U. S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-QSB

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934

For the quarterly period ended December 31, 2001
                               -----------------

[ ] Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from __________ to __________

                         Commission File Number 0-21279
                                                -------

                          THERMACELL TECHNOLOGIES, INC.
                             (DEBTOR-IN-POSSESSION)
                              --------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

               FLORIDA                                 59-3223708
               -------                                 ----------
(State or Other Jurisdiction of                    (I.R.S. Employer
 Incorporation or Organization)                   Identification No.)

               901 Chestnut St., Suite A Clearwater, Florida 33756
               ---------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (386) 253-6262
                                 --------------
                           (Issuer's Telephone Number)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such a
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

Yes       No X
    ---     ---


         The number of shares  outstanding of the Issuer's Common Stock,  $.0001
Par Value, as of December 31, 2001 was 12,690,704.

         Transitional Small Business Disclosure Format:

Yes       No X
    ---     ---

<PAGE>

                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)


                                      Index

                  Three Months Ended December 31, 2001 and 2000
                                   (Unaudited)




                                                                         Page
Part I - Financial Information                                           ----
------------------------------

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheet -
           December 31, 2001..........................................     1

         Consolidated Statements of Operations -
           Three months ended
           December 31, 2001 and 2000.................................     2

         Consolidated Statements of Changes in Stockholders' Deficit
           Three months ended December 31, 2001.......................     3

         Consolidated Statements of Cash Flows -
           Three months ended
           December 31, 2001 and 2000.................................     4

         Notes to Consolidated Financial Statements...................     5

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations........................     7

Part II - Other Information
---------------------------
Item 1. Legal Proceedings.............................................    12

Item 3. Defaults Upon Senior Securities...............................    13

Item 6. Exhibits and reports on Form 8-K..............................    13

Signatures............................................................    14



                                       i
<PAGE>

                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)
                           Consolidated Balance Sheet
                                   (Unaudited)
                                December 31, 2001

<TABLE>
<CAPTION>

<S>                                                                                      <C>
Assets
Current assets:
    Cash                                                                                      $                9,725
    Prepaid expenses and other                                                                                22,175
                                                                                                 --------------------
Total current assets                                                                                          31,900
                                                                                                 --------------------

Other assets:
    Deposits                                                                                                   8,866
                                                                                                 --------------------

                                                                                              $               40,766
                                                                                                 ====================


Liabilities and Stockholders' Deficit

Current liabilities:
    Notes payable                                                                             $               23,204
                                                                                                 --------------------
Total current liabilities                                                                                     23,204
                                                                                                 --------------------

Liabilities subject to compromise:
    Secured Debt                                                                                             663,406
    Trade and miscellaneous claims                                                                           748,518
    Debt that may be converted to equity                                                                   2,385,343
                                                                                                 --------------------
Total liabilities subject of compromise                                                                    3,797,267
                                                                                                 --------------------

Long-term liabilities:
    Notes payable, less current maturities                                                                   119,796
                                                                                                 --------------------
Total long-term liabilities                                                                                  119,796
                                                                                                 --------------------

                                                                                                 --------------------
Total liabilities                                                                                          3,940,267
                                                                                                 --------------------

Stockholders' deficit:
    Preferred stock, Series A; $.0001 par value; 5,000,000 shares authorized;
       0 shares issued and outstanding
    Preferred stock,  Series B convertible;  $1,000 stated value; 8.0% dividend;
      1,500 shares authorized; 0 shares issued and outstanding
    Common stock; $.0001 par value; 20,000,000 shares authorized;
      12,730,704 shares issued; 12,690,704 shares outstanding                                                  1,273
    Additional paid-in capital                                                                            12,579,040
    Common stock payable                                                                                     212,627
    Common stock receivable                                                                                  (21,250)
    Accumulated deficit                                                                                  (16,616,191)
    Treasury stock; 40,000 common shares                                                                     (55,000)
                                                                                                 --------------------
Total stockholders' deficit                                                                               (3,899,501)
                                                                                                 --------------------

                                                                                              $               40,766
                                                                                                 ====================

</TABLE>


The  accompanying  notes are an  intregral  part of the  consolidated  financial
statements.

                                       1
<PAGE>

                 THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                             (DEBTOR-IN-POSSESSION)
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                Three Months Ended December 31,
                                                                           -------------------------------------------
                                                                                 2001                      2000
                                                                           -----------------         -----------------

<S>                                                                      <C>                       <C>
Sales                                                                    $                -        $                -
                                                                           -----------------         -----------------

Selling, general and administrative
      expenses                                                                      247,260                   193,316
                                                                           -----------------         -----------------
                                                                                    247,260                   193,316

Loss from operations                                                               (247,260)                 (193,316)
                                                                           -----------------         -----------------

Other expense:
      Interest expense                                                              (73,661)                  (64,025)
                                                                           -----------------         -----------------


Loss from continuing operations                                          $         (320,921)       $         (257,341)
                                                                           -----------------         -----------------

Discountinued operations:
      Income (loss) from discontinued operations                                          -                       112
                                                                           -----------------         -----------------

Net loss                                                                 $         (320,921)       $         (257,229)
                                                                           =================         =================

Loss per share:
      Basic loss per share from continuing operations                                 (0.02)                    (0.04)
      Basic loss per share from discontinued operations                                   -                         -
                                                                           -----------------         -----------------

Net loss per share                                                       $            (0.02)       $            (0.04)
                                                                           =================         =================

Weighted average number of
      common shares outstanding                                                  12,939,204                 6,147,109
                                                                           =================         =================

</TABLE>

The  accompanying  notes are an  intregral  part of the  consolidated  financial
statements.

                                       2
<PAGE>

<TABLE>
<CAPTION>


                                                THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                            (DEBTOR-IN-POSSESSION)
                                         Consolidated Statements of Changes in Stockholders' Deficit

                                               Three Months Ended December 31, 2001 (Unaudited)



                             Common Stock
                         ---------------------    Additional     Common         Common
                          Number of                Paid-in        Stock         Stock        Accumulated    Treasury
                           Shares       Amount     Capital       Payable      Receivable       Deficit        Stock         Total
                         -----------  -------- --------------  -----------  --------------   ------------  -----------   -----------
<S>                      <C>        <C>        <C>           <C>          <C>              <C>           <C>           <C>
Balance,
 September 30, 2001        5,847,109 $     585  $  11,712,394 $  1,079,961 $       (21,250) $ (16,295,270)$    (55,000) $(3,578,580)

Common stock issued
 for conversion of
 note payable              6,883,595       688        866,646     (867,334)              -              -            -            -

Net loss for the
 period                            -         -              -            -               -       (320,921)           -     (320,921)
                         -----------  -------- --------------  -----------  --------------   ------------  -----------   -----------
 Balance,
 December 31, 2001        12,730,704 $   1,273  $  12,579,040 $    212,627 $       (21,250) $ (16,616,191) $   (55,000) $(3,899,501)
                         ===========  ======== ==============  ===========  ==============   ============  ===========   ===========
</TABLE>

The  accompanying  notes are an  intregral  part of the  consolidated  financial
statements.

                                       3
<PAGE>

                 THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                             (DEBTOR-IN-POSSESSION)
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Three Months Ended December 31,
                                                                                  ---------------------------------
                                                                                       2001              2000
                                                                                  ---------------   ---------------

<S>                                                                             <C>                  <C>
Operating activities
        Net loss                                                                      $ (320,921)       $ (257,229)
                                                                                  ---------------   ---------------

        Adjustments to reconcile net loss to net cash
         used by operating activities:
             Depreciation and amortization                                                     -            45,869
             Amortization of discount on notes payable                                    38,500            27,815
             Decrease in:
               Accounts receivable and notes receivable                                        -            59,228
               Officer advance                                                                 -             6,900
               Prepaid and other assets                                                   19,150            19,150
             Increase (decrease) in:
               Accounts payable                                                           (1,263)          (69,237)
               Accrued expenses                                                          125,162            47,165
                                                                                  ---------------   ---------------
         Total adjustments                                                               181,549           136,890
                                                                                  ---------------   ---------------

                                                                                  ---------------   ---------------
         Net cash used by operating activities                                          (139,372)         (120,339)
                                                                                  ---------------   ---------------

Investing activities
        Decrease (increase) in trust account                                                   -            21,000
                                                                                  ---------------   ---------------
        Net cash provided (used) by investing activities                                       -            21,000
                                                                                  ---------------   ---------------

Financing activities
        Proceeds from issuance of notes payable                                          143,000            94,482
        Proceeds from common stock subscription                                                -            76,206
        Reduction of capital leases and notes payable                                          -            (6,786)
                                                                                  ---------------   ---------------
        Net cash provided by financing activities                                        143,000           163,902
                                                                                  ---------------   ---------------

        Net increase (decrease) in cash                                                    3,628            64,563

        Cash at beginning of period                                                        6,097            12,879
                                                                                  ---------------   ---------------

        Cash at end of period                                                            $ 9,725          $ 77,442
                                                                                  ===============   ===============


</TABLE>

The  accompanying  notes are an  intregral  part of the  consolidated  financial
statements.

                                       4
<PAGE>


                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)
                   Notes to Consolidated Financial Statements
                  Three Months Ended December 31, 2001 and 2000
                                   (Unaudited)


1.      Basis of Presentation

In the  opinion  of  management,  all  adjustments  consisting  only  of  normal
recurring  adjustments  necessary  for a fair  statement  of (a) the  results of
operations  for the three  months  ended  December  31,  2001 and 2000,  (b) the
financial position at December 31, 2001, and (c) cash flows for the three months
ended December 31, 2001 and 2000, have been made.

The  unaudited  consolidated  financial  statements  and notes are  presented as
permitted by Form 10-QSB. Accordingly,  certain information and note disclosures
normally included in consolidated  financial  statements  prepared in accordance
with accounting  principles  generally  accepted in the United States of America
have been omitted. The accompanying  consolidated financial statements and notes
of ThermaCell  Technologies,  Inc. and Subsidiary (the "Company") should be read
in conjunction with the audited  consolidated  financial statements and notes of
the  Company  for the fiscal  year ended  September  30,  2001.  The  results of
operations  for  the  three-month   period  ended  December  31,  2001  are  not
necessarily indicative of those to be expected for the entire year.

The  accompanying  consolidated  financial  statements  include the  accounts of
ThermaCell Technologies,  Inc. and its subsidiary, Atlas Chemical Co. ("Atlas"),
after elimination of material, inter-company accounts, and transactions.

Reclassifications  have been made to the 2001 consolidated  financial statements
to  conform  to the  classifications  used in 2002,  and to  reflect  accounting
effects of discontinued operations.

2.      Bankruptcy Filing and Going Concern Considerations

In November  2001,  the Company  filed a voluntary  petition for  reorganization
under Chapter 11 of the U. S. Bankruptcy Code with the U.S. Bankruptcy Court. As
a result of the filing of the voluntary  petition under Chapter 11 of the United
States Bankruptcy Code, it is anticipated that claims will be asserted in excess
of those  amounts set forth in the  Company's  books and  records,  and that the
Company  will  dispute  and file  objections  to  certain  of such  claims.  The
Company's  management  cannot  express  any opinion as to the  likelihood  of an
outcome respecting any claims asserted or to be asserted in the Chapter 11 case,
including  claims  resulting  from the  assumption  or  rejection  of leases and
executory  contracts  and various other claims.  The  accompanying  consolidated
financial   statements  have  been  prepared  on  a  going  concern  basis  that
contemplates the realization of assets and  liabilities.  In the ordinary course
of business,  operating  losses have been  incurred  each year since  inception,
resulting in an accumulated  deficit of $16,616,191 and negative working capital
of $3,788,571 as of December 31, 2001,  and total  liabilities  exceeding  total
assets by  $3,899,501  as of December  31, 2001.  In  addition,  the Company has
certain  default  judgments  against it.  Currently,  management  is  soliciting
additional  equity  investors to fund these losses.  However,  these  conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern. The consolidated financial statements of the Company do not include any
adjustments  relating  to  the  recoverability  of  liabilities  that  might  be
necessary should the Company be unable to continue as a going concern.

                                       5
<PAGE>

                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)
                   Notes to Consolidated Financial Statements
                  Three Months Ended December 31, 2001 and 2000
                                   (Unaudited)

2.      Bankruptcy Filing and Going Concern Considerations(continued)

The Company has  classified  its  liabilities  subject to  compromise as follows
according to its proposed plan of reorganization:

Secured Debt - Consists  Administrative  Expenses,  Other Priority  Claims,  and
Secured Claims.

Trade and  miscellaneous  claims - Consists of Priority Tax Claims and Unsecured
Claims

Debt that may be converted  to equity - Consists of secured or unsecured  claims
which may be converted to equity.

3.      Per Share Calculations

Per share data was computed by dividing net loss by the weighted  average number
of shares  outstanding during the three month period ended December 31, 2001 and
2000. The weighted  average shares  outstanding for the three month period ended
December 31, 2001 was  12,939,204  as compared to 6,147,109  for the three month
period ended December 31, 2000.

4.      Equity Transactions

During the year ended  September 30, 2001,  $566,667 of  redeemable  convertible
promissory  notes  including  $100,464  of  accrued  interest  and  $200,203  in
penalties,  were converted into 6,883,595  shares of common stock.  These shares
were not issued as of the fiscal year ended September 30, 2001 and were recorded
as a common  stock  payable.  These  shares were issued  during the  three-month
period ended December 31, 2001.

                                       6
<PAGE>

                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The  statements  contained  in this Report on Form  10-QSB,  that are not purely
historical, are forward-looking information and statements within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act  of  1934.  These  include  statements   regarding  the  Company's
expectations,   intentions,   or  strategies   regarding  future  matters.   All
forward-looking  statements  included in this document are based on  information
available  to the Company on the date  hereof.  It is important to note that the
Company's  actual results could differ  materially  from those projected in such
forward-looking  statements  contained in this Form 10-QSB. The  forward-looking
statements  contained  here in are based on current  expectations  that  involve
numerous risks and uncertainties.  Assumptions relating to the foregoing involve
judgments  regarding,  among  other  things,  the  Company's  ability  to secure
financing  or  investment  for  capital   expenditures,   future   economic  and
competitive market conditions,  and future business decisions. All these matters
are  difficult  or  impossible  to predict  accurately  and many of which may be
beyond the  control of the  Company.  Although  the  Company  believes  that the
assumptions underlying its forward-looking statements are reasonable, any of the
assumptions could be inaccurate and,  therefore,  there can be no assurance that
the  forward-looking  statements  included  in this form 10-QSB will prove to be
accurate.

GENERAL

In November  2001,  the  Company  filed a voluntary  petition  for relief  under
Chapter 11 of the United States  Bankruptcy Code in the United States Bankruptcy
Court for the  Middle  District  of  Florida.  The  Company  is  operating  as a
debtor-in-possession  under  the  Code,  which  protects  it from its  creditors
pending  reorganization  under the  jurisdiction  of the  Bankruptcy  Court.  As
debtor-in-possession,  the Company is authorized to operate its business but may
not engage in  transactions  outside the  ordinary  course of  business  without
approval of the  Bankruptcy  Court.  As a result of the filing of the  voluntary
petition  under  Chapter  11  of  the  United  States  Bankruptcy  Code,  it  is
anticipated that claims will be asserted in excess of those amounts set forth in
the  Company's  books and  records,  and that the Company  will dispute and file
objections to certain of such claims.  The Company's  management  cannot express
any opinion as to the likelihood of an outcome respecting any claims asserted or
to be asserted  in the  Chapter 11 case,  including  claims  resulting  from the
assumption  or rejection of leases and  executory  contracts  and various  other
claims.

OVERVIEW

We were  incorporated  in Florida in August 1993, for the purpose of developing,
manufacturing,  and marketing  insulating materials and coatings using partially
evacuated glass microspheres (sometimes referred to as "shells"). The process of
evacuation  removes air and other  gases from the sphere and  thereby  creates a
vacuum.  A shell is a very small glass sphere  (generally the size of a grain of
salt) made by crushing  glass  particles.  The  insertion of shells into various
materials  and  products  ("shell  technology")  can  substantially  improve the
thermal resistive  characteristics  of such materials and products  resulting in
improved insulation ("R") values. The more a shell is evacuated,  the higher the
thermal resistive characteristics of the product or material to which the shells
are  added.  Shells can also be used as filler  material  for  products  such as
bowling balls.

                                       7
<PAGE>
                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

Our management's  long-term  business strategy is to (i) develop and manufacture
our own shells and (ii) use our shell  technology to improve the "R" values in a
number of applications that create new and improved products. These products may
include,  but are not limited to,  paints and coatings,  drywall,  gypsum board,
home siding materials and space foam  insulation.  Other markets in which we may
utilize our technology include refrigeration and cooling systems, automotive and
transportation  applications,  cups and thermoses. There is no assurance that we
will be successful in  penetrating  these  markets and  developing  commercially
viable  manufacturing  techniques for our shell  technology.  In our 1995 fiscal
year, we completed the  development  of our first product line that consisted of
paints and coatings  containing  shells in order to reduce heat transmission and
improve the  insulation  values of these  products.  The products  were marketed
under the  ThermaCool(TM)  label.  There have been limited sales of this product
since its introduction due to our financial limitations.


BUSINESS STRATEGY

Our  business  strategy is to develop and  commercialize  shell  technology  and
products  incorporating  shell technology.  An important element in the our past
strategy was to acquire paint  manufacturers  and  distributors to introduce our
technology into the paint and coating industry. That strategy has been abandoned
because  of  our  financial  constraints.  One of our  current  objectives  will
re-start  our  marketing of Vaxcells  incorporating  our shell  technology.  Our
restructuring strategy of developing a commercially viable manufacturing process
for shells and expansion  into markets for our shell  technology  will result in
incurring  additional  losses due to the costs associated with these strategies.
We expect to incur  losses until we are able produce  shells  consistently  on a
production-wide  basis and are able to market these shells to generate revenues.
The Company's business strategy is dependent upon the successful  implementation
of the following:

         (i)      Plan of Reorganization and Turnaround Business Strategy

                  ThermaCell  filed for  Chapter 11  protection  on  November 7,
2001.  ThermaCell  obtained  Bankruptcy  Court  authority  to negotiate a senior
secured  credit  facility  from PAC  Funding,  LLC ("PAC") and has  continued to
operate  its  business  as a  debtor-in-possession.  PAC  is a  Florida  limited
liability  company,  whose members are Augustine  Capital Fund, L.P. and Private
Capital Group. PAC has committed  $500,000 in senior secured lending.  As of May
15, 2002, PAC funded $348,650.  A committee of unsecured  creditors has not been
appointed.  The  debtor-in-possession   funding  provided  by  PAC  has  allowed
ThermaCell  to continue  operations  and avoid  liquidation.  ThermaCell  is not
generating  sales revenues from operations and is dependent upon PAC for funding
its working capital requirements.

                                       8
<PAGE>
                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

                  In order to be  confirmed,  the  Plan of  Reorganization  must
satisfy certain requirements of the Bankruptcy Court,  including that each claim
in a  particular  class  receive the same  treatment as each other claim in that
class and that the Company be adequately  capitalized  (upon  through  emergence
from Chapter 11) so that confirmation of the Plan of Reorganization  will not be
followed by a liquidation or the need for further reorganization.

                  Under the Plan of  Reorganization  it is anticipated  that PAC
will  receive  approximately  70% of  ThermaCell's  equity,  existing  unsecured
creditors  20%  of  ThermaCell's  equity,  and  existing   shareholders  10%  of
ThermaCell's  equity.  Pac would convert it existing  secured credit into equity
that  upon of  emergence  from the  Chapter  11  proceedings,  the only  debt of
ThermaCell would be debt due to professionals,  assessments  imposed by the IRS,
which will be contested and other administrative  claims. It is anticipated that
ThermaCell  will  fund or  negotiate  these  claims  as part of the  Chapter  11
proceedings.

                  Management  believes  that the shell  technology is viable and
that  there  are  substantial  markets  for  its  products.  The  reorganization
proceedings,  if  successful,  will help  ThermaCell  achieve its objectives and
retain some shareholder value.

         (ii)     Develop and manufacture the Company's own shells

                  The Company's  manufacturing process allows for the production
of  insulating  shells  in a manner  to enable  the  evacuation  of gases or the
addition of low conductive gas into the shells. Such evacuation results in lower
gas  pressure or gases within the shells that can reduce  thermal  conductivity,
thus providing improved insulating qualities. The manufacturing process involves
the formation of water vapor in the shells and then the subsequent evacuation of
the shells by heating the shells.  This  process  causes  out-permeation  of the
water vapor.

                  To the best of management's knowledge, no one has been able to
develop a  commercially  viable  process for the  production of fully  evacuated
glass  shells,  due  to,  among  other  factors,   manufacturing  and  technical
restraints.  Currently,  there  are three  large  multinational  companies  that
manufacture shells. The essential  difference between the manufacturing  process
for partially  evacuated shells, as compared to substantially or fully evacuated
shells,  is the  technique  employed  to  evacuate  gases from the shells  which
improve  its  thermal  conductivity  or  insulating  value.  Our plans to market
non-evacuated  shells for several uses will compete directly with others in this
market.  We plan to have  non-evacuated  shells available to sell in the general
market  because  not  all  shells  during  the  manufacturing  process  will  be
evacuated. These non-evacuated shells will be separated and sold for general use
as fillers, but will be produced at a substantially reduced cost.

                  Our present  Daytona  facilities  and equipment can be used to
manufacture partially evacuated shells. To-date we have manufactured pilot plant
quantities of shells but have not produced commercial quantities.

         (iii)    Expand the shell technology to other products

                  We believe the potential exists to commercially  exploit other
markets suitable for our shell technologies.  These include filler materials for
bowling balls,  aroma therapy  applications and construction  components such as


                                       9
<PAGE>
                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

drywall, gypsum board,  prefabricated cement products, home siding materials and
space foam  insulation as potential  markets.  Other  potential  markets include
refrigeration and cooling systems,  automotive and transportation  applications,
and cups and  thermoses.  There is no assurance  that we will be able to attract
capital to  manufacture  our  products or  successfully  penetrate  any of these
markets.  We will  only be able to  implement  this  strategy  if we are able to
economically manufacture highly or partially evacuated shells.

RESULTS OF OPERATIONS

FOR THE  THREE-MONTH  PERIOD ENDED DECEMBER 31, 2001 COMPARED TO THE THREE-MONTH
PERIOD ENDED DECEMBER 31, 2000

Sales
-----
There were no sales for the three-month period ended December 31, 2001 and 2000.
We are currently developing our microsphere  technologies and have not generated
revenues from these  products.  There are no assurances  that we will be able to
generate revenues from products incorporating this technology in the future.

Selling, General and Administrative Expenses
--------------------------------------------
For the three-month period ended December 31, 2001, total selling,  general, and
administrative   expenses   were  $247,260  as  compared  to  $193,316  for  the
three-month  period ended December 31, 2000, an increase of $53,944 or 28%. This
increase is  primarily  related to an  increases  in payroll  expenses and plant
supplies associated with our microsphere pilot facility in Daytona, Florida.

Interest Expense
----------------
Interest  expense,  net of interest income,  increased 15%, or $9,636 to $73,661
for the three-month  period ended December 31, 2001 from $64,025 in the previous
three-month  period ended December 31, 2000.  Interest expense primarily relates
to our outstanding convertible debentures.

Net Loss
--------
The net loss and the net loss per share was  $320,921  and $0.02,  respectively,
for the  three-month  period ended  December 31, 2001, as compared to a net loss
and net loss per share of $257,229 and $0.04, respectively,  for the three-month
period ending December 31, 2000. The increase in loss is, in part, attributed to
the Company's higher level of selling, general and administrative costs over the
prior three-month  period which includes increases in payroll expenses and plant
supplies associated with our microsphere pilot facility in Daytona,  Florida. On
a  weighted  average  basis,   there  were  12,939,204  shares  outstanding  for
three-month  period  ending  December 31, 2001 as compared to  6,147,109  shares
outstanding for three-month period ended December 31, 2000.

                                       10
<PAGE>
                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

LIQUIDITY AND CAPITAL RESOURCES

During March 2001,  conversion  of  $566,667,  a portion of the debt held by the
Augustine  Fund,  who holds all remaining  convertible  debt was completed  into
6,883,595  shares of common stock which  represents more than 50% voting control
of the outstanding common stock of the company.  These shares were not issued as
of the fiscal year ended  September 30, 2001 and were recorded as a common stock
payable.  These shares were issued during the three-month  period ended December
31, 2001.  With this  conversion,  the principals of Augustine  Capital are in a
position to control the affairs of the  company.  Augustine  Capital has agreed,
subject to certain  additional due diligence,  to provide  additional capital to
the company.

We filed for Chapter 11 protection  on November 7, 2001. We obtained  Bankruptcy
Court  authority to negotiate a senior secured credit facility from PAC Funding,
LLC   ("PAC")   and  we  have   continued   to  operate   our   business   as  a
debtor-in-possession.  PAC is a Florida limited liability company, whose members
are Augustine  Capital Fund, L.P. and Private  Capital Group.  PAC has committed
$500,000 in senior secured lending.  As of May 15, 2002, PAC funded $348,650.  A
committee   of   unsecured    creditors    has   not   been    appointed.    The
debtor-in-possession  funding  provided  by  PAC  has  allowed  us  to  continue
operations  and avoid  liquidation.  We are not  generating  sales revenues from
operations  and we are  dependent  upon  PAC for  funding  our  working  capital
requirements.

We continue to experience  operating losses.  Our net working capital deficiency
and accumulated deficit are $3,788,571 and $16,616,191, respectively at December
31, 2001. We have not historically generated sufficient revenues from operations
to  self-fund  our  capital  requirements.  Management  is  focusing  on raising
additional  capital to fund its present  development.  We do not have sufficient
working capital to meet our immediate needs.

We will not be able to meet our future cash requirements unless new financing is
obtained.  Moreover,  we will require substantial capital to execute our Plan of
Reorganization and the Plan of Reorganization must be approved in the short term
to remain a going  concern.  We will need short term  outside  investments  on a
continuing  basis to finance  our current  operations.  We expect to continue to
experience losses for the near future. If we do not obtain short term financing,
we may not be able to  continue  as a going  concern and the Company may have to
convert  to a Chapter  7  bankruptcy.  We do not have a bank line of credit  and
there  can be no  assurance  that any  required  or  desired  financing  will be
available through bank borrowings,  debt, or equity offerings,  or otherwise, on
acceptable  terms. If future financing  requirements  are satisfied  through the
issuance of equity securities,  investors may experience significant dilution in
the net book value per share of common  stock and there is no  guarantee  that a
market will exist for the sale of the Company's shares.

                                       11
<PAGE>
                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

Inflation

Inflation has not proven to be a factor in our business  since our inception and
is not  expected to have a material  impact on our  business in the  foreseeable
future.

Going Concern Assumption

On November  7, 2001 we filed a  voluntary  petition  for  reorganization  under
Chapter 11 of the U.S.  Bankruptcy Code with the U.S.  Bankruptcy Court. We have
incurred significant losses since our inception.  These losses and other factors
resulted in most of our available cash resources being used to support operating
activities. In addition, we have assumed significant commitments and obligations
as described in the financial  statements.  These factors,  among others,  raise
substantial doubt about our ability to continue as a going concern.

The accompanying  consolidated  financial statements have been prepared assuming
that we will  continue  as a going  concern.  The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

We have taken certain steps to revise our operating and financial  requirements,
which we believe  are  sufficient  to provide us with the ability to continue in
existence.  These steps and our plans regarding these matters include the filing
of a  voluntary  petition  for  reorganization  under  Chapter  11  of  the  U.S
Bankruptcy Code with the U.S.  Bankruptcy Court. The first impact of the Chapter
11 filing was to stay certain legal proceedings that had been instituted against
us. We also believe that the Chapter 11 filing has allowed us to reorganize  and
rethink our direction, and to obtain debtor-in-possession financing.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America  requires  management of the
Company to make  estimates and  assumptions  affecting  the reported  amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements,  as well as revenues and expenses  during
the reporting period. The amounts estimated could differ from actual results.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
         -----------------

We are subject to a number of lawsuits and claims  arising out of the conduct of
our business.  Management  believes that the probable resolution of such matters
may  materially  affect our  financial  position,  results of operations or cash
flows.

In November  2001, we filed a voluntary  petition for relief under Chapter 11 of
the United States  Bankruptcy Code in the United States Bankruptcy Court for the


                                       12
<PAGE>
                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

Middle   District  of  Florida  in  Tampa,   Florida.   We  have   arranged  for
debtor-in-possession  financing with our largest  shareholder.  Our intent is to
have our plan of reorganization  approved in July 2002, which requests creditors
to accept our shares and to have the  debtor-in-possession  funding  source also
accept our shares as part of this  reorganization.  Current shareholders will be
substantially  diluted  if the  reorganization  plan is  confirmed.  There is no
assurance  our plans to reorganize  will be  successful or approved.  Management
believes  that the shell  technology  is viable and that  there are  substantial
markets for its products. The organization proceedings, if successful, will help
ThermaCell achieve its objectives and retain some shareholder value.

In light of the Chapter 11 filing the following lawsuits have been stayed:

On October 4, 2000, a judgment was rendered by the United States District Court,
Middle District of Florida, in a trial regarding claims by Mr. Russell Haraburda
and Eden Group, Inc. against John Pidorenko, the Company's former president, and
the Company for monies  purportedly due for arranging  financing for the Company
prior to its IPO in March 1997. The Plaintiffs, in the pretrial, claimed damages
in the amount of  approximately  $3.5 million.  The judgment  concluded  that no
monies or other  consideration was due Mr. Haraburda or the Eden Group, Inc. The
Company's  claims  regarding two promissory  notes of the Eden Group,  Inc., Mr.
Haraburda's firm, that were unpaid were also denied. Subsequently, Mr. Haraburda
and Eden Group, Inc. appealed the decision to the United States Court of Appeals
for the Eleventh Circuit.  The Company also appealed the decision  regarding the
obligations of Eden Group,  Inc. under the promissory notes. This court affirmed
the lower court's  decision and there has been no further  action by Mr. Russell
Haraburda and Eden Group, Inc.

The Company is involved in several  lawsuits for  outstanding  obligations  from
vendors,  leasing  companies,  and certain  professionals for services provided.
There are default  judgments that have been granted  because the Company did not
had the financial resources to appropriately defend itself as representation was
declined or withdrawn.

Generally,  legal  actions to  enforce  or  otherwise  effect  repayment  of all
pre-petition  liabilities as well as all pending  litigation  against ThermaCell
are stayed while we continue to operate our business as debtor-in-possession.

Item 3.  Defaults Upon Senior Securities.
         -------------------------------

The Company is currently in default on approximately $1,500,000 of notes payable
and capital leases.

Item 6.  Exhibits and reports on Form 8-K
         --------------------------------

          (a) Exhibits
                      -none

          (b) Reports of Form 8-K
                      The  Company  filed a  Current  Report  on Form 8-K  dated
                      November  7,  2001  with  the   Securities   and  Exchange
                      Commission in  connection  with a change in control of the
                      Company,   entering  into  a  Stock  Purchase  Termination
                      Agreement with T-Coast  Pavers/Sealco  Systems, and filing
                      for  protection  under  Chapter 11 of the U.S.  Bankruptcy
                      Code.


                                       13
<PAGE>
                  THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

SIGNATURES

Pursuant to the  requirements  of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the  undersigned  thereunto
duly authorized.


                                                ThermaCell Technologies, Inc.


Dated    6/24/2002
                                                /s/ James Hagarman
                                                --------------------
                                                James Hagarman
                                                President


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