
not be available on terms favorable to the Company, or at all, and such
financing, if available, might be dilutive.
7) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements, or Labor Contracts
The Company entered into a licensing agreement with Thermal Products, Inc.,
to license a patented and trademark product(s), which represents the Company's
primary product. (See "Exhibit 10.2 -- Material Contracts")
The Company regards substantial elements of its underlying infrastructure
and technology as proprietary and attempts to protect them by relying on
trademark, service mark, copyright and trade secret laws and restrictions
on disclosure and transferring title and other methods. The Company plans
to enter into confidentiality agreements with its future employees, future
suppliers and future consultants and in connection with its license agreements
with third parties and generally seeks to control access to and distribution
of its technology, documentation and other proprietary information. Despite
these precautions, it may be possible for a third party to copy or otherwise
obtain and use the Company's proprietary information without authorization
or to develop similar technology independently.
Any claims and any resultant litigation, should it occur, might subject the
Company to significant liability for damages, might result in invalidation
of the Company's proprietary rights and, even if not meritorious, could
result in substantial costs and diversion of resources and management
attention and could have a material adverse effect on the Company's business,
results of operations and financial condition.
The Company bears certain risks in purchasing parallel marketed goods which
includes certain products. Parallel-marketed goods are products to which
trademarks are legitimately applied but which were not necessarily
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intended by their foreign manufacturers to be imported and sold in the
United States. The laws and regulations governing transactions involving
such goods lack clarity in significant respects. From time to time, trademark
or copyright holders and their licensees initiate private suits or
administrative agency proceedings seeking damages or injunctive relief based
on alleged trademark or copyright infringement by purchasers and sellers of
parallel-marketed goods. While the Company believes that its practices and
procedures with respect to the purchase of goods lessen the risk
of significant litigation or liability, the Company from time to time may
be involved in such proceedings and there can be no assurance that claims or
suits will not be initiated against the Company or any of its affiliates, and
there can be no assurances regarding the results of any pending or future
claims or suits. Further, legislation has been introduced in Congress from
time to time regarding parallel marketed goods. Certain legislative or
regulatory proposals, if enacted, could materially limit the Company's ability
to sell parallel marketed goods in the United States. There can be
no assurances as to whether or when any such proposals might be acted
upon by Congress or that future judicial, legislative or administrative
agency action will restrict or eliminate these sources of supply. Please
refer "Forward-Looking Statements and Cautionary Notice Regarding Forward
Looking Statements."
8) Regulation
The Company's operations are affected by numerous federal and state laws that
impose disclosure and other requirements upon the origination, servicing and
enforcement of credit accounts and limitations on the maximum amount of
finance charges that may be charged by a credit provider. Any change in the
regulation of credit which would materially limit the availability of credit
to the Company's traditional customer base could adversely affect the Company's
results of operations or financial condition. Please refer "Forward-Looking
Statements and Cautionary Notice Regarding Forward Looking Statements."
9) Effect of Existing or Probable Government Regulations
Any new legislation or regulation, or the application of laws or regulations
from jurisdictions whose laws do not currently apply to the Company's
business, for third-party activities and jurisdiction. The adoption of
new laws or the application of existing laws may decrease the demand for
the Company's products, which could increase the Company's cost of doing
business or otherwise have a material adverse effect on the Company's
business, results of operations and financial condition. There can be no
assurance, however, that State government will not attempt to impose these
regulations upon the Company in the future or that such imposition will not
have a material adverse effect on the Company's business, results of operations
and financial condition.
10) Research and Development Activities
The Company, among other things, plans to develop and market its
ThermaFreeze(R) brand product, implement and execute its business and marketing
strategy successfully, continue to develop and upgrade its technology and
information-processing systems, meet the needs of a changing market,
provide customer service, respond to competitive developments and attract,
integrate, and motivate qualified personnel provided the company can generate
sales and profit.
As is typical of any new and rapidly evolving market, demand and market
acceptance for recently introduced products are subject to a high level
of uncertainty and risk. Moreover, because this market is new and rapidly
evolving, it is difficult to predict its future growth rate, if any,
and its ultimate size. If the market fails to develop, develops more
slowly than expected or becomes saturated with competitors, or if the
Company's products do not achieve or sustain market acceptance, the
Company's business, results of operation may be materially and adversely
affected.
12
<PAGE>
There can be no assurances the Company will be successful in accomplishing
any or all of its plans, and the failure to do so could have a material
adverse effect on the company's business, results of operations and
financial condition.
11) Impact of Environmental Laws
The Company is not aware of any federal, state or local environmental
laws which would effect its other operations.
12) Employees
The Company currently has three (3) who are Officers of the Company. As
the Company begins to develop its markets it will need to add employees.
(i) The Company's performance is substantially dependent on the performance
of its Chairman and President, Joseph Murray. In particular, the Company's
success depends on his ability to identify, develop and market the company's
products.
(ii) The Company does not carry key person life insurance on any of its
personnel. The loss of the services of any of its executive officers or
other key employees could have a material adverse effect on the business,
results of operations and financial condition of the Company. The Company's
future success also depends on its ability to retain and attract highly
qualified technical and managerial personnel.
(iii) There can be no assurance that the Company will be able to retain
its key managerial and technical personnel or that it will be able to attract
and retain additional highly qualified technical and managerial personnel in
the future. The inability to attract and retain the technical and
managerial personnel necessary to support the growth of the Company's business,
due to, among other things, a large increase in the wages demanded by such
personnel, could have a material adverse effect upon the Company's business,
results of operations and financial condition.
13) The Industry & Potential Effect on the Company's Plan of Operations
As potential markets grow and countries from the most industrialized to
those struggling to emerge from third world status seek to build viable
foreign markets for their exports, the Company's line of products and
services are positioned to help effect changes in packaging and delivery.
It is as commonplace for the vital human organs or vaccines to be transported
around the globe to save life and limb or prevent the spread of a deadly
virus as it is to transport California tomatoes to New York City. In all
cases, however, the shipping medium holds the key to efficient, cost-effective
delivery of an innumerable number of perishable products.
There is an increasing demand for temperature-controlled packaging from such
major industrial segments as the medical, pharmaceutical and food processing
industries. The diversity of products delivered requires more sophisticated
treatment than just maintaining a cargo in a frozen state. Certain items must
be maintained within a certain temperature range, above freezing. Conversely,
there are other cargoes (flowers, live animals and fish) that require warmth
but not heat. In all cases, the Company's comprehensive and scientific
approach to packing, packaging and shipping provides a state of the art system
to accomplish these goals.
13
<PAGE>
The Company plans to market its products through the retail channels of
distribution, utilizing contract sales representatives. Failure by the Company
to adapt to changing market conditions or identify productive contract
sales representatives could have a material adverse effect on the Company's
business, results of operations and financial condition.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
All statements, trend analysis and other information contained in this
Registration relative to markets for the Company's products and trends in
revenues, gross margin and anticipated expense levels, as well as other
statements including words such as "believe," "anticipate," "expect,"
"estimate," "plan" and "intend" and other similar expressions, constitute
forward-looking statements. Those forward-looking statements are subject
to business and economic risks, and the Company's actual results of
operations may differ from those contained in the forward-looking statements.
The following discussion of the financial condition and results of
Operations of the Company should also be read in conjunction with the
Financial Statements and Notes related thereto included elsewhere in this
Registration.
14
<PAGE>
ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
A. Management's Plan of Operation
1) During calendar year ended December 31, 1999 the Company incurred a
net loss of $296,799 from operations against revenues of $238,039 as
compared to a net loss from operations of $497,161 against revenues of
$12,501 for calendar year ending December 31, 1998. The largest expenses
the company incurs is in research and development. In 1999, the Company
spent $262,516 in research and development as compared to $208,310 in
calendar year 1998. The Company's second largest expense comes from
general and administrative expenses. During calendar year 1999, the
company spent $175,502 in general and administrative expenses as compared
to $586,665 in the previous year. The Company was able to reduce its
general and administrative expenses, once it established its base of
operations.
As of December 31, 1999, the Company has twenty-two million five hundred
Eleven thousand and five hundred twenty-two (22,511,522) shares of its
$0.001 par value common voting stock issued and outstanding which are held
by approximately one thousand seven hundred and seventy (1,770) shareholders
of record. The Company also has five million (5,000,000) shares of its $0.001
par value Convertible Preferred Stock issued and outstanding, as of December
31, 1999. All Preferred shares which were issued for cash at $0.001 a share.
During the year ended December 31, 1997, the Company issued 22,511,522 shares
of its $0.001 par value common stock for cash and services pursuant to a
private placement offering. There are currently 1,770 shareholders.
During the year ended December 31, 1998, $629,336.00 of donated capital was
received in the form of cash and services, and is recorded as additional
paid-in capital. During the year ended December 31, 1999, $223,748.00 of
donated capital was received in the form of cash and services, and is recorded
as additional paid-in capital.
The Company currently anticipates that it has enough available funds to
meet its anticipated needs for working capital, capital expenditures and
business expansion for the next 12 months. The Company expects that it will
continue to experience a small operating cash flow for the foreseeable future
as a result of significant new product development, advertising and
infrastructure.
As an On Going concern, if the Company needs to raise additional funds in
order to fund expansion, develop new or enhanced services or products,
respond to competitive pressures or acquire complementary products,
businesses or technologies, any additional funds raised through the issuance
of equity or convertible debt securities, the percentage ownership of the
stockholders of the Company will be reduced, stockholders may experience
additional dilution and such securities may have rights, preferences or
privileges senior to those of the Company's Common Stock. The Company
does not currently have any contractual restrictions on its ability to
incur debt and, accordingly, the Company could incur significant amounts
of indebtedness to finance its operations. Any such indebtedness could
contain covenants which would restrict the Company's operations. There
can be no assurance that additional financing will be available on terms
favorable to the Company, or at all. If adequate funds are not available
or are not available on acceptable terms, the Company may not be able to
continue in business, or to a lessor extent not be able to take advantage
of acquisition opportunities, develop or enhance services or products or
respond to competitive pressures.
15
<PAGE>
2) No engineering, management or similar report has been prepared or
provided for external use by the Company in connection with the offer of
its securities to the public.
3) Management believes that the Company's future growth and success will
depend on its ability to find customers for its products. The Company
expects to continually evaluate its potential products to determine what
additional products or enhancements are required by the marketplace. The
Company does not plan to develop products internally, but find suppliers
and businesses who would be willing to sell, market or license their
products/business through the Company. This can help avoid the time and
expense involved in developing actual products.
B. Segment Data
As of December 31, 1999, the Company generated $212,952 in revenues
as compared to $74,206, for calendar year ending December 31, 1998.
Accordingly, the Statement of Operations expresses the financial information
as consolidated and no table showing percentage breakdown of revenue by
business segment or product line is included.
ITEM 3. DESCRIPTION OF PROPERTY
A. Description of Property
The address of the principal office is: 4430 Haskell Avenue, Encino, CA
91436. Approximately 3,500 square feet is rented on a month to month
occupancy basis in Encino, California for Sales and Administration. A
lease arrangement is available on the present arrangement. The company rents
administrative offices from Sheila McGuire, a shareholder of the Company.
The Company leases manufacturing space approximately 9,500 square
feet of in Mobile, Alabama. The factory site address is 776
Lakeside Dr., Mobile, AL 36693. The Factory is located on a lot as
a stand alone structure; 3,270 sq. ft. is occupied by office
space, 6,380 square feet is occupied by manufacturing. The Company owns
no real estate and rents all of its equipment.
Management believes that this is currently suitable for the Company's
needs for the next twenty-four (24) months.
16
<PAGE>
ITEM 4. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
A. Security Ownership of Management and Certain Beneficial Owners
The following table sets forth information as of the date of this
Registration Statement certain information with respect to the beneficial
ownership of the Common Stock of the Company concerning stock ownership
by (i) each director, (ii) each executive officer, (iii) the directors and
officers of the Company as a group, (iv) and each person known by the
Company to own beneficially more than five (5%) of the Common Stock.
Unless otherwise indicated, the owners have sole voting and investment
power with respect to their respective shares.
<PAGE>
<TABLE>
<CAPTION>
Title Name & Address Amount of Percent
of of Beneficial shares of
Class Owner of Shares Position held by Owner Class
- ------ --------------- -------- ------------- -------
<S> <C> <C> <C> <C>
Common Joseph C. Murray(1)(2) Chairman/CEO 1,000,000 4.44%
Common Thomas Pryor(1)(2) CFO None 0.00%
Common Lyman Gaude(1)(2) COO 500,000 2.22%
Common Thermal Products, Inc. 4,050,000 17.99%
Preferred Thermal Products, Inc. 5,000,000 100.00%
- ---------------------------------------------------------------------------
All Executive Officers and
Directors as a Group (3 persons) Common: 5,550,000 24.65%
Preferred: 5,000,000 100.00%
</TABLE>
(1) Company address for all Officers is c/o ThermaFreeze, Inc. 4430 Haskell
Avenue, Encino, CA 91436
(2) Note: All Common shares listed in the above Table were acquired
by said Officers on November 11, 1996.
<PAGE>
B. Persons Sharing Ownership of Control of Shares
No person owns or shares the power to vote ten percent (10%) or more of
the Company's securities.
C. Non-voting Securities and Principal Holders Thereof
The Company has not issued any non-voting securities.
D. Options, Warrants and Rights
During the year ended December 31, 1999, 408,342 warrant units were issued.
Each warrant unit contains 100,000 shares of restricted common stock and
33,334 warrants to purchase 33,334 shares of common stock at $.15 per share
exercisable for a 2-year period from the purchase date.
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<PAGE>
E. Parents of Issuer
Under the definition of parent, as including any person or business entity
who controls substantially all (more than 80%) of the issuers of common
stock, the Company has no parents.
F. Other
Not applicable.
ITEM 5. DIRECTORS, EXECUTIVES, OFFICERS AND SIGNIFICANT EMPLOYEES
The names, ages and positions of the Company's directors and executive
officers are as follows:
<TABLE>
<CAPTION>
Name Age Position
- -------- ------ ----------
<S> <C> <C>
Joseph C. Murray 62 Chairman and CEO
Thomas Pryor 82 Chief Financial Officer
& Director
Lyman Gaude 58 Chief Operations Officer
& Director
</TABLE>
B. Family relationships
None - not applicable.
C. Work Experience
Joseph C. Murray, Director, was appointed Chairman and Chief Executive Officer
in 1996. Prior to his appointment, Mr. Murray functioned as Strategic Planning
Consultant and Director of Operations for the Company. From 1993 to 1995, Mr.
Murray was involved in pre-incorporation research and development for
ThermaFreeze. Previously, Mr. Murray led an engineering unit of Schwitzer
Household International Inc. from 1977 to 1985. During his tenure revenues
increased more than 200% to over $10 Million with corresponding increases
in profitability. He led all activities in the Americas for Homes, LTD, a
unit of Pullman, Inc. based in Huddersfield, England from 1986 through 1989.
During the period of 1990 through 1993, Mr. Murray served as a consultant to
small business development organizations backed by Indiana and Purdue
Universities and consulted with state level economic development agencies
in Indiana. Mr. Murray received a Degree in Liberal Arts at Boston College.
Thomas Pryor, CPA has been Chief Financial Officer and Director since the
company's inception, March 1995. Following a public accounting career,
Mr. Pryor became President and Co-Founder of Computer Data Corporation in
1964. The success of this company evolved into the 1978 founding of Computer
Data Information Systems (CDIS). CDIS was a software development company
providing total on-line integrated processing for large scale computer systems
used primarily by the Fortune 1000 companies. CDIS was sold to NYNEX in 1989.
Mr. Pryor received a Bachelor of Science Degree from Missouri University in
1938 and obtained a Degree in Computer Sciences form UCLA in postgraduate
study.
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<PAGE>
Lyman Gaude was appointed Chief Operations Officer and Director of the
Company in 1996. For 21 years, Mr. Gaude served in the military in varied
staff and technical positions and retired in 1981. He has owned and operated
his own business since 1990. In 1989, Mr. Gaude was a Co-Founder of a company
that designed packaging systems. During a three-year tenure, Mr. Guade held
the position of Vice President for Operations. Lyman E.D. Gaude received a
Bachelor of Arts Degree at South eastern Louisiana University.
D. Involvement on Certain Material Legal Proceedings During the Last Five
Years
(1) No director, officer, significant employee or consultant has been
convicted in a criminal proceeding, exclusive of traffic violations.
(2) No bankruptcy petitions have been filed by or against any business or
property of any director, officer, significant employee or consultant
of the Company nor has any bankruptcy petition been filed against a
partnership or business association where these persons were general
partners or executive officers.
(3) No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise
limited from involvement in any type of business, securities or banking
activities.
(4) No director, officer or significant employee has been convicted of
violating a federal or state securities or commodities law.
E. Conflicts of Interest
The officers and directors of the Company may in the future become
shareholders, officers or directors of other companies which may be engaged
in business activities similar to those conducted by the Company. Accordingly,
additional direct conflicts of interest may arise in the future with respect
to such individuals acting on behalf of the Company or other entities.
Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the attention of such individuals in the
performance of their duties or otherwise. The Company does not currently
have a right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate to the
Company's proposed business operations.
The officers and directors are, so long as they are officers or directors of
the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to their attention, either in
the performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will
be a breach of the fiduciary duties of the officer or director. If the Company
or the companies in which the officers and directors are affiliated with both
desire to take advantage of an opportunity, then said officers and directors
would abstain from negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if the Company
should decline to do so. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
19
<PAGE>
ITEM 6. REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
(1) Compensation of Executive Officers
<TABLE>
<CAPTION>
Compensation of Executive Officer
Name Title Salary Bonus Common Stock
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Joseph C. Murray Chairman/CEO None(1) None None(3)
Thomas Pryor CFO None(2) None None(3)
Lyman Gaude COO None(2) None None(3)
All Executive Officers as a Group (3 persons)
</TABLE>
The Company has no employment contracts in place with any of its
Officers.
(4) Compensation of Directors
There were no arrangements pursuant to which any director of the Company
was compensated through December 31, 1999 for any service provided as a
Director. In addition, no such arrangement is contemplated for the
foreseeable future as the Company's only directors are its current
executive officers. No stock option plan is in place. No loans have
been made to any officers or directors. Employees are currently paid
by Thermal Products, Inc.
ITEM 7. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Through a Board Resolution, the Company hired the professional services
of G. Brad Beckstead, CPA, Certified Public Accountant, to perform audited
financials for the Company. Mr. Beckstead owns no stock in the Company. The
company has no formal contracts with its accountant, he is paid on a fee
for service basis.
20
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS OF THE REGISTRANT'S COMMON EQUITY
AND OTHER STOCKHOLDER MATTERS
A. Market Information
(1) The Company's common stock is listed and trading on the NASD Over
The Counter Bulletin Board under trading symbol "THFZ."
CERTAIN MARKET INFORMATION
The Company's Common Stock is traded on the OTC Bulletin Board under the
symbol "THFZ." The following table sets forth the high and low bid
quotations for the Common Stock for the periods indicated. These
quotations reflect prices between dealers, do not include retail mark-ups,
mark-downs, and commissions and may not necessarily represent actual
transactions.
<TABLE>
<CAPTION>
Common Stock
PERIOD LOW HIGH
- ------ ---- ---
<S> <C> <C>
Calendar Year 1999
- ------------------
First Quarter ended 3/31/99 $0.11 $0.20
Second Quarter ended 6/30/99 $0.15 $0.28
Third Quarter ended 9/30/99 $0.15 $0.28
Fourth Quarter ended 12/31/99 $0.11 $0.28
Calendar Year 1998
- ------------------
First Quarter ended 3/31/98 $0.15 $0.37
Second Quarter ended 6/30/98 $0.25 $0.40
Third Quarter ended 9/30/98 $0.12 $0.70
Fourth Quarter ended 12/31/98 $0.12 $0.30
Calendar Year 1997
- ------------------
First Quarter ended 3/31/97 n/a n/a
Second Quarter ended 6/30/97 $0.25 $0.70
Third Quarter ended 9/30/97 $0.40 $0.55
Fourth Quarter ended 12/31/97 $0.20 $0.55
</TABLE>
(2)(i) There is currently no Common Stock which is subject to
outstanding options or warrants to purchase, or securities convertible
into, the Company's Common Stock.
(ii) There are approximately 6,616,797 shares restricted common Stock
of the Company, of which all of these restricted shares which are
more than two years old that could be sold under Rule 144 under the
Securities Act of 1933, as amended.
21
<PAGE>
(iii) There is currently no common equity that is being or is proposed to
be publicly offered by the registrant, the offering of which could have a
material effect on the market price of the issuer's common equity.
B. Holders
As of December 31, 1999, the Company has approximately one thousand seven
hundred and seventy (1,770) stockholders of record. Penny Stock Regulation
Broker-dealer practices in connection with transactions in "Penny Stocks"
are regulated by certain penny stock rules adopted by the Securities and
Exchange Commission. Penny stocks generally are equity securities with a
price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system). The penny
stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the
risk associated with the penny stock market. The broker-dealer must also
provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of
each penny stock held in the customer's account. In addition, the penny
stock rules generally require that prior to a transaction in a penny
stock, the broker-dealer must make a written determination that the penny
stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading activity
in the secondary market for a stock that becomes subject to the penny
stock rules. When the Registration Statement becomes effective and the
Company's securities become registered, the stock will likely have a
trading price of less than $5.00 per share and will not be traded on
any exchanges. Therefore, the Company's stock will become subject to
the penny stock rules and investors may find it more difficult to sell
their securities, should they desire to do so.
C. Dividend Policy
The Company has not paid any dividends to date. In addition, it does not
anticipate paying dividends in the immediate foreseeable future. The
Board of Directors of the Company will review its dividend policy from
time to time to determine the desirability and feasibility of paying
dividends after giving consideration to the Company's earnings, financial
condition, capital requirements and such other factors as the board may
deem relevant.
D. Reports to Shareholders
The Company intends to furnish its shareholders with annual reports
containing audited financial statements and such other periodic reports
as the Company may determine to be appropriate or as may be required by
law. Upon the effectiveness of this Registration Statement, the Company
will be required to comply with periodic reporting, proxy solicitation and
certain other requirements by the Securities Exchange Act of 1934.
E. Transfer Agent and Registrar
The Transfer Agent for the shares of common voting stock of the Company
are maintained by: United Stock Transfer Company, 3615 South Huron Street,
Suite 104, Englewood, CO 80110 Phone: (303)783-9055.
ITEM 2. LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings nor does it
have knowledge of any threatened litigation.
22
<PAGE>
ITEM 3. RECENT SALES OF UNREGISTERED SECURITIES
During the year ended December 31, 1997, the Company issued 22,511,522 shares
of its $0.001 par value common stock for cash and services pursuant to a
private placement offering. There are currently 1,770 shareholders.
During the year ended December 31, 1998, $629,336.00 of donated capital was
received in the form of cash and services, and is recorded as additional
paid-in capital. During the year ended December 31, 1999, $223,748.00 of
donated capital was received in the form of cash and services, and is
recorded as additional paid-in capital.
In July 1995, MedGroup Inc. distributed the 1,000,000 ThermaFreeze
common shares it received in consideration for its portion of the
Technology rights acquired by ThermaFreeze, Inc. The MedGroup
shareholders received one (1) ThermaFreeze share for every twenty
(20) shares of MedGroup owned beneficially and of record as of
June 30, 1995. These shares were not registered under the
Securities Act of 1933, as amended, and were not to be publicly
offered or sold by the recipients. The MedGroup distribution of
the ThermaFreeze shares increased the number of ThermaFreeze
shareholders to 1,122.
The Company issued 5,000,000 of its Preferred Shares to Thermal
Products, Inc., an unaffiliated Nevada Corporation, in exchange
for: (a) The exclusive use and lease for North America of
Thermal Products, Inc. ThermaFreeze(R) production machine and
license rights to all future ThermaFreeze(R) production and process
machines.
At December 31, 1999, there was a total of 1,770 Shareholders with
22,511,522 common shares Issued and Outstanding. Total Warrants
issued is 408,342 with an exercise price of $0.15 for two years
from the date of purchase of common shares. All shares have been
issued with a Restrictive Legend. 5,000,000 Preferred Shares are
issued and outstanding with one (1) share for one (1) share conversion
rights to common.
ITEM 4. DESCRIPTION OF SECURITIES
A. Common Stock
(1) Description of Rights and Liabilities of Common Stockholders
i. Dividend Rights - The holders of outstanding shares of common stock
are entitled to receive dividends out of assets legally available therefore
at such times and in such amounts as the board of directors of the Company
may from time to time determine.
ii. Voting Rights - Holders of the Company's Common Stock are entitled
to one (1) vote for each Share owned. Shares of Common Stock do not have
cumulative voting rights. Holders of more than fifty (50%) percent
of the Shares voting for the election of directors can elect all
the directors and in such event, the holders of the remaining
Shares will not be able to elect a single director.
iii. Liquidation Rights - All outstanding shares of Common Stock
are fully paid and non-assessable. Upon any liquidation, distribution
or winding up of the Company, holders of shares of Common Stock are
entitled to receive pro rata all of the assets of the Company available
for distribution to shareholders, subject to the rights of the holders
of any Preferred Stock or secured debt that may then be outstanding.
23
<PAGE>
iv. Preemptive Rights - Holders of common stock are not entitled to
preemptive rights.
v. Conversion Rights - No shares of common stock are currently subject to
outstanding options, warrants, or other convertible securities.
vi. Redemption rights - no redemption rights exist for shares of common
stock.
vii. Sinking Fund Provisions - No sinking fund provisions exist.
viii. Further Liability For Calls - No shares of common stock are subject
to further call or assessment by the issuer. The Company has not issued
stock options as of the date of this Registration Statement.
(2) Potential Liabilities of Common Stockholders to State and Local
Authorities
No material potential liabilities are anticipated to be imposed on
stockholders under state statues. Certain regulations, however,
require regulation of beneficial owners of more than 5% of the voting
securities. Stockholders that fall into this category, therefore, may be
subject to fines in circumstances where non-compliance with these
regulations are established.
B. Preferred Stock
(1) Description of Rights and Liabilities of Preferred Stockholders
i. Dividend Rights - Holders of the Shares of Preferred Stock are
entitled to receive such dividends, as the Board of Directors may from
time to time declare out of the funds of the Company legally available
for the payment of dividends.
ii. Voting Rights - Holders of the Company's Preferred Stock are entitled
to one (1) vote for each Share owned. Shares of Preferred Stock do not have
cumulative voting rights. Therefore, holders of more than fifty
(50%) percent of the Shares voting for the election of the directors can
elect all the directors and in such event, the holders of the remaining
Shares will not be able to elect a single director.
iii. Liquidation Rights - In case of the dissolution, liquidation or
winding-up of the Corporation, whether voluntary or involuntary or in
any instance, the holders of record of shares of the Preferred Stock then
outstanding shall be entitled to participate in the distributions, either
in cash or in kind, of the assets of the corporation on a priority basis
but only to, the extent of outstanding shares of Preferred Stock
multiplied by its par value per share. Preferred shares have priority
over the common shares in the event of Company liquidation.
iv. Preemptive Rights - The holders of the shares of Preferred Stock will
have no preemptive, redemption or other rights other that as established
by applicable corporate law.
v. Conversion Rights - The Preferred shares can be converted to Common
Stock with one (1) share for one (1) share conversion rights to common.
vi. Sinking Fund Provisions - No sinking fund provisions exist.
vii. Further Liability For Calls - No shares of Preferred stock are subject
to further call or assessment by the issuer. The Company has not issued
stock options as of the date of this Registration Statement.
24
<PAGE>
C. Debt Securities
The Company is not registering any debt securities, nor are any outstanding.
D. Other Securities To Be Registered
The Company is not registering any security other than its Common Stock
and Preferred Stock.
ITEM 5. Indemnification of Directors and Officers
Article VII of the Company's Articles of Incorporation for the Company
do contain provisions for indemnification of the officers and directors;
in that it states: " No director of this corporation shall be liable to
the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the directors duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, {iii) under section 174 of the
General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit.
1) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation,
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorney's fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with the action, suitor proceeding if he acted in good faith
and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation, and that, with
respect to any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys' fees actually
and reasonably incurred by him in connection with the defense or settlement
of the action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or matter
as to which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to
the corporation or for amounts paid in settlement to the corporation, unless
and only to the extent that the court in which the action or suit was brought
or other court of competent jurisdiction determines upon application that
in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such expenses as the court deems proper.
25
<PAGE>
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections 1 and 2, or in
defense of any claim, issue or matter therein, he must be indemnified by
the corporation against expenses, including attorneys' fees, actually and
reasonably incurred by him n connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a
court or advanced pursuant to subsection 5, must be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstances. The determination must be made: (a) By the stockholders:
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to act, suit or proceeding; (c) If a majority
vote of a quorum consisting of directors who were not parties to the act, suit
or proceeding so orders, by independent legal counsel in a written opinion;
or (d) If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot to obtained, by independent legal counsel in a
written opinion; or
5. The By-laws or an agreement made by the corporation may provide that
the expenses of officers and directors incurred in defending a civil or
criminal, suit or proceeding must be paid by the corporation as they are
incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the director
or officer to repay the amount if it is ultimately determined by a court
of competent jurisdiction that he is not entitled to be indemnified by
corporation. The provisions of this subsection do not affect any rights
to advancement of expenses to which corporate personnel other than the
directors or officers may be entitled under any contract or otherwise by
law.
6. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section: (a) Does not exclude any
other rights to which a person seeking indemnification or advancement of
expenses may be entitled under the articles of incorporation or any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise,
for either an action in his official capacity or an action in another
capacity while holding his office, except that indemnification, unless
ordered by a court pursuant to subsection 2 or for the advancement of
expenses made pursuant to subsection 5, may not be made to or on behalf
of any director or officer if a final adjudication establishes that his
act or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action. (b) Continues
for a person who has ceased to be a director, officer, employee or agent
and endures to the benefit of the heirs, executors and administrators
of such a person.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, 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 Securities 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
Securities Act and will be governed by the final adjudication of such
issue.
26
<PAGE>
PART F/S
ITEM 1. Financial Statements
The following documents are filed as part of this report:
a) ThermaFreeze, Inc.
Report of G. Brad Beckstead, CPA
27
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
Page Number
<S> <C>
ACCOUNTANT'S REPORT of G. Brad Beckstead, CPA F-1
Balance Sheet F-2
Statement of Operations and Deficit
Accumulated During the Development Stage F-3
Statement of Changes in Stockholder's Equity F-4
Statement of Cash Flows F-5
Notes to the Financial Statements F-6-7
</TABLE>
b) Interim Financial Statements are not provided at this time as they
are not applicable at this time.
c) Financial Statements of Businesses Acquired or to be acquired are not
provided at this time, as they are not applicable at this time.
d) Pro-forma Financial Information is not provided at this time as it is
not applicable at this time.
Item 2. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
None--Not Applicable
28
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT....................................... F-1
BALANCE SHEET..................................................... F-2
STATEMENT OF OPERATIONS............................................ F-3
STATEMENT OF STOCKHOLDERS' EQUITY.................................. F-4
STATEMENT OF CASH FLOWS............................................ F-5
NOTES TO FINANCIAL STATEMENTS...................................... F-6-7
</TABLE>
29
<PAGE>
G. BRAD BECKSTEAD
Certified Public Accountant
330 E. Warm Springs
Las Vegas, NV 89119
702.528.1984
INDEPENDENT AUDITOR'S REPORT
March 9, 2000
Board of Directors
ThermaFreeze, Inc.
Encino, CA
I have audited the Balance Sheets of ThermaFreeze, Inc.(the "Company") (A
Development Stage Company), as of December 31, 1999 and 1998, and the related
Statements of Operations, Stockholders' Equity, and Cash Flows for the
periods then ended. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 statement
presentation. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ThermaFreeze, Inc., (A
Development Stage Company), as of December 31, 1999 and 1998, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has had limited operations and have not commenced
planned principal operations. This raises substantial doubt about its
ability to continue as a going concern. Management's plan in regard to these
matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ G. Brad Beckstead, CPA
- --------------------------
G. BRAD BECKSTEAD
Certified Public Accountant
330 E. Warm Springs
Las Vegas, NV 89119
702.528.1984
F-1
<PAGE>
ThermaFreeze, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 1999 and 1998
<TABLE>
<CAPTION>
BALANCE SHEET
1999 1998
Assets
<S> <C> <C>
Cash $ 1,503 $ 2,283
Accounts receivable 5,105
Furniture, fixtures and equipment, net 1,090 1,453
---------- ----------
Total Assets $ 7,698 $ 3,736
========== ==========
Liabilities and Stockholders' Deficit
Notes payable - shareholders $1,081,263 $1,003,036
Accrued and other liabilities 108,158 53,288
---------- ----------
Total Liabilities 1,189,421 1,056,324
---------- ----------
Common Stock, $0.001 par value,
40,000,000 shares authorized; 22,511,522
shares issued and outstanding at 12/31/99
and 12/31/98 22,512 22,512
Preferred Stock, $0.001 par value,
10,000,000 shares authorized; 5,000,000
shares issued and outstanding at 12/31/99
and 12/31/98 5,000 5,000
Additional paid-in capital 2,106,750 1,883,002
Deficit accumulated during development stage (3,315,985) (2,963,102)
Total Stockholders' Deficit (1,181,723) (1,052,588)
Total Liabilities and Stockholders' Deficit $ 7,698 $ 3,736
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
ThermaFreeze, Inc.
(A Development Stage Company)
Income Statement
For the periods
December 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
1999 1998
<S> <C> <C>
Revenue $ 212,952 $ 74,206
Research and development 262,516 208,310
General and administrative expenses 175,502 586,665
Depreciation 363 363
---------- -----------
Net deficit before other expenses (225,429) (721,132)
Other expenses - Interest 127,454 106,192
---------- -----------
Net deficit accumulated
during development stage $(352,883) $ (827,324)
========== ==-========
Weighted average number of
common shares outstanding 22,511,522 22,511,522
Net (loss) per share $ -0- $ -0-
=========== ==========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
ThermaFreeze, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the periods
December 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated Total
Addit'l During Stock-
Common Stock Preferred Stock Paid-in Development holders'
Shares Amt. Shares Amt. Capital Stage Deficit
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 31
1997,
Beginning
Balances 22,511,522 22,512 5,000,000 5,000 1,253,666 (2,135,788) (854,600)
Dec 31,
1998,
Donated
Capital 629,336 629,336
Net Loss
Dec 31,
1998 (827,324) (827,324)
Dec 31,
1999
Donated
Capital 223,748 223,748
Net Loss
Dec 31,
1999 (352,883) (352,883)
Balance
as of
Dec 31,
1999 22,511,522 22,512 5,000,000 5,000 2,106,750 (3,315,985) (1,181,723)
=======================================================================
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
ThermaFreeze, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the periods
December 31, 1999 and December 31, 1998
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(352,883) $(827,324)
Depreciation 363 363
Increase in accounts receivable (5,105)
Increase in other liabilities 54,870 28,607
--------- ---------
Net cash used by operating activities (302,755) (798,354)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture, fixtures and equipment 1,816
-------- ---------
Net cash used by investing activities -0- (1,816)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Notes payable-shareholders 78,227 123,393
Additional paid-in capital 223,748 629,336
--------- ---------
Net cash provided by financing activities 301,975 752,729
--------- ---------
Beginning cash 2,283 49,724
--------- ---------
Ending cash $ 1,503 $ 2,283
======== =========
NON-CASH TRANSACTIONS
Interest expense $127,454 $ 106,192
Income taxes -0- -0-
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
ThermaFreeze, Inc.
(A Development Stage Company)
Footnotes
December 31, 1999
Note 1 - History and organization of the company
The Company was organized May, 1994 (Date of Inception) under the laws of
the State of Delaware, as Baseball Properties, Inc. In January, 1997, the
Company acquired ThermaFreeze, Inc., a Nevada corporation, and changed its
name to ThermaFreeze, Inc. The Company has limited operations and in
accordance with SFAS #7, the Company is considered a development stage
company. The Company is authorized to issue 40,000,000 shares of $0.001 par
value common stock and 10,000,000 shares of $.001 par value Preferred stock.
During the year ended December 31, 1997, the Company issued 22,511,522 shares
of its $0.001 par value common stock for cash and services pursuant to a
private placement offering. There are currently 1,770 shareholders.
During the year ended December 31, 1998, $629,336.00 of donated capital was
received in the form of cash and services, and is recorded as additional
paid-in capital.
During the year ended December 31, 1999, $223,748.00 of donated capital was
received in the form of cash and services, and is recorded as additional
paid-in capital.
During the year ended December 31, 1999, 408,342 warrants were issued.
Each warrant is redeemable for one share of common stock at $.15 per share
exercisable for a 2-year period from the purchase date.
There have been no other issuances of Common or Preferred stock.
Note 2 - Accounting policies and procedures
Accounting policies and procedures have not been determined except as follows:
1. The Company uses the accrual method of accounting.
2. Earnings 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 utilizing the straight line method of depreciation.
5. The Company will review its need for a provision for federal income tax
after
each operating quarter and each period for which a statement of operations is
issued.
6. The Company has adopted December 31 as its fiscal year end.
F-6
<PAGE>
ThermaFreeze, Inc.
(A Development Stage Company)
Footnotes
December 31, 1999
Note 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. Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern.
Note 4 - Related party transactions
The Company leases its Encino, CA office space from a shareholder at a fair
market rate of $2,500.00 per month. At times, the Company has not had the
cashflow to pay for the rent, whereupon, the amount is added to a Note Payable
to the shareholder. The note is due upon demand, and accrues interest at 1%
per month cumulative until repaid.
The Company leases equipment from Thermal Products, Inc., a related entity,
at a fair market rate of $10,000.00 per month. At times, the Company has not
had the cashflow to pay for the rent, whereupon, the amount is added to a Note
Payable to Thermal Products, Inc. The note is due upon demand, and accrues
interest at 1% per month cumulative until repaid.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
Note 5 - Warrants and options
During the year ended December 31, 1999, 408,342 warrant units were issued.
Each warrant unit contains 100,000 shares of restricted common stock and
33,334 warrants to purchase 33,334 shares of common stock at $.15 per share
exercisable for a 2-year period from the purchase date.
Note 6 - Year 2000 issue
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise
in systems which use certain dates in 1999 to represent something other than
a date. The effects of the Year 2000 issue may be experienced before, on,
or after January 1, 2000, and if not addressed, the impact on operations and
financial reporting may range from minor errors to significant system failure
which could affect an entity's ability to conduct normal business operations.
It is not possible to be certain that all aspects of the Year 2000 issue
affecting the entity, including those related to the efforts of customers,
suppliers, or other third parties will be fully resolved.
F-7
<PAGE>
Part III
ITEM 1. Index to Exhibits (Pursuant to Item 601 of Regulation SB)
Exhibit Number Name and/or Identification of Exhibit
1. Underwritten agreement
None. Not Applicable
2. a) Plan of Acquisition, Reorganization, Arrangement, Liquidation, or
Succession.
None. Not Applicable
b) Asset Purchase and Liability Assumption Agreement
None. Not Applicable
c) Interest Purchase Agreement
None. Not Applicable
d) Agreement for Bill of Sale and Assignment of Assets
None. Not Applicable
e) Exchange Stock Agreement
None. Not Applicable
3. Articles of Incorporation & By-Laws
3.1 Articles of Incorporation of the Company Filed May 1, 1995
3.2 Certificate of Amendment filed on November 15, 1996
3.3 Certificate of Amendment filed on November 27, 1996
3.4 Certificate of Amendment filed on November 27, 1996
3.5 Certificate of Amendment filed on May 11, 1999
3.6 By-Laws of the Company
4. Instruments Defining the Rights of Security Holders
4.1 Those included in exhibit 3, and sample of Stock Certificate
5. Opinion on Legality
None. Not Applicable
6. No Exhibit Required
Not Applicable
7. Opinion on Liquidation Preference
None. Not Applicable
8. Opinion on Tax Matters
None. Not Applicable
9. Voting Trust Agreement and Amendments
None. Not Applicable
10. Material Contracts
10.1 Agreement between Baseball Properties, Inc., ThermaFreeze, Inc.
and Thomas Sullivan, dated November 15, 1996
10.2 Licensing Agreement with Thermal Products, Inc., dated Nov. 26, 1996
29
<PAGE>
11. Statement Re Computation of Per Share Earnings
None. Not Applicable. Computation of per share earnings can be
clearly determined from the Statement of Operation from the
Company's financial statements.
12. No Exhibit Required
13. Annual or Quarterly Reports - Form 10-Q
None. Not Applicable
14. Material Foreign Patents
None. Not Applicable
15. Letters on Unaudited Interim Financial Information
None. Not Applicable
16. Letter on Change in Certifying Accountant
None. Not Applicable
17. Letter of Director Resignation
None. Not Applicable
18. Letter on Change in Accounting Principles
None. Not Applicable
19. Reports Furnished to Security Holders
None. Not Applicable
20. Other Documents or Statements to Security Holders
None. Not Applicable
21. Subsidiaries of Small Business Issuers
None. Not Applicable
30
<PAGE>
22. Published Report Regarding Matters Submitted to Vote of
None. Not Applicable
23. Consent of Experts and Counsel
23.1 Statement from G. Brad Beckstead, CPA
24. Power of Attorney
None. Not Applicable
25. Statement of Eligibility of Trustee
None. Not Applicable
26. Invitations for Competitive Bids
None. Not Applicable
27. Financial Data Schedule
27.1 Financial Data Schedule
28. Information from Reports Furnished to State Insurance Regulatory
Authorities
None. Not Applicable
29. Additional Exhibits
None. Not Applicable
31
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 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.
ThemaFreeze, Inc.
/s/ Joseph C. Murray
- -----------------------
President and Chairman
Date: March 21, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
ThemaFreeze, Inc.
/s/ Thomas Pryor
- ------------------------
CFO and Director
Date: March 21, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
ThemaFreeze, Inc.
/s/ Lyman Gaude
- ------------------------
COO and Director
Date: March 21, 2000
32
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 05/11/1995
950095464 - 2503280
CERTIFICATE OF INCORPORATION
OF
BASEBALL PROPERTIES, INC.
-----------------------------
FIRST. The name of this corporation shall be:
BASEBALL PROPERTIES, INC.
SECOND. Its registered office in the State of Delaware is to be located
at 313 South State Street, in the City of Dover, County 0f Kent and its
registered agent at such address is XL CORPORATE SERVICES, INC.
THIRD. The nature of the business and the objects and purposes proposed
to be transacted, promoted and carried on are to do any or all things herein
mentioned, as fully and to the same extent as natural persons might or
could do, and in any part of the world, viz:
The purpose of the corporat1on is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law
of Delaware.
FOURTH. The total number of shares of stock which this Corporation is
authorized to issue is:
20,000,000 Shares at 0.001 Par value
FIFTH. The name and address of the incorporator is as follows:
XL Corporate Services, Inc.
313 South State Street.
Dover, DE 19901
SIXTH. The Directors shall have power to make and too alter or Amend the
By-Laws; to fix the amount to be reserved as working capital, and to
authorize and cause to be executed, mortgages and liens without limit as
to the amount, upon the property and franchise of this Corporation.
With the consent in writing, and pursuant to a majority vote of the
holders of the capital stock issued and outstanding, the Directors shall
have author1ty to dispose, in any manner, of the whole property of this
corporation.
1
<PAGE>
The By-Laws shall determine whether and to what extent the account and
books of this corporation, or any of them, shall be open to the inspection
of the stockholders; no stockholder shall have any right of inspecting any
account, or book, or document of this Corporation except as conferred by
the law or the By-Laws, or by resolution of he stockholders.
The stockholders and directors shall have power to hold their
meetings and keep the books, documents and papers of the corporation
outs1de of the state of Delaware, at such places as maybe, from time to
time; designated by the By-Laws or by resolution of the stockholders or
director, except as otherwise required by the laws of Delaware.
It is the intention that the objects, purposes and powers specified in
the THIRD paragraph hereof shall, except where otherw1se specified in said
paragraph, be nowise limited or restricted by referenced to or inference
from the terms of any other clause or paragraph in this certificate of
incorporation, but that the objects, purposes and powers specified in the
THIRD paragraph and in each of the clauses or paragraphs of this charter
shall be regarded as independent objects, purposes and powers.
SEVENTH. No director of this corporation shall be liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the directors
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct. or a
knowing violation of law, {iii) under section 174 of the General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
EIGHTH. The follow1ng person(s) are appointed director(s) of the corporation
until the first annual meeting of the stockholders or until their successors
shall be elected or appointed and shall qualify:
THOMAS J. SULIVAN
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
this first day of May, A.D., 1995.
XL CORPORATE SERVICES, XNC.
s/s Tara Hartnett
- ---------------------------
Tara Hartnett
Assistant Secretary
2
<PAGE>
ACTION OF SOLE INCORPORATOR
BASEBALL PROPERTIES, INC.
- ----------------------------
The undersigned, without a meeting, being the sole incorporator of
the Corporation, does hereby elect the persons listed below to serve
as directors of the corporation until the first annual meeting of
shareholders and until their successors are elected and qualify:
THOMAS J. SULIVAN
/s/ Tara Hartnett
- --------------------
Tara Hartnett
Incorporator
Dated: MAY 1, 1995
3
<PAGE>
State of Delaware
Office of the Secretary of State
- ---------------------------------
I, EDWARD J. FREEL, SECRETARY OF THE STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHD IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF "BASEBALL PROPERTIES,
INC." CHANGING ITS NAME FROM "BASEBALL PROPERTIES, INC." TO
"THEREAMFREEZE, INC.", FILED IN THIS OFFICE ON THE TWENTY-SEVENTH
DAY OF NOVEMBER, A.D. 1996, AT 2 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE KENT COUNTY RECORDER OF DEEDS AND RECORDING.
[SEAL]
s/s Edward J. Freel
- -----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8214313
DATE: 11-27-96
<PAGE>
EXHIBIT 3.2
SECTETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:00 PM 11/27/1996
960348767 - 2503280
STATE 0F DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
----------------------------------
a corporation organized and existing under and by the virtue of the
General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of
Baseball Properties, Inc.
- -------------------------------------------------------------------
resolutions were duly adopted setting forth a proposed amendment of
the Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of
said corporation for consideration thereof. The resolution setting forth
the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "1 (one)" that, as amended,
said Article shall be and read as follows: the corporation name of Baseball
Properties, Inc. shall change the name to ThermaFreeze, Inc.
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly called and
held upon notice in accordance with section 222 of General Corporation Law of
the State of Delaware at which meeting the necessary number of share as
required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provision of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: The capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said corporation has caused this certificate signed by
Thomas J. Sullivan, an authorized Officer this 15th day of November, 1996.
BY: s/s Thomas J. Sullivan
- ----------------------------
TITLE OF OFFICER: President
<PAGE>
EXHIBIT 3.3
State of Delaware
Office of the Secretary of State
- ---------------------------------
I, EDWARD J. FREEL, SCRETARY OF THE STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHD IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF "THEREAMFREEZE, INC.",
FILED IN THIS OFFICE ON THE TWENTY-SEVENTH DAY OF NOVEMBER, A.D.
1996, AT 5:15 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE KENT COUNTY RECORDER OF DEEDS AND RECORDING.
[SEAL]
s/s Edward J. Freel
- -----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8218548
DATE: 12-03-96
STATE 0F DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
ThermFreeze, Inc.
-------------------------------------------------
a corporation organized and existing under and by the virtue of the
General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of
ThermaFreeze, Inc.
- -------------------------------------------------------------------
resolutions were duly adopted setting forth a proposed amendment of
the Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of
said corporation for consideration thereof. The resolution setting forth
the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "4 (four)" that, as amended,
said Article shall be and read as follows: All issued and outstanding Common
Shares are hereby reversed one (1) for every four (4) with an effective Record
Date of 11/15/96. That 20,000,000 common at .001 and 5,000,000 preferred at
.001 are authorized.
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly called and
held upon notice in accordance with section 222 of General Corporation Law of
the State of Delaware at which meeting the necessary number of share as
required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provision of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: The capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said corporation has caused this certificate signed by
Thomas J. Sullivan, an authorized Officer this 15th day of November, 1996.
BY: s/s Thomas J. Sullivan
- ----------------------------
TITLE OF OFFICER: President
<PAGE>
State of Delaware
Office of the Secretary of State
- ---------------------------------
I, EDWARD J. FREEL, SCRETARY OF THE STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHD IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF "BASEBALL PROPERTIES,
INC." CHANGING ITS NAME FROM "BASEBALL PROPERTIES, INC." TO
"THEREAMFREEZE, INC.", FILED IN THIS OFFICE ON THE TWENTY-SEVENTH
DAY OF NOVEMBER, A.D. 1996, AT 2 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE KENT COUNTY RECORDER OF DEEDS AND RECORDING.
[SEAL]
s/s Edward J. Freel
- -----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8214314
DATE: 12-02-96
<PAGE>
EXHIBIT 3.4
STATE 0F DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
ThermFreeze, Inc.
----------------------------------
a corporation organized and existing under and by the virtue of the
General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of
Baseball Properties, Inc. (now called ThermaFreeze, Inc.)
-------------------------------------------------------------------
resolutions were duly adopted setting forth a proposed amendment of
the Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of
said corporation for consideration thereof. The resolution setting forth
the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "4 (four)" that, as amended,
said Article shall be and read as follows: That 5,000,000 (Five million
Preferred stock with $1.00 Par Value are authorized.
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly called and
held upon notice in accordance with section 222 of General Corporation Law of
the State of Delaware at which meeting the necessary number of share as
required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provision of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: The capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said corporation has caused this certificate signed by
Thomas J. Sullivan, an authorized Officer this 15th day of November, 1996.
BY: s/s Thomas J. Sullivan
- ----------------------------
TITLE OF OFFICER: President
<PAGE>
EXHIBIT 3.5
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
ThermaFreeze, Incorporated, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of ThermaFreeze, Incorporated,
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of
said corporation for consideration thereof. The resolution setting forth
the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "four (4)" so that, as
amended, said Article shall be and read as follows:
"The total number of shares of stock which this corporation is authorized
to issue is:
- - 40,000,000 Shares of Common Stock at $.001 Par Value
- - 10,000,000 Shares of Preferred Stock at $.001 Par Value
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was
duly called and held upon notice in accordance with Section 222 of the
General Corporation Law of the State of Delaware at which meeting the
necessary number of shares as required by statute
were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by THOMAS PRYOR, an Authorized Officer, this 11th day of May,
1999.
By: s/s Thos Pryor, CFO
- ------------------------
Authorized Officer
THOMAS PRYOR
Chief Financial Officer
<PAGE>
EXHIBIT 3.6
BY-LAWS OF ThermaFreeze, Inc.
ARTICLE I
OFFICES
1. THE PRINCIPAL OFFICES of the corporation shall be in the City of
Mobile, in the State of Alabama. The corporation may have such other
offices within or without the State of Delaware and the State of California
as the Board of Directors may designate or as the business of the
corporation may from time to time require.
ARTICLE II
STOCKHOLDERS
1. ANNUAL MEETING. The annual meeting of the stockholders shall be held
on the first Monday in November of each year commending with the year 1996 at
the hour of 10:00 a.m. for the purpose of electing directors and officers and
for the transaction of other business that may come up before the meeting.
If the day fixed for the annual meeting shall be declared a legal holiday,
such meeting shall be held on the next succeeding business day. If the
election of Directors shall not be held on the day designated herein for any
annual meeting of the shareholders, or at any adjournment thereof, the Board
of Directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as soon as conveniently may be.
2. SPECIAL MEETING. Special meeting of the stockholders may be called
by the directors, or by the President. Special meetings shall be called any
time upon the request of the stockholders owning not less than fifty percent
(50%) of the outstanding stock of the corporation entitled to vote at such
meeting.
3. PLACE OF MEETING. All meetings of the stockholders shall be held at
the principal office of the corporation or at such other place as shall be
determined from time to time by the Board of Directors. If the place of the
meeting is not at the principal offices of the corporation, the place of
such meeting shall be stated in the call of the meeting.
4. NOTICE OF MEETING. Notice of the time and place of the annual meeting
of stockholders shall be given by mailing written notice of the meeting at
least ten (10) days prior to the meeting to each stockholder of record of the
corporation entitled to vote at such meeting, such notice shall be deemed to
be delivered when deposited in the United States mail so addressed, with
postage prepaid thereon. The notice of the time and place of special
meetings shall be given by written notice or by personal notice five (5)
days prior to the meeting to each stockholder of record of the corporation
entitled to vote at such meeting.
1
<PAGE>
5. CLOSING OF TRANSFER BOOKS. For the purpose of determining the
stockholders entitled to notice of or entitled to vote at any regular meeting
of stockholders or any special meeting, or of determining the stockholders
entitled to receive payment of any dividend, or in order to make a
determination of stockholders for any other purpose, the Directors of the
corporation shall provide that the stock transfer books be closed for a
stated period, but not to exceed in any case fifty (50) days. If the stock
transfer books are to be closed for or the purpose of determining
stockholders entitled to noticed of a special meeting or of the annual
meeting of stockholders, such book shall be closed for at least fourteen (14)
days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case
to be not more than fifty (50) days and, in the case of a meeting of
shareholders, not less than (10) days prior to the date on which a particular
action requiring such determination of shareholders is to be taken. If
the stock transfer books are not closed and no record date is fixed for
determination of shareholders entitled to notice of or to vote at the meeting
of shareholders, or shareholders entitled to received payment of a dividend,
the date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be record date for such determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
6. VOTING LISTS. The officer or agent in charge of the stock transfer
books for the corporation shall prepare before each meeting of stockholders a
complete list of stockholders entitled to vote at the meeting arranged in
alphabetical order with the address of and number of shares held by each
person. The list shall be prepared five (5) days prior to the stockholders'
meeting and shall be keep on file at the principal office of the corporation
and subject to inspection during normal business hours by any stockholder.
The list shall also be produced and kept open at the stockholders' meeting
and shall be subject to inspection by any stockholder during the meeting.
7. QUORUM. The quorum at any annual of special meeting of stockholder
shall consist of stockholders representing, capital stock of the corporation
entitled to vote at such meetings, except as otherwise specifically provided
by law or in the Articles of Incorporation. If a quorum is not present at a
properly called stockholders' meeting, the meeting shall be adjourned by
then present and an additional and further notice sent to all stockholders
notifying them of the adjournment of the meeting and the date and time and
place of the adjourned meeting. At such adjourned meeting. At such
adjourned meeting, at which a quorum is present or represented, business may
be transacted which might have been transacted at the meeting as originally
notified.
8. PROXIES. At all meetings of stockholders, a stockholder may vote by
proxy executed in writing by the stockholder or by their duly authorized
attorney in fact. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting.
2
<PAGE>
9. VOTING OF SHARES. At all elections for directors of the corporation,
each shareholder may cast as many votes in the aggregate as he is entitled
to vote under its charter, multiplied by the number of directors to be
elected. Each shareholder may cast a whole number of votes, either in
person or by proxy, for one candidate or distribute said votes among two or
more candidates. On all other matters each shareholder shall have one vote
for each share of stock owned by the shareholder. All elections for directors
of the corporation shall be decided by plurality vote. All other questions
shall be decided by majority vote.
10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of
another corporation may be voted by such officer, agent or proxy as the
Bylaws of such corporation may prescribe or in the absence of such provision,
as the Board of Directors of such corporation may determine. Shares held by
an administrator, executor, guardian or conservator may be voted by him,
either in person or by proxy, without a transfer of such into his name.
Shares standing the name of a trustee may be voted by him, either in person
or by proxy, but no trustee shall be entitled to vote shares held by him
without a transfer of such shares into his name. Shares standing in the name
of a receiver may be voted by such receiver, and the shares held by or under
the control of a receiver may be voted by such receiver without the transfer
thereof into his name, if authority to do so be contained in an appropriate
order of the court by which such receiver was appointed. A shareholder whose
shares are pledged shall be entitled to vote such shares until the shares
have been transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred. Shares of it
own stock belonging to the Corporation shall be voted, directly or
indirectly, at any meeting, and shall not be counted in determining the
total number of outstanding shares at any given time.
11. ORDER OF BUSINESS. The order of business at all meetings of
stockholders shall be as follows:
a. Roll call.
b. Proof of notice of meeting or waiver of notice.
c. Reading of minutes of preceding meeting.
d. Reports of Officers.
e. Reports of Committees.
f. Election of Directors.
g. Unfinished Business.
h. New Business.
12. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided by law,
any action required to be taken at a meeting of the shareholders, or any other
action which may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the shareholders entitled to vote with respect to
the subject matter thereof.
3
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
1. GENERAL POWERS. The business and affairs of the corporation shall be
managed by the Board of Directors consisting of not less than one or more
than seven directors. The Board of Directors shall be elected for a term of
one year and shall hold office until the successors are elected and qualified.
Directors need not be stockholders. In addition to the power and authority
granted by the By-Laws and the Articles of Incorporation, the Board of
Directors may exercise all such powers of the corporation and do all such
lawful acts and things that are not forbidden by statute, Articles of
Incorporation, or by these By-Laws.
2. VACANCIES. All vacancies in the Board of Directors, whether caused
by resignation, death of otherwise, may be filled by a majority vote of the
remaining director or directors, even though they constitute less than a
quorum, or by a majority vote of the stockholders. This may be accomplished
at any special or regular meeting of the Board of Directors or by the
stockholders at any regular or special meeting. A director thus elected to
fill any vacancies shall hold office for the unexpired term of their
predecessor and until their successor is elected and qualified.
3. REGULAR MEETINGS. A regular meeting of the directors shall be held
at the same time as the annual meeting of stockholders. No notice of the
regular meeting of the Board of Directors shall be sent. The directors may
provide by resolution the time and place for the holding of additional
regular meetings other than the meeting at the annual meeting of
stockholders, by giving notice under their same provisions as that notice
given of a stockholders meeting.
4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called at any time by the President, or in his absence, by the Vice
President, or by any two directors, to be held at the time and place
designated in notice of special meeting. The notice of special meeting
shall be in the same form and done in the same manner as the notice given for
stockholders' meeting.
5. NOTICE. Notice of any special meeting shall be given at least two (2)
days previous thereto by written notice delivered personally or mailed to
each director at h is business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the notice be
given to the telegraph company. Any directors may waive notice of any
meeting. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except; where a director attends a meeting
for the purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
6. TELEPHONIC MEETING. A meeting of the Board of Directors may be had by
means of a telephone conference or similar communications equipment by which
all persons participating in the meeting can hear each other, and the
participation in a meeting under such circumstances shall constitute presence
at the meeting.
4
<PAGE>
7. QUORUM. The majority of the Board of Directors shall be necessary at
all meetings to constitute a quorum for the transaction of business. If less
than a quorum is present, the meeting shall be adjourned. Any resolution
adopted in writing and executed and signed by a majority of the Board of
Directors, accompanied with a showing that the resolution had been presented
to all directors, shall constitute and be a valid resolution as if the
resolution had been adopted at a meeting at which all directors shall in all
respects bind the corporation and constitute full and complete authority for
the officers acting pursuant to it.
8. MANNER OF ACTING. The act of the majority of the directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors.
9. ACTION WITHOUT A MEETING. Any action that may be taken by the Board
of Directors at a meeting may be taken without a meeting if a consent in
writing, setting forth the action so to be taken, shall be signed before such
action by all of the directors.
10. REMOVAL. Any director may be removed for cause by the majority vote
of the stockholders or by a majority vote of the Board of Directors. Any
director may be removed without cause by a majority vote of the stockholders.
11. RESIGNATION. Any director may resign at any time by giving written
notice to the Board of Directors and the President or the Secretary or the
corporation. The resignation shall be effective upon receipt of the notice
and the acceptance of the resignation shall not be necessary to make it
effective.
12. COMPENSATION. No compensation shall be paid to directors as such
for their services but the Board of Directors by resolution can fix a sum for
expenses for actual attendance at each regular or special meeting of the
Board. Nothing contained herein shall be construed to preclude any director
from serving the corporation in any other capacity and receiving a
compensation therefore.
13. CONTRACTS. No contract or other transaction between this Corporation
and any other corporation shall be impaired, affected or invalidated, nor
shall any director be liable in any way by reason of the fact that one or
more the directors of this Corporation is or are interested in, or is a
director or officer, or are directors or officers of such other corporations,
provided that such facts are disclosed or made known to the Board of
Directors, prior to their authorizing such transaction. Any director
may be a party to or may be interested in any contract or transaction of this
Corporation , and no directors shall be liable in any way by reason of such
interest, provided that the fact of such interest be disclosed or made known
to the Board of Directors prior to their authorization of such contract or
transaction, and provided that the Board of Directors shall authorize,
approve or ratify such contract or transaction by the vote (not counting the
vote of any such Director) of a majority of a quorum, notwithstanding the
presence of any such director at the meeting at which such action is
taken. Such director or directors may be counted in determining the presence
of a quorum at such meeting. This Section shall not be construed to impair,
invalidate or in any way affect any contract or other transaction which would
otherwise be valid under the law (common, statutory or otherwise) applicable
thereto.
5
<PAGE>
14. COMMITTEES. The Board of Directors, by resolution adopted by a
majority of the entire Board, may from time to time designated from among its
members an executive committee and such other committees, and alternative
members thereof, as they may deem desirable, with such powers and authority
(to the extent permitted by law) as may be provided in such resolution.
Each such committee shall serve at the pleasure of the Board.
15. PRESUMPTION OF ASSENT. A director of a corporation who is present at
a meeting of the Board of Directors at which action on any corporate matter
has been taken, will be presumed to have assented to the action taken unless
their dissent is entered in the minutes of the meeting or unless they had
filed their written dissent to such action with the person acting as the
Secretary at the adjournment thereof, or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
ARTICLE IV
OFFICERS
1. OFFICERS. The officers of the corporation shall be a President,
Vice-Presidents (if needed), a Secretary (if needed) and a Treasurer (if
needed), each of whom shall be elected by the Board of Directors. Such
officers and assistant officers as may be deemed necessary may be elected or
appointed by the Board of Directors, including a Chairman of the Board. In
its discretion, the Board of Directors may leave unfilled for any such period
as it may determine any office except those of President and Secretary. Any
two or more officers may be held by the same person. Officers may be
directors or shareholders of the Corporation.
2. ELECTION AND TERM OF OFFICERS. The officers of the corporation shall
be elected annually at the regular meeting of the Board of Directors. Each
officer shall hold office for one year or until their successor shall have
been duly elected and qualified. They can resign by giving written noticed
to any member of the Board of Directors of the corporation. The resignation
shall take effect upon receipt thereof and the acceptance shall not be
necessary to make it effective.
3. RESIGNATION. Any officer may resign at any time by giving written
notice of such resignation to the Board of Directors, or to the President or
the Secretary of the Corporation. Unless otherwise specified in such written
notice, such resignation shall take effect upon receipt thereof by the Board
of Directors or by such officer, and the acceptance of such resignation shall
not be necessary to make it effective.
4. REMOVAL. Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in their
judgment, the best interests of the corporation would be served by such
removal. Such removal shall be without prejudice to the contractual rights,
if any, of the persons so removed.
5. VACANCIES. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by the directors for
the unexpired position of the term.
6. PRESIDENT. The President shall be the principal executive officer,
shall generally supervise and control all the business and affairs of the
corporation. The President shall preside at all meetings of stockholders and
of directors. He shall sign with the Secretary, Certificates for share of
Common Stock. The President shall also sign deeds, mortgages, bonds,
contracts of any other instrument which the directors have authorized to be
executed by the President. The President shall be responsible for the
Corporate Books, unless this is delegated to another officer. The President
in general shall perform all the duties incident to the office of President
and such other during as may be prescribed by he directors from time to time.
7. VICE-PRESIDENTS. In the absence of the President, or in the event of
a death, inability or refusal to act, the Vice-President shall perform the
duties of the President. When they are so acting, they shall have all the
powers of and by subject to all the restrictions of the President. The
Vice-President shall perform such other duties as from time to time may be
assigned to him by the President or by the directors. The Vice-President
shall serve in equal capacity.
6
<PAGE>
8. SECRETARY. The secretary shall keep the minutes of the stockholders
and of the directors meetings and shall see that all notices are duly given
in accordance with the provisions of these By-Laws. The secretary shall
issue the notices for all meetings except that a notice of a special meeting
of the directors called at the request of two directors may be issued by
those directors. The secretary shall keep a register of the post office
address of each stockholder and shall have general charge of the stock
transfer books unless this duty is given to a Transfer Agent. The secretary
shall make reports and perform such other duties as are incident to their
office or are properly required of them by the Board of Directors or the
President.
9. TREASURER. The treasurer shall have charge and custody of and be
responsible for all funds and securities of the corporation. He/she shall
receive monies due to the corporation and give receipts therefore and shall
disperse the funds of the corporation in payment of the demands against the
corporation as directed by the officers and the Board of Directors. He/she
shall perform all duties incident to this office of as properly required of
him/her by the officers or the Board of Directors. If required by the
directors, the treasurer shall give a bond for faithful discharge of his/her
duties in such sum as the directors shall determine.
10. SALARIES. The salaries of the officers shall be fixed from time to
time by the Board of Directors, and no officers shall be prevented from
receiving such salary by reason of the fact the he/she is also a director of
the Corporation. Salaries of all officers of the corporation shall be fixed
by a vote of the Board of Directors.
11. INABILITY TO ACT. In case of absence or inability to act of any
officer of the corporation, the Board of Directors may from time to time
delegate the powers or duties of such officer to any other officer of the
corporation.
12. SURETIES AND BONDS. In the case the Board of Directors shall so
require any officer, employee or agent of the Corporation shall execute to
the Corporation a bond in such sum, and with such surety or sureties as the
Board of Directors may direct, conditioned upon the faithful performance of
his/her duties to the Corporation, including responsibility for negligence
for the accounting for all property, funds or securities of the Corporation
which may come into his/her hands.
13. SHARES OF STOCK OF OTHER CORPORATIONS. Whenever the Corporation is
the holder of shares of stock of any other corporation, any right of power of
the Corporation as such shareholder (including the attendance, acting and
voting at shareholders' meetings and execution of waivers, consents, proxies
or other instruments) may be exercised on behalf of the Corporation by the
President, any Vice President or such other person as the Board of Directors
my authorize.
7
<PAGE>
ARTICLE V
INDEMNITY
1. INDEMNITY. The Corporation shall indemnify its directors, officers
and employees as follows:
Every director, officer, or employee of the Corporation shall be
indemnified by the Corporation against all expenses and liabilities,
including counsel fees, reasonably incurred by or imposed upon him/her in
connection with any proceeding to which he/she may be made a party, or in
which he/she may become involved, by reason of being or having been a
director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or agent
of the Corporation or is or was serving at the request of the Corporation as
a director, officer, employee or agent of the Corporation, partnership, joint
venture, trust or enterprise, or any settlement thereof, whether or not
he/she is a director, officer, employee or agent at the time such expenses
are incurred, except in such cases wherein the director, officer, employee or
agent is adjudged guilty of willful misfeasance or malfeasance in the
performance of his/her duties; provided that in the event of a settlement the
indemnification herein shall apply only when the Board of Directors approves
such settlement and reimbursement as being for the best interests of the
Corporation.
The Corporation shall provide to any person who is or was a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of the
corporation, partnership, joint venture, trust or enterprise, the indemnity
against expenses of a suit, litigation or other proceedings which is
specifically permissible under applicable law.
The Board of Directors may, in its discretion, direct the purchase of
liability insurance by way of implementing the provisions of this Article.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
2. LOANS. No loans shall be contracted on behalf of the Corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or
confined to specific instances.
3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name
of the Corporation, shall be signed by such officer or officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
4. DEPOSITS. All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board of Directors may select.
8
<PAGE>
ARTICLE VII
SHARES OF STOCK
1. CERTIFICATES. Certificates representing share of the corporation shall
be in a form designated by the directors. Such certificates shall be signed
by the President and Secretary. All certificates for shares shall be
consecutively numbered. The name and address of the stockholder, the number
of shares, and date of issue, shall be entered on the stock transfer books of
the corporation. All certificates surrendered to the corporation for
transfer shall be canceled and no new certificates shall be issued until, the
former certificate for a like number of share has been surrendered and
canceled. The exception is the case of a lost or destroyed or mutilated
certificate and in such case a new one may be issued when the person claiming
that certificate is lost or destroyed or mutilated certifies to the
corporation of that fact and indemnifies the corporation.
2. TRANSFER OF SHARES. A transfer of stock shall be made only upon the
transfer books of the corporation kept at the office of the corporation or
of the corporation or so elected held at a Transfer Agent office. Only
registered stockholders in the transfer books of the corporation shall be
entitled to be treated by the corporation as the holders in fact of stock.
The corporation shall not be bound to recognize any equitable or other
claims to or any interest in any share of stock which is not recorded upon
the transfer books of the corporation in a manner prescribed by these By-Laws
except as expressly provided by the laws of the State of Delaware.
ARTICLE VIII
1. FISCAL YEAR. The fiscal year of the corporation shall begin on the
1st day of January in each year and end on the 31 day of December.
ARTICLE IX
1. DIVIDENDS. The directors may from time to time declare and the
corporation may pay, dividends on its outstanding shares in the manner and
upon the terms and conditions provided by these By-Laws.
ARTICLE X
1. SEAL. The directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon, the name ThermaFreeze, Inc.,
and the words "corporate seal."
9
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ARTICLE XI
WAIVER OF NOTICE
1. WAIVER. Unless otherwise provided by law, whenever any notice is
required to be given to any stockholder or director of the corporation under
the provisions of these By-Laws or under the provisions of the Articles of
Incorporation, or under the provisions of the applicable Business Corporation
Act, a waiver thereof in writing signed by the person or persons entitled to
such notice, whether made before or after the time stated thereon, shall be
deemed equivalent to giving of such notice.
ARTICLE XII
AMENDMENTS
1. AMENDMENTS. Alterations or amendments may be made by an affirmative
vote of at least two-thirds of the stockholders in any duly called special or
regular meeting or by a majority of the Board of Directors at any duly called
regular or special meeting.
10
<PAGE>
EXHIBIT 4.1
THERMA FREEZE, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
AUTHORIZED CAPITAL FORTY-MILLION (40,000,000) SHARES COMMON STOCK, $.001
PAR VALUE AND 10 MILLION (10,000,000) SHARES OF PREFERRED STOCK
WITH $.001 PAR VALUE PER SHARE
NUMBER [ ] SHARES [ ]
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP # 883429 10 2
This Certifies That [ ]
Is The Owner of [ ]
FULLY PAID AND NON-ASSESSABLE SHARES OF CAPITAL STOCK OF
THERMA FREEZE, INC.
transferable on the books of the Corporation in person or by Attorney upon
surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are subject to all the provision of the Articles
of Incorporation, to all of which the holder by acceptance hereby assents.
This Certificate is not valid unless duly countersigned by the Transfer Agent.
In Witness Whereof, the said Corporation has caused this Certificate to be
endorsed by the facsimile signature of its duly authorized officer
and to be sealed with the facsimile seal of the Corporation.
Dated:
Seal
s/s Joseph E. Murray
- ------------------------
PRESIDENT and SECRETARY
Stock Transfer Agent:
Countersigned:
UNITED STOCK TRANSFER, INC., (303) 783-9055
3615 South Huron Street, Suite 104, Englewood, CO 80110
BY
---------------------------------------------------
Transfer Agent & Registrar - Authorized Signature
1
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THERMA FREEZE, INC.
United Stock Transfer, Inc.
Transfer Fee: As Required
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - . . . . Custodian. . . .
(Cust) (Minor)
under Uniform Gifts to Minors
Act of
------------------------
(State)
Additional abbreviations may also be used though
not in the above list.
For the value received _____________ hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE [ ]
- ---------------------------------------------------
Please print or type name and address of assignee
- -------------------------- Shares
of the common stock represented by the within Certificate and do
hereby irrevocably constitute and appoint
- ---------------------------
Attorney to transfer the said stock on the books of the within Corporation,
with full power of substitution in the premises.
Dated ---------------- 19 -------
SIGNATURE GUARANTEED: X
--------------------------
X
--------------------------
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERNATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S) MUST BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION (Bank, Stockbrokers, Savings and Loan
Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO S.E.C. RULE 17Ad-15.
2
<PAGE>
EXHIBIT 10.1
AGREEMENT
Agreement made this 15th day of November, 1996, by and between Baseball
Properties, Inc., a Delaware corporation having its principal place of
business at 15 East Putnam Avenue, Greenwhich, CT 06830 ("BP"), and
ThermaFreeze, Inc., a Nevada corporation having its principal place of
business at 776-C Lakeside Drive, Mobile, AL 36693 ("THERMA"), and
Thomas Sullivan, an individual living at 7 Sparrow Lane, Greenwich, CT,
06830 ("TS").
WITNESSTH
WHEREAS, TS desires to acquire and BP owns and desires to sell and
transfer to TS all of Its assets in exchange for TS acceptance of all
the outstanding liabilities of BP.
WHEREAS, BP desires to acquire and THERMA owns and desires to sell and
transfer to BP, all of its assets subject to liabilities, in exchange for
4,800,000 shares of BP authorized but unissued common stock upon the terms
and conditions set forth herein and the parties hereto desire to adopt the
Plan of Reorganization such that it qualifies under Section 368 of the
Internal Revenue Code.
WHEREAS, the parties have executed a Memorandum dated October 18, 1996,
which defines the respective rights and obligations of the parties hereto
but is superseded in its entirety by this definitive Agreement among the
parties.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN CONTAINED,
THE PARTIES AGREE AS FOLLOWS:
BP's Representations and Warranties. BP represents and warrants as follows:
(a) BP is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has the corporate power to own
its properties and to carry on its business as now being conducted. The
nature of the business now being conducted by BP, the character of the
properties owned by it, or any other state of facts, does not require BP
to be qualified to do business as a foreign corporation in any jurisdiction.
(b) Capitalization. The total authorized capital stock of BP consists of
20,000,000 shares of common stock, $.001 par value. There will be no
outstanding subscriptions, options, warrants, agreements or other
commitments or rights of any type to purchase or acquire any securities
of BP which are convertible into or exchangeable for any shares of capital
stock of BP.
1
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(c) Authority: The Board of Directors voted unanimously for the
following Resolutions::
(i) Accept the offer of TS to purchase from BP all of the
assets, including the two baseball teams, as of
November 14, 1996, in consideration. TS would, assume
all outstanding Liabilities of BP as of November 14, 1996.
(ii) Accept the offer of Therma to sell all of its assets,
including its name, THERMAFREEZE, INC., in
consideration of BP assuming all outstanding liabilities
of Therma, as of November 15, 1996 (per Schedule A, attached).
(e) Accept, as of November 15, 1996, the resignation of Thomas Sullivan
as President of BP .
(f) Joseph Murray will be elected President of BP on November 15, 1996.
(g) BP will not purchase and otherwise provide or arrange funding for any
entity whose business is competitive with or similar to the present
business of THERMA.
(h) BP will not take, agree to take, or knowingly permit to be taken, any
action, or do, or knowingly permit to be done, anything in the conduct
of its business, or otherwise, which would be contrary to or in breach
of any of the terms or provisions of this Agreement, or which would
cause any of the representations of BP contained herein to be or become
untrue in any material respect at the Closing Date.
(i) Representations True: Covenant Performed. The representations and
warranties by BP shall be true and correct, as of the Closing Date,
with the same force and effect as though such representations
and warranties had been made on the Closing Date, and all terms and
conditions and covenants of this Agreement complied with and performed
by BP on or before the Closing Date shall have been duly complied with
and performed.
(j) No Material Adverse Change. The business and properties of BP shall
not have been materially adversely affected in any way as a result
of fire, accident or other casualty (whether or not covered by
insurance) any labor disturbance, or act of God, public authority or
public enemy, which would interfere in any substantial manner with
the operations of BP.
2
<PAGE>
(k) No Violation of Agreements. The consummation of this Agreement shall
not violate any Agreement or instrument to which BP is a party or is
subject.
(l) Conflict or Default. BP cannot provide support or proof that this
contract would not be in conflict or default with some statute,
regulation or ordinance of some governmental authority, or conflict
which may result in breach of any term, condition or provision of the
Certificate of Incorporation of BP or of any Agreement, deed,
contract, mortgage, indenture, writ, order, decree, legal obligation or
instrument to which BP is a party or by which it or may be bound, or
constitute a default thereunder, or encumbrance, or restriction of any
nature whatsoever with respect to the properties or assets of BP, or
give to others any interest or rights, Including rights of termination,
acceleration or cancellation in or with respect to any of the
properties, or assets, contracts or business of BP.
(m) Litigation. There are no actions, suits, investigations, or
proceedings pending of material nature, or to the knowledge of BP, the
performance of the terms and conditions hereof, or the consummation of
the transactions contemplated hereby in any court or by or before any
governmental body or agency, including any claim, proceeding or
litigation for the purpose of challenging, enjoining or preventing the
execution, delivery or consummation of this Agreement; and BP does not
know of any state of facts which would give rise to any such action,
suit, investigation or proceeding. BP is not subject to any order,
judgement, decree, stipulation or consent or any agreement with any
governmental body or agency, which affects or may affect its business
operations. Reports.
(n) BP common stock is traded on the OTC Bulletin Board and is listed
under the symbol THFZ.
3
<PAGE>
2. THOMAS SULLIVAN Representation and Warranties: TS represents and warrants
follows:
(a) TS is an individual person, and is acting on his own behalf in this
transaction.
(b) TS has been employed as the President of BP since its inception in
May, 1995.
(c) As the President of Baseball Properties, TS has agreed with the BP
Board of Directors that the stockholders of Baseball Properties
would be better served by BP withdrawing from the business of
managing Minor League Baseball Teams, and concentrating upon the
potential of the product that is being acquired from Therma by BP.
(d) TS does have the expertise and desires to continue in the operation
of Minor League Baseball Teams.
(e) Subject to the terms and conditions of this AGREEMENT, TS agrees to
buy from BP on Closing Day (later defined) all of the assets of BP
including the equity which BP holds in two teams, Albany Diamond
Dogs and Johnstown Steal. TS in consideration of receiving these
assets will take over all of the outstanding liabilities of BP exist
prior to BP acquisition of Therma Asset and Liabilities. Exhibit B
more fully describes both the assets and the liabilities that are
involved in the transfer from BP to TS.
(f) At the end of Closing Day, TS will resign as President of BP and will
cease to be an employee of BP.
(g) TS agrees to file all Tax Returns that have not been filed by BP
during its period of operation that began in May 1995 to the date of
November 15, 1996. This will includes all Payroll Tax Returns, all
Sales Taxes Return, and Franchise Tax Returns due to any City,
County, State, and Federal Governments.
(f) In the event that there is any assessment for unpaid tax, penalty, or
interest, TS agrees to accept the liability as his personal debt, and
will by paid by him.
(g) TS guarantees to protect from liability or loss to BP, or any of its
future officers, as a result of delinquency in filing, or payment, of
any Tax Returns due to any governmental agency for the period of
operation of BP from May 1995 to November 15, 1996.
(h) TS agrees to provide BP with a complete set of Accounting Records;
General Ledger, Books of Original Entry , Bank Statements, and copies
of Tax Returns for all Governmental Agencies for every period of
operation of BP from May 1, 1995 to November 15, 1996.
4
<PAGE>
(i) TS represents that, to his knowledge, there are no suits,
investigations, or proceedings pending of material nature against
either BP or TS that would prevent the performance of the terms and
conditions of this AGREEMENT, TS is not subject to any order,
judgement, decree, stipulation or consent or any agreement with any
governmental body or agency, which affects or may affect TS in the
future operation of the management of the Minor League Teams that
he will obtain from BP as a result of this AGREEMENT.
(j) TS cannot provide support or proof that this contract would not be in
conflict or default with some statute, regulation or ordinance
of some governmental authority which may result in breach of any
term, condition or provision of the Certificate of Incorporation
of BP or of any Agreement, deed, contract, mortgage. indenture,
writ, order, decree, legal obligation or instrument to which BP
is a party or by which it or may be bound, or constitute a default
thereunder, or encumbrance, or restriction of any nature whatsoever
with respect to the properties or assets of BP, or give to others
any interest or rights, including rights of termination, acceleration
or cancellation in or with respect to any of the properties; or
assets, contracts or business of BP.
(k) On Closing Date TS shall deliver copies of AGREEMENT to BP and
to Therma, dated and signed.
5
<PAGE>
THERMA'S Representation and Warranties. THERMA represents and warrants and
agrees as follows:
(a) THERMA is a corporation duly organized, validly existing and in good
standing under the laws of the state of Nevada and has the corporate
power to own its property and to carry on its business as now
conducted.
(b) THERMA has no wholly owned subsidiaries or affiliates as that term is
used in the regulations promulgated under the Securities Act of 1933,
as amended (the "ACT").
(c) THERMA has total authorized capital stock of 20,000,000 shares of
common stock, $.001 par value and 5,000,000 Preferred stock, $.001
par value. There are 4,800,000 shares of Common Stock issued. All of
these shares are duly and validly issued, fully paid and non-
assessable.
(d) THERMA has furnished to BP an unaudited financial statement and notes
thereto as of November 15, 1996, attached hereto as Exhibit A, is
a true, correct and complete copy thereof. The financials have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis and fairly present the financial
condition of THERMA as of the date of November 15,1996.ince November
15, 1996 there has been no material adverse change in the business
or financial condition on the operations of THERMA, or to the best
knowledge of THERMA, any occurrence circumstance, or combination
thereof which reasonably could be expected to result in such a
material adverse change in the future.
(e) As of the date hereof, there are no material liabilities, absolute or
contingent, of THERMA that were not shown or reserved against on the
balance sheet included in the financial statement or described in the
notes thereto.
(f) Exchange of consideration between THERMA and BP. Subject to the terms
and conditions hereof, Therma agrees to transfer to BP on the Closing
Date (as hereinafter defined) and BP agrees to accept from
THERMA on the Closing Date, all of its assets, including its
corporation
name, subject to liabilities, as more fully set forth and described in
Exhibit A. All of the outstanding shares of the THERMA shall be
cancelled. BP will issue though its transfer agent, Interstate
Transfer Company, Inc. 4,800,000 shares of BP Common Stock
(g) On Closing Date there will be no outs1anding subscriptions, options,
warrants, contracts, calls, puts, kind or nature to purchase or acquire
any securities of THERMA common stock; and THERMA has no obligation
of any kind to issue any additional securities.
6
<PAGE>
(h) For each of the assets listed in Exhibit A, THERMA has full legal
title to all such assets, free and clear of any liens, encumbrances,
security interests, pledges, charges, claim, voting trusts,
restrictions on transfer and any rights or interests therein,
direct, direct or contingent, in favor of any parties, except as
otherwise disclosed herein. Therma warrants that it has full and
unrestricted right, power and authority to sell, assign, transfer
and deliver the same or to cause the same to be transferred to BP
in accordance with this AGREEMENT
(i) THERMA conducts all phases of its business in substantial compliance
with all leases, any restrictions of record and all zoning, fire,
safety, building, pollution, environmental control, food, drug and
health codes and other laws, ordinances and requirements of every
governmental authority applicable to the ownership, operation or
other use of such assets and properties.
(j) THERMA has filed or caused to be filed with the appropriate federal,
state, county, local and foreign governmental agencies or
instrumentality, all tax returns and tax reports required to be
filed, and all taxed assessments, fees and other governmental
charges have been fully paid when due, except as may be reserved
for in the November 15, 1996 statement. There is no pending or,
to the best knowledge of THERMA, threatened federal, state or
local tax audit of THERMA; there is no agreement with any federal,
state or local taxing authority that may affect the subsequent tax
liabilities of THERMA.
(k) No Conflict or Default. Neither the execution or the delivery of this
agreement, nor compliance with the terms and provisions hereof,
including without limitation the consummation of the transactions
contemplated hereby, will violate any statute, regulation or ordinance
of any governmental authority, of conflict with or result in the
breach of any term, condition or provision of the Certificate of
Incorporation or by-laws of THERMA, or any agreement, deed, contract,
mortgage, indenture, writ, order, decree, legal obligation or
instrument to which THERMA is party or by which it or any of its
respective assets or properties are or may be bound, or constitute
a default thereunder, or result in the creation or imposition of
any lien, charge, encumbrance or restriction of any nature
whatsoever with respect to the properties or assets of THERMA, or
give to other any interests or rights, including rights of
termination, acceleration or cancellation in or with respect to
any of the properties, assets, contracts or business of THERMA.
(l) No dividend shall be declared or paid or other distribution
Neither in cash, stock, property or any combination thereof) or
7
<PAGE>
payment declared or made in respect of THERMA common stock, nor
shall THERMA purchase, acquire or redeem or split, combine or
reclassify any shares of its capital stock.
(m) No change shall be made in the number of shares of authorized or
issued THERMA common stock, nor. shall any option, warrant call,
right, commitment or agreement of any character be granted or
made by THERMA relating to its authorized or issued common stock;
nor shall THERMA issue, grant or sell any securities or obligations
convertible into exchangeable for shares of THERMA common stock.
(n) Representations True: Covenants Performed. The representations
and warranties of the THERMA shall be true and correct, as of the
Closing Date, with the same force and effect as though such
representations and warranties had been made on the Closing Date,
and all terms and conditions and covenants of this Agreement to
be complied with and performed by THERMA on or before the Closing
Date shall have been complied with and performed.
(o) No Material Adverse Change. The business and properties of THERMA
shall not have been adversely affected in any material way as a
result of any fire, accident, or other casualty (whether or not
covered by insurance) any labor disturbance, or act of God, public
authority, or the public enemy, which would interfere in any
substantial manner with the operations of THERMA. There shall
have been no changes in the business or property or THERMA
since the date hereof, or in the financial conditions of THERMA
since November 15, 1996; which would have a material adverse
effect on its business.
(p) No Litigation Threatened. No inquiry shall have been received nor
any investigation, action or proceeding shall have been instituted
or threatened by any governmental agency regarding the transaction
contemplated hereby.
(q) Brokerage. THERMA have not been represented with respect to
transaction by a broker, finder or similar person and no compensation
of any kind is due for such services.
(r) On Closing Day, THERMA shall deliver a copy of AGREEMENT signed
by the President of THERMA and dated.
8
<PAGE>
4. Investment Representations. THERMA and on behalf of its shareholders
who may acquire BP's shares hereunder acknowledges, represents, warrants and
agrees that:
(a) The Shareholder is acquiring the BP common stock pursuant to this
Agreement for his own account for investment purposes only and has
no present intention to sell, distribute or otherwise dispose of
the shares acquired hereunder.
(b) The Shareholder is executing this Agreement and all other documents
in connection with the receipt of BP common stock as an inducement
to BP to acquire THERMA assets and BP may rely on such documents and
information contained therein to determine the qualifications of
THERMA to acquire the BP common stock.
(c) The Shareholder acknowledges being informed that BP'S common stock
issued hereunder is not registered under the Act or any state
securities law and it must be held indefinitely unless it is
subsequently registered under the applicable federal and state law
or he furnishes to BP an opinion of counsel that registration is
not required under the ACT and such information will be set forth
in the restrictive legend on the face of the certificate(s) to be
issued to THERMA.
9
<PAGE>
5. Closing.
The Closing shall take place on or about November 15, 1996, or as may
otherwise be mutually agreeable to parties. At the Closing, BP will cause
to be issued and delivered to the THERMA, a stock certificate in the
amount of 4,800,000 common shares of BP. Therma will deliver to BP a
fully executed BILL OF SALE with a complete schedule of, all its assets
acquired hereunder.
(a) Nonassignability. Neither this Agreement nor any rights and obligations
hereunder may be assigned by any party without the written consent of the
other.
(b) Entire Agreement. This instrument together with the attached Exhibits
contains the entire Agreement among the parties with respect to the
purchase and sale of the securities described herein and other transactions
contemplated hereby.
(c) Amendment. This Agreement may be amended or modified only by a
writing signed by the party or parties to be charged with such amendment or
modification.
(d) Access. Prior to the Closing, THERMA shall afford to the Officers,
Directors Attorneys, Accountants and other authorized representative(s)
of BP free full access to the premises, books, and records of THERMA in
order that BP may take such investigation as it may desire of the affairs
of THERMA. Prior to Closing, BP shall afford the Officers, Directors
Attorneys, Accountants and other authorized representative(s) of THERMA
free and full access to the premises, books and records of BP so that
THERMA may take such investigation as it may desire of the affairs of BP.
(e) Materiality: Survival. All covenants, agreements, representations
and warranties made herein and in any, certificate delivered at the
Closing or pursuant thereto, shall be deemed to be material and have
been relied upon by the parties hereto, notwithstanding any
investigation heretofore or hereafter made or omitted by such other
party or in its behalf and shall survive the Closing hereunder.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be hand delivered or mailed first class postage prepaid,
to any party at the address set forth ,in the first paragraph of this
Agreement.
(g) Binding on Successors. All of the terms and conditions of this
Agreement shall be binding upon the Successors and inure to the benefit
of the parties hereto and their respective heir, successors, assigns and
legal representatives.
10
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(h) Severability. The unenforceability or invalidity of any provision
of this Agreement shall not affect the enforceability or validity of the
balance of the Agreement.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the disputes arising
hereunder shall be submitted to and settled by arbitration in accordance
with the rules of the American Arbitration Association.
(j) IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first written above.
BP BASEBALL PROPERTIES, INC.
Attest:
- -------------------------- By: s/s Thomas J. Sullivan
----------------------
- -------------------------- Thomas J. Sullivan, President
Secretary
THERMA
Attest: THERMAFREEZE, INC.
s/s Thos Pryor By: s/s Joseph C. Murray
- -------------------------- --------------------------
THOMAS PRYOR Joseph Murray, President
- --------------------------
SULLIVAN
By: s/s Thomas J. Sullivan
----------------------------
Thomas J. Sullivan, an Individual
11
<PAGE>
EXHIBIT 10.2
AGREEMENT
AGREEMENT made this 20th day of November, 1996, by and between THERMAL
PRODUCTS, INC., a company organized under the laws of the State of Nevada
whose principal place of business is presently located at 9608 Donna Avenue,
Northridge, CA 91324, hereinafter referred to as ("Licensor") and
THERMFREEZE INCORPORATED, a company organized under the laws of the State
of Delaware whose principal place of business is presently located at
776 LAKESIDE DRIVE, MOBILE, AL 36693, hereinafter referred to as ("Licensee").
WITNESSETH:
WHEREAS, the Licensor is the manufacturer of a product known as
ThermaFreeze ("ThermaFreeze") and is also the registered
Proprietor in the USA of registered trade marks and any unregistered trade
marks ("Trade Marks") all of which are more fully described in Schedule A,
attached hereto and made a part hereof;
WHEREAS, the Licensor is the registered holder has the right to
license, rent, and otherwise utilize the presently existing Patents and
recently filed Patent Applications, all of which are more fully described in
Schedule B, attached hereto and made a part hereof;
WHEREAS, ThermaFreeze is an integral component in a method developed by
the Licensor for the packaging, shipping and delivery of perishable
products, hereinafter referred to as the ("System"), which System is more
fully described in schedule C, attached hereto and made a part hereof;
WHEREAS, Licensor owns the worldwide rights to the System and desires
to license the System throughout North America, including
Canada, the 50 states of the United States, Mexico and Central America,
hereianafter referred to as the ("Territory");
WHEREAS, the Licensee desires to obtain an exclusive license to
exploit the System throughout the Territory and to use the Trade Marks,
Patents and Patent Applications in connection therewith during the term of
this Agreement;
WHEREAS, the Licensor has agreed to license the System to the
Licensee and permit Licensee to utilize the Trade Marks, Patents and
Patent Applications in connection with such license.
NOW, THEREFORE in consideration for the mutual promises, covenants
and considerations set forth herein, the parties hereby agree as follows;
1. PERMISSION TO USE.
- -----------------
In consideration for the payment by the Licensee of the initial
license fee as set forth in Paragraph 2 herein and the royalties due as
set forth in Schedule D herein and subject to compliance by the
Licensee with the various terms and conditions of this Agreement, the
Licensor hereby
1
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
grants to the Licensee, the sole and exclusive right to exploit the
System in the Territory during the term of this Agreement.
2. INITIAL LICENSE FEE.
--------------------
In consideration for the grant. by the Licensor to the Licensee of the
exclusive license to exploit the System throughout. the Territory,
the Licensee will issue to the Licensor, a total of 5,000,000 shares of
its authorized but unissued preferred stock.
3. ROYALITIES.
-----------
In consideration for the rights granted to the Licensee herein, the
Licensee shall pay to the Licensor throughout the term of this Agreement,
a royalty at the rate more fully described on Schedule D attached hereto
and made a part hereof.
3.1. Within 30 days of the last day of September, December, March
and June throughout the term of this Agreement, the Licensee shall deliver to
the Licensor, a detailed statement of account, certified as correct by a
director of the Licensee, which statement shall set out the details
of all goods sold or otherwise disposed of during the preceding quarterly
period, the sales value thereof and the royalty accrued during such period and
verified by commercial invoices, corresponding packing slips and
bills of lading.
3.2. Payment in full of the royalty shall be paid to Licensor as
specified in Schedule D.
3.3. All sums payable by the Licensee to the Licensor hereunder,
shall be paid in full in US currency or irrevocable letter of credit,
without set off or counterclaim. In the event that the Licensee is
compelled by law to make any deduction or withholding from any payment to
the Licensor then the Licensee shall promptly send to the Licensor an
official receipt evidencing such deductions together with such other
documentation as the Licensor may require in making submissions to any
revenue authorities. The parties shall cooperate in all reasonable respect.
necessary to take advantage of any double taxation agreements as may be
available.
3.4. For the purposes of calculating the royalty, the sales value of
the goods and materials shall be the FOB price paid by the Licensee for
the goods at the point of manufacture (Mobile, Alabama).
3 5. The Licensee shall, through the term of this Agreement and for
a period of 5 years thereafter, maintain detailed and separate written
accounts and records containing all such data and information with
respect to its sale of goods and materials as may reasonably be required
to properly verify the statements of account and royalty payments provided
for herein.
3.6. Any duly authorized professional agent or employee of the Licensor
shall, upon reasonable notice, have the right during normal business
hours, at the Offices the Licensee, to examine Licensee's records
for the sole purpose of verifying the accuracy of the royalty
2
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
payments Licensor shall be entitled, at its own expense, to make copies of
any relevant records for such purpose or generally to verify compliance
with other provisions of this Agreement.
3.7. The Licensee agrees to cooperate with the Licensor and/or its
representatives in providing all such further information as may be
necessary or proper to enable the amount. of royalties or payments
under this Agreement to be ascertained.
3.8. The Licensee shall pay all of the Licensor's cost of any examination
where such examination reveals an underpayment of royalties by
the Licensee of 10% of the total amount of royalties actually due for the
period in question.
3.9. For the purposes of calculating royalty payments due hereunder, all
goods and materials shall be deemed to have been purchased upon the
issuance of a bill of lading or other similar evidence of delivery ,
FOB the Licensor's facility in Mobile Alabama.
4. MINIMUM ROYALTIES.
-----------------
There shall be no minimum royalty requirement for the Licensee to
maintain territory exclusivity.
5. TERM.
-----
Subject to the mutual compliance with the various terms and conditions
set forth herein, this Agreement shall commence on the date hereof for a
term of 20 years or the expiration, subject to renewal, of the most
recently issued patent as described on Schedule B, whichever is
later.
6. STANDARDS OF QUALITY AND PRODUCTION.
------------------------------------
The exclusive license from the Licensor to the Licensee and the
accompanying right to use the Trade Marks, Patents and Patent
Applications in connection with the marketing of the System, is granted
subject to (i) the Licensee's purchase of all of the goods which shall be
solely manufactured and or acquired by the Licensor for sale to the
Licensee to insure Compliance with all specifications and directions
regarding the use of the System such that the standard of quality of the
goods and materials sold in the Territory shall be maintained, or (ii) that
all goods and materials manufactured or supplied by manufacturers other than
the
Licensor are previously approved in writing by the Licensor to be in
Compliance with said specifications and directions for optimal performance
of the System.
6.1. Any defect. in the goods and materials shall be handled accordance
with the policies of the Licensor as provided to Licensee.
7. RIGHTS RESERVED TO THE LICENSOR.
- --------------------------------
Nothing in this Agreement shall restrict the right 0f the Licensor
from exploiting the Trade Marks, Patent and Patent Applications employed
in the System for use outside the Territory.
3
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
However, the Licensee will have the right to an ownership participation
opportunity of up to 25% of the Licensor's participation in exploitation
outside the Territory of a manufacturing facility to produce dry-non
hydrated-and-frozen ThermaFreeze refrigerant. In addition, the Licensee
will supply the dry-non-hydrated-and-frozen ThermaFreeze refrigerant at the
then current. published price list FOB Mobile, Alabama, until such time as
this non territory production facility might be established.
8. TITLES AND GOODWILL OF TRADE MARKS PATENTS AND PATENT APPLICATIONS.
----------------------------------- -------------------------------
The Licensee recognizes that the Licensor is the owner and or has the
right to use the Trade Marks, Patents and Patent Applications and agrees
that the Trade Marks, Patent and Patent Applications shall remain vested
in the Licensor or its successors in title both during the term of this
Agreement and thereafter.
8.1. Any goodwill derived by the Licensee by reason of the use of the
System and each of the Trade Marks, Patent and Patent Applications shall
accrue to the Licensor whether arising at common law or otherwise and
the Licensor or its successors in title may request an assignment thereof
at no expense to the Licensee.
8.2. The Licensee shall not apply any of the Trade Marks, Patents or
Patent Applications to any goods, materials or systems that infringe or
are likely to infringe upon the intellectual property rights of any
third party in the Territory.
9. PROTECTION OF TRADE MARKS, PATENTS AND PATENT APPLICATIONS.
-----------------------------------------------------------
The Licensee hereby undertakes to the Licensor as follows:
9.1. At all times during the term of this Agreement and after the
termination thereof, to acknowledge the ownership of the Licensor
in the Trade Marks, Patent and Patent Applications and not claim the
ownership thereof.
9.2. Not without the express prior written consent of the Licensor to
assign, charge, lease, sub-license or in any way make over such right
and/or benefits or any of them as are conferred upon or accepted by the
Licensee in this Agreement except as may be provided in Paragraph 15
herein.
9.3. To observe all laws of the Territory as to the marketing,
packaging, shipping, delivery, advertising, promotion, distribution,
sale or use of the System.
9.4. To indemnify and hold harmless the Licensor against all claims
and damages of whatever nature as may be brought or made against the
Licensee or the Licensor (whether separately or as joint defendants)
in respect of any failure on the part of the Licensee to observe any
of the laws of the Territory relating to the marketing, packaging,
shipping, delivery, advertising, promotion, distribution, sale or use of
the System.
4
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
9.5. Further to indemnify and hold harmless the Licensor against all
claims in respect of any injury to any person or to property as may
arise from the packaging, shipping and delivery of the System.
9. 6. To observe and accept the following restrictions and
obligations:
(a) Not to be concerned in the filing of any Patents or in the registration of
any trade marks in any way resembling or colorably similar to the Trade
Marks, Patents and Patent Applications in connection with the use of the
System.
(b) To use the Trade Marks, Patent and Patent Applications
exclusively in connection with the use of the System and to apply the
Trade Marks, Patent and Patent Applications in the manner approved by
the Licensor to all such goods and materials without exception.
(c) Not without the prior written consent of the Licensor, to apply
to the System or any component thereof, any marks other than the
Trade Marks, Patents and Patent Applications as described herein and
neither to alter nor deface the Trade Marks, Patents and Patent
Applications in any manner whatsoever.
(d) Not to use in connection with the sale of the System any Trade
Marks, Patent or Patent Applications which in any way resembles the
actual Trade Marks, Patent and Patent Applications applied to the System or
its packaging or presentation for sale.
(e) If reasonably requested by the Licensor at Licensor's expense,
from time to time, to include in its advertisements, both print. and media,
and on the goods and materials or the labels or containers used in
connection with the sale of the system, a notice to the effect. that the
Trade Marks, Patent and Patent Applications and each of them are the
Trade Marks, Patent and Patent. Applications of, or otherwise controlled
by, the Licensor or its successors in title.
9.7. To Warrant that:
(a) To the best of the knowledge, information and belief
of the Licensee, the use of the Trade Marks, Patents and Patent
Applications in connection with the System to be marketed by the
Licensee in the Territory will not infringe the right of any third party
and the Licensee has the power to enter into this Agreement without
infringing upon any existing laws or agreements.
(b) All information furnished by the Licensee to the Licensor in
connection with this Agreement was and remains true, accurate and complete
in all material respects and there is no other fact or circumstance known
to the Licensee relating to this Agreement or its affairs which has not.
been disclosed to the Licensor, the omission of which would make any of
such information misleading.
10. INFRINGEMENT OF TRADE MARKS PATENTS AND PATENT APPLICATIONS.
------------------------------------------------------------
5
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
10.1. The Licensee shall immediately give written notice to the
Licensor of any infringement or threatened infringement of any Trade Mark,
Patent or Patent Application, which comes to the Licensor's attention.
The Licensee shall (at the Licensor's cost and expense) give such
assistance as may be requested by the Licensor to assist the Licensor in
the prevention of any such infringement but the Licensee shall not institute
any legal proceedings or issue any warnings or in any way attempt to prevent
the alleged infringement without the Licensor's prior written consent.
10.2. The Licensee shall further inform the Licensor of any allegation of
infringement of Trade Marks, Patent and Patent Applications or any alleged act
of
passing off in the sale of the system that may be made by any third party
within the Territory but the Licensee shall not take any further action in
respect of such allegation.
10. 3. Nothing in this Agreement shall have the effect of requiring the
Licensor to institute any legal proceedings in respect to the Trade Marks,
Patents and Patent Application.
11. INTELLECTUAL PROPERTY RIGHTS.
-----------------------------
Notwithstanding any other provision of this Agreement, the Licensee
hereby acknowledges in the Licensor, exclusive, irrevocable, worldwide,
transferable and royalty free right and license (including the
right to grant sub-licenses) of all rights (including intellectual
property right) that the Licensor may have in the design and/or shape
of the System:
11.1. Any new designs, improvements, whether or not the subject of
Patents or Patent Applications, developed by the Licensor during the term
of this Agreement, shall be subject to the license granted to the
Licensee under this Agreement.
12. PROMOTION OF THE SYSTEM.
-----------------------
The Licensee shall at all times use its best efforts to promote
and extend the sales and use of the System in the Territory and in
particular,
12.1. Shall spend in each year in the Territory, a reasonable
amount on advertising and promoting the System;
12.2. Shall provide the Licensor with copies of its up-to-date
price lists and customer lists from time to time for the System;
12.3. Licensee shall be responsible for the production and
associated expenses for a catalog describing the use and
benefit of the System;
12.4. Licensee has total responsibility for any expenses involved
in any trade shows, sales meetings and other similar event involved in
the promotion and sale of the System.
13. REPRESENTATIONS AND WARRANTIES OF THE LICENSOR.
-----------------------------------------------
The Licensor, hereby represents and warrants to the Licensee that:
6
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
13.1. It will not seek to execute any other license agreements with
other potential licensees that may be competitive to the Licensee
provided only that the Licensee remain in full compliance with the
terms and conditions of this Agreement;
13.2. It will defend the existing Trade Marks, Patents and Patent
Applications, as well as other filings that may be made during the
term of this Agreement, against any and all claims by third parties
and will reimburse and indemnify the Licensee against any and all
expenses it may suffer by virtue of such claims;
13.3. It will not contact or interact in any way with Licensee's
customers unless requested to do so;
13.4. It will stand behind the quality, safety and fitness for
use of the System and all components thereof;
13.5. It has the full corporate power and authority to enter
into this Agreement and it has the full right, title and interest in and
to the System and all components thereof that form the basis of the
exclusive license.
14. REPRESENTATIONS AND WARRANTIES OF THE LICENSEE.
-----------------------------------------------
The Licensee, hereby represents and warrants to the Licensor that:
14.1. It will allow full access to Licensor and its duly authorized
agents and representatives for the purpose of examining the relevant
books of account to verify the accuracy of the royalty payments
due hereunder;
14.2. It will make all royalty payments due to the Licensor on a
timely basis and will generally remain in compliance with all of
the terms and conditions of this Agreement;
14.3. It will immediately disclose any potential or actual improvements to
the System or any component thereof to the Licensor;
14.4. It will provide to the Licensor prior to its public
dissemination, any and all marketing, advertising, promotional or
technical materials for Licensor's approval;
14.5. It will use its best efforts and abilities to promote
the sales and marketing of the System throughout the Territory;
14.6. It will neither assign, sublease nor otherwise transfer the
rights and obligations of this Agreement to any third party without the
prior written consent of the Licensor;
14.7. It will keep confidential all of the technical information, know how,
trade secrets and the like and only disclose such information in
connection with the sale of the Systems in the Territory and within the
spirit of this Agreement;
14.8. It will comply with proper business practices in all of its
sales practices/including advertising, marketing, promotional,
billing and service in connection with the exploration of the
exclusive license;
7
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
14.9. It will seek to hire, as soon as practicable, qualified
managerial, sales, marketing, technical and financial personnel to
properly and efficiently conduct its business;
14.10. It will require that all of its technical, sales and marketing
personnel receive the appropriate training.
14.11. It will, at no cost to Licensor, make available to the Licensor
and any of its licensees, sub-licensees, distributors, and sub
distributors, any and all research and development, materials,
technical data, test results, product information and the like that the
Licensee may acquire during the term of this Agreement, provided,
however, that any such data, information or materials shall not be made
available, either directly or indirectly, to any potential competitor
of the Licensee.
14.12. It has the full corporate power and authority to enter
into this Agreement with the Licensor and nothing contained herein will
violate any existing agreement to which the Licensee is a party.
14.13. It will secure the appropriate insurance coverage in sufficient amount
to protect the Licensee, its customers and the Licensor, from any and all
claims, causes of action, damages and or injuries resulting from the
use of the System in the Territory.
15. PROTECTION OF LICENSE RIGHTS.
-----------------------------
It is the intention of the parties hereto, that the right of the
Licensee to exploit the System in the Territory, provided
Licensee remains in compliance with this Agreement, shall survive the
inability of the Licensor, for whatever reason, to comply with its
obligations hereunder. Therefore:
15.1. Licensee shall have the right, at its expense, to file
with any state or local government agency or authority, where and if
appropriate, notice of its interest in and to the System as the exclusive
Licensee and its right to utilize the existing and any future Patents,
Patent Applications, Trade Marks and Trade Names, know how, trade secrets,
technical expertise and the like, to continue its business in the event
that the Licensor is in default of this Agreement.
15.2. In the event. that the Licensor is either unable or unwilling
to fulfill its obligations hereunder to deliver the System or any component.
Thereof for sale by the Licensee in the Territory, the Licensee shall have
the right to utilize the present and any future Patent, Patent Applications,
Trade Marks and Trade Names and the know how, trade secrets and technical
Expertise that form the basis of this license, to pursue its business in
the Territory, including, but not limited to, the right to build
or cause the construction of the machinery necessary to create and
market the System in accordance with this Agreement.
16. TERMINATION.
------------
8
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
As previously set forth herein in Paragraph 5, this Agreement shall
have a term of 20 years from the date hereof or the expiration date
of the most recently filed Patent application by either the Licensor or
Licensee, whichever is longer. This Agent, however, may be terminated
by either party prior to its expiration, upon the following terms and
conditions:
16.1. Should the Licensee fail to pay any royalties due, within the
specific time for payment and any extension thereof, then the
Licensor, by written notice to Licensee, shall be entitled either to
cancel the License in its entirety or terminate the exclusive nature of
this License and Licensor would then have the absolute right to appoint
one or more nonexclusive Licensees within the Territory.
16.2. Should the Licensee be convicted of engaging in any fraudulent.
or deceptive practices in the sales and marketing of the System throughout
the Territory or any crime that would materially and negatively impact
on its ability to sell and market the System, the Licensor shall have
the option of terminating the License or revoking its exclusivity such that
it will be able to appoint other non-exclusive licensees in the Territory.
16.3. Should there be a change in the ownership or control of the
Licensee such that the Licensee would thereafter be owned or
controlled by a party selling products in the Territory that
competes, directly or indirectly, with the System.
16.4. If either party should be in breach of any provision of this
Agreement and shall fail to remedy the same within 30 days after
notice in writing of the default from the other party, or shall have a
winding-up order made against it or have a receiver or administrator
appointed or seek the protection of the Federal Bankruptcy statutes,
the other party shall have the right to terminate this Agreement forthwith,
upon written notice.
16.5. The failure by either party to terminate this Agreement on
account of any default or breach by the other shall not be taken to
constitute a consent to or waive of the same or any other default
or breach by the other.
17. EFFECT OF TERMINATION.
----------------------
On termination of this Agreement whether by breach or by expiration
of the term, the Licensee shall:
17.1. During the 6 month period following termination, make delivery of
all orders for the System unfulfilled at. the date of termination and
then sell all such goods and materials in the Territory at prices
not materially lower than those charged immediately prior to the
date of termination and the Licensee shall continue to account to the
Licensor for royalties and at the end of such period, the Licensor shall
be entitled to purchase from the Licensee, any and all unsold goods.
17.2. As soon as practicable, cause all entries in published
material such as telephone, street or other directories to be removed and
shall cause all stationery, advertisements, signs on buildings or vehicles
and the like
9
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
to be changed or expunged so as to eliminate any reference to the
Licensor, its Trade Marks, Patents and Patent Applications.
17.3. Not use the Trade Marks, Patents, Patent Application or any
trading style or trade names or the like of the Licensor for goods,
which are similar to or so nearly resemble the Trade Marks, patents
and Patent Applications, or any of them as would or might be likely
to cause confusion or deception with the Licensor's System.
17.4. Termination of this Agreement shall not act so as to prejudice
the right. of either party against the other as shall have accrued at
the date hereof.
18. CONFIDENTIALITY.
----------------
Each of the parties hereby agrees and undertakes with the other to
observe strict confidentiality as to the affairs of the other as may
come to its knowledge in the course of this Agreement and to keep such
information safe and protected against theft, damage, loss or access by
unauthorized persons. The provisions of this Paragraph shall survive the
termination of this Agreement.
19. GOVERNING LAW AND JURISDICTION.
-------------------------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada and it is irrevocably agreed that the Courts
of Nevada are to have jurisdiction to settle any disputes which may arise
out of or in connection with this Agreement.
20. COMMUNICATIONS.
- ---------------
All notices and other communications required to be served hereunder
shall be in writing and sent by registered mail, next day delivery or facsimile
transmission, to the registered office or principal place of business of the
party intended to receive any such communication and shall be
deemed to have been so served on the fifth day after proof of posting
(where sent. by registered mail) and on the next working day (where sent by
facsimile or next day delivery).
If to the Licensor:
John Herlihy, President
Thermal Products, Inc.
9608 Donna Avenue
Northridge, CA 91324
If to the Licensee:
Joseph Murray, President.
THERMAFREEZE Inc.
776 LAKESIDE DRIVE
MOBILE, California 91436
10
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
21. SCOPE OF AGREEMENT.
-------------------
This embodies the entire understanding of the parties hereto and:
21.1. All or any promises, representations, warranties,
understandings or implications thereof arising from any statements
whether oral or in writing as may have been made by either party or
its representatives prior to the signing hereof shall have no
force or effect.
21.2. The invalidity or unenforceability for any reason of any
part of this Agreement shall not prejudice the continuance in
force of the remainder.
21.3. Nothing in this Agreement shall constitute or be deemed to
constitute any form of partnership or joint venture between the
parties or be deemed to constitute the Licensee as the agent
of the Licensor for any purpose whatsoever.
21.4. This Agreement constitutes the entire understanding
between the parties and may only be modified or amended by a signed
written instrument executed by both parties. Any Agreement or
amendment thereof shall be binding upon the successors and or assigns
of the parties.
21.5. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
by the hands of their duly authorized representatives the day and year
first hereinabove written.
THERMAL PRODUCTS, INCORPORATED
By: s/s Jack Herlihy s/s Richard S. Gieser
------------------------ ----------------------
John Herlihy, President Witness
THERMAFREEZE INC.
By: s/s Joseph C. Murray s/s Estrella L. Sison
------------------------ ----------------------
Joseph Murray, President Witness
11
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
SCHEDULE A
Trade Marks and Trade Names
The Licensor owns or controls the following registered or unregistered
Trade Marks and Trade Names:
1. ThermaFreeze
2. ThermaSorb
3. ThermaBarrier
4. HydraFreezer
12
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
SCHEDULE B
PATENTS and PATENT APPLICATIONS
The Licensor owns or controls the following issued Patent and Patent
Applications:
-- Dry ThermaFreeze Production Machine
13
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
SCHEDULE C
THE SYSTEM
The System which is the subject of the exclusive license within the
Territory granted by the Licensor to the Licensee herein, shall include the
packaging, shipping and delivery of any and all temperature sensitive products
the packaging, shipping and delivery of which can be initiated by any
method, for any use and for any end user.
14
<PAGE>
AGREEMENT
THERMAL PRODUCTS, INC. - THERMAFREEZE, INC.
-------------------------------------------
SCHEDULE D
ROYALTY PARTIES
The Licensee shall be obligated to pay royalties to the Licensor in
connection with the exploitation of the System in the Territory as
follows:
Licensee shall pay royalties to the Licensor at the rate of 2.5% of
gross sales of the System on the first $5,000,000 and thereafter, at the
rate of 5% of all gross sales in excess thereof.
Such royalty payments shall be calculated quarterly and paid 30 days
following the end of each quarter.
15
<PAGE>
Exhibit 23.1 Consent from G. Brad Beckstead, CPA
March 9, 2000
To Whom It May Concern:
The firm of G. Brad Beckstead, CPA, consents to the inclusion of my report of
March 9, 2000, on the Financial Statements of ThermaFreeze, Inc. for the
periods ended December 31, 1999 and 1998, in any filings which are necessary
now or in the near future to be filed with the US Securities and Exchange
Commission.
Signed,
/s/ G. Brad Beckstead, CPA
- --------------------------
G. Brad Beckstead, CPA
Nevada License #2701
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET, THE STATEMENT OF OPERATIONS, AND THE STATEMENT OF CASH FLOWS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1999
<CASH> 1,503
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,698
<CURRENT-LIABILITIES> 1,189,421
<BONDS> 0
0
5,000
<COMMON> 22,512
<OTHER-SE> (1,209,235)
<TOTAL-LIABILITY-AND-EQUITY> 7,698
<SALES> 0
<TOTAL-REVENUES> 212,952
<CGS> 0
<TOTAL-COSTS> 225,429
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 127,454
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (352,883)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
