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 AUGUST 31, 1997

         [ ]  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.
        (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.)

                       5419 PROVOST DR., HOLIDAY, FL 34690
                    (Address of Principal Executive Offices)

                                 (813) 938-3269
                           (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  X   No
    ---     ---
         The number of shares  outstanding of the Issuer's Common Stock,  $.0001
Par Value, as of September 1, 1997 was 2,859,551.

         Transitional Small Business Disclosure Format:

Yes      No  X
    ---     ---

<PAGE>

                          THERMACELL TECHNOLOGIES, INC.


                                      INDEX



                                                                          PAGE
PART I - FINANCIAL INFORMATION                                            ----
------------------------------

Item 1.  Financial Statements

         Balance Sheets -
           November 30, 1996 and August 31, 1997........................  1 - 2

         Statements of Loss -
           Three months ended and nine months ended
           August 31, 1996 and 1997.....................................  3

         Statements of Changes in Stockholders' Equity -
           Three months ended and nine months ended August 31, 1997.....  4

         Statements of Cash Flows -
           Nine months ended August 31, 1996 and 1997...................  5

         Notes to financial statements..................................  6

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations..........................  7 - 12

PART II - OTHER INFORMATION
---------------------------

Item 1. Legal Proceedings...............................................  12

Item 5. Other Information...............................................  12

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


         Signatures.....................................................  13

Exhibit 11..............................................................  14

                                       i
<PAGE>

                                      THERMACELL TECHNOLOGIES, INC.

                                             BALANCE SHEETS

                                                 ASSETS

<TABLE>
<CAPTION>

                                                                          August 31,        November 30,
                                                                             1997               1996
                                                                       ----------------   ---------------
                                                                         (Unaudited)
<S>                                                                   <C>                 <C>
CURRENT ASSETS
   Cash                                                                $        903,179   $         3,512
   Notes receivable                                                                   -           213,750
   Accounts receivable
     Trade,net of allowance for uncollectible accounts
       of $19,211 for 1997 and $21,000 for 1996                                 532,946            64,006
     Officers                                                                   489,670             4,637
     Other                                                                          500             6,000
                                                                       -----------------   ---------------
                                                                              1,023,116            74,643
                                                                       -----------------   ---------------

   Inventories                                                                  352,570           150,872
   Prepaid expenses and other                                                    52,531            14,018
                                                                       -----------------   ---------------

         TOTAL CURRENT ASSETS                                                 2,331,396           456,795
                                                                       -----------------   ---------------

PROPERTY AND EQUIPMENT                                                          559,658           322,979
   Less: accumulated depreciation                                               (81,288)          (41,060)
                                                                       -----------------   ---------------
                                                                                478,370           281,919
                                                                       -----------------   ---------------

OTHER ASSETS
   Restricted cash                                                                    -            15,000
   Deposits                                                                       6,454
   Deferred offering costs                                                            -           297,648
   Deferred income tax benefit, net                                             514,527           337,350
   Goodwill and other intangibles, net                                          921,315           148,561
                                                                       -----------------   ---------------
                                                                              1,442,296           798,559
                                                                       -----------------   ---------------









                                                                       $      4,252,062    $    1,537,273
                                                                       =================   ===============
</TABLE>

See notes to financial statements.

                                       1
<PAGE>

                                      THERMACELL TECHNOLOGIES, INC.

                                        BALANCE SHEETS(CONTINUED)

                                  LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                          August 31,        November 30,
                                                                             1997               1996
                                                                       -----------------   ---------------
                                                                         (Unaudited)
<S>                                                                   <C>                 <C>
CURRENT LIABILITIES
Notes payable
   Bridge financing                                                    $              -    $    1,898,500
   Stockholders                                                                       -           135,000
   Other                                                                         10,276            24,323
                                                                       -----------------   ---------------
                                                                                 10,276         2,057,823

Accounts payable and accrued expenses
   Trade accounts                                                               598,320           444,537
   Accrued payroll and payroll taxes                                            289,568           175,696
   Accrued interest and other                                                    83,884           223,156
                                                                       -----------------   ---------------

         TOTAL CURRENT LIABILITIES                                              982,048         2,901,212
                                                                       -----------------   ---------------

STOCKHOLDERS' EQUITY
   Preferred stock, par value $.0001
     5,000,000 shares, authorized, issued
     and outstanding, 1997 and 1996                                                 500               500

   Common stock, par value $.0001
     Authorized 20,000,000 shares,
     outstanding 2,859,551 and 869,899 shares,
     1997 and 1996, respectively                                                    286                87

   Additional paid-in capital                                                 5,564,334           184,314

   Accumulated deficit                                                       (2,295,106)       (1,548,840)
                                                                       -----------------   ---------------

         TOTAL STOCKHOLDERS' EQUITY                                           3,270,014        (1,363,939)
                                                                       -----------------   ---------------










                                                                       $      4,252,062    $    1,537,273
                                                                       =================   ===============
</TABLE>

See notes to financial statements.

                                       2
<PAGE>

                                             THERMACELL TECHNOLOGIES, INC.

                                                  STATEMENTS OF LOSS
                                                      (Unaudited)

<TABLE>
<CAPTION>

                                                                  Three Months Ended              Nine Months Ended
                                                                       August 31,                     August 31,
                                                               -------------------------       -------------------------
                                                               -------------------------       -------------------------

<S>                                                           <C>          <C>                <C>          <C>
                                                                  1997         1996               1997         1996
                                                               -----------  ------------       -----------  ------------

REVENUE
     Sales                                                     $  463,568   $   171,777        $  878,511   $   430,597

LESS: COST OF SALES                                               283,284        78,549           492,806       248,686
                                                               -----------  ------------       -----------  ------------

     GROSS PROFIT                                                 180,284        93,228           385,705       181,911

SELLING, GENERAL AND ADMINISTRATIVE
     EXPENSES                                                     497,585       278,210         1,114,495       754,190
                                                               -----------  ------------       -----------  ------------

                  LOSS FROM OPERATIONS                           (317,301)     (184,982)         (728,790)     (572,279)
                                                               -----------  ------------       -----------  ------------

OTHER INCOME AND EXPENSE
     Commissions                                                        -             -           (35,000)            -
     Interest income                                               14,740             -            37,002             -
     Interest expense                                                   -             -          (161,566)            -
     Other                                                        (35,089)      (58,789)          (35,089)     (149,502)
                                                               -----------  ------------       -----------  ------------

                  TOTAL OTHER INCOME AND EXPENSE                  (20,349)      (58,789)         (194,653)     (149,502)
                                                               -----------  ------------       -----------  ------------

                  LOSS BEFORE INCOME TAXES                       (337,650)     (243,771)         (923,443)     (721,781)

INCOME TAXES
     Deferred income tax benefit                                   66,776        48,754           177,178       144,356
                                                               -----------  ------------       -----------  ------------

                  NET LOSS                                     $ (270,874)  $  (195,017)       $ (746,265)  $  (577,425)
                                                               ===========  ============       ===========  ============

Loss per common share                                          $    (0.09)  $     (0.28)       $    (0.36)  $     (0.82)
                                                               ===========  ============       ===========  ============

Weighted average number of
     common shares outstanding                                  2,859,551       707,515         2,063,690       707,515
                                                               ===========  ============       ===========  ============

</TABLE>








See notes to financial statements.
                                       3
<PAGE>

                          THERMACELL TECHNOLOGIES, INC.

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                         Common Stock              Preferred Stock       Additional
                                    ------------------------   ------------------------
                                      Number of                  Number of                 Paid-in       Accumulated
                                      Shares       Amount        Shares       Amount       Capital        Deficit         Total
                                    ------------  ----------   ------------  ----------  ------------  --------------  -------------
<S>                                <C>           <C>          <C>           <C>         <C>           <C>             <C>  
Balance November 30, 1996               869,899   $      87      5,000,000   $     500   $   184,314   $  (1,548,840)  $ (1,363,939)
Net loss for the three months ended
  February 28, 1997                           -           -              -           -             -        (186,912)      (186,912)
                                    ------------  ----------   ------------  ----------  ------------  --------------  -------------

Balance February 28, 1997               869,899   $      87      5,000,000   $     500   $   184,314   $  (1,735,752)  $ (1,550,851)


Stock Issued - public offering        1,989,652   $     199                              $ 5,428,928                   $  5,429,127

Net loss for the three months ended
May 31, 1997                                  -           -              -           -             -        (288,479)      (288,479)
                                    ------------  ----------   ------------  ----------  ------------  --------------  -------------

Balance May 31, 1997                  2,859,551   $     286      5,000,000   $     500   $ 5,613,242   $  (2,024,231)  $  3,589,797
                                    ------------  ----------   ------------  ----------  ------------  --------------  -------------

Adjustment to Paid-in-capital                                                                (48,908)                       (48,908)

Net loss for the three months ended
August 31, 1997                                                                                             (270,874)      (270,874)
                                    ------------  ----------   ------------  ----------  ------------  --------------  -------------

Balance August 31, 1997               2,859,551   $     286      5,000,000   $     500   $ 5,564,334   $  (2,295,106)  $  3,270,014
                                    ============  ==========   ============  ==========  ============  ==============  =============

</TABLE>

See notes to financial statements.

                                       4
<PAGE>

                                          THERMACELL TECHNOLOGIES, INC

                                            STATEMENTS OF CASH FLOWS
                                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                                  For the Nine Months Ended
                                                                              -----------------------------------
                                                                               August 31,           August 31,
                                                                                  1997                 1996
                                                                              --------------       --------------
<S>                                                                          <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Reconciliation of net loss to net cash
     used in operating activities
       Net loss                                                               $    (746,265)       $    (577,425)
       Adjustments to reconcile net loss to net
         cash provided by operating activities
         Depreciation                                                                59,011               30,998
         Amortization                                                                42,582                    -
         (Increase) in accounts receivable                                         (468,940)            (109,710)
         (Increase) Decrease in inventories                                        (201,698)             (72,506)
         (Increase) Decrease in prepaid expenses and other                          (38,513)                   -
         (Increase) Decrease in deferred income tax benefit                        (177,177)            (144,356)
         (Decrease) in other assets                                                (509,142)            (205,867)
         Increase (decrease) in accounts payable                                    153,783              184,211
         Increase (decrease) in accrued expenses                                    (25,400)              70,726
                                                                              --------------       --------------
              NET CASH USED IN OPERATING ACTIVITIES                              (1,911,759)            (823,929)
                                                                              --------------       --------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Collections on note receivable                                                   213,750                    -
   Capital expenditures                                                            (255,462)            (154,241)
   Issuance of notes receivable and advances                                       (479,533)            (100,000)
                                                                              --------------       --------------
              NET CASH USED IN INVESTING ACTIVITIES                                (521,245)            (254,241)
                                                                              --------------       --------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from issuance of common stock                                         5,380,218                    -
   Proceeds from issuance of notes payable                                                -            1,110,797
   Principal payments on notes payable                                           (2,047,547)                   -
   Costs associated with obtaining financing                                              -              (99,122)
                                                                              --------------       --------------
              NET CASH PROVIDED BY
                FINANCING ACTIVITIES                                              3,332,671            1,011,675
                                                                              --------------       --------------

              NET INCREASE (DECREASE) IN CASH                                       899,667              (66,495)

CASH BEGINNING                                                                        3,512               90,773
                                                                              --------------       --------------

CASH ENDING                                                                   $     903,179        $      24,278
                                                                              ==============       ==============
</TABLE>




See notes to financial statements.

                                       5
<PAGE>

                          THERMACELL TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited financial statements,  which are for interim periods,
do not include all  disclosures  provided  in the annual  financial  statements.
These  unaudited  financial  statements  should be read in conjunction  with the
financial  statements and the footnotes thereto contained in Form 10-KSB for the
year ended November 30, 1996 of ThermaCell  Technologies,  Inc. (the "Company"),
as filed with the Securities and Exchange Commission.

In the opinion of the Company,  the accompanying  unaudited financial statements
contain all adjustments  (which are of a normal and recurring  nature) necessary
for a fair presentation of the financial  statements.  The results of operations
for the three month and nine month  periods ended August 31, 1997 and August 31,
1996 are not  necessarily  indicative of the results to be expected for the full
year.

NOTE 2 - PER SHARE CALCULATIONS

Per share data was computed by dividing net loss by the weighted  average number
of shares  outstanding  during the respective  periods.  On August 12, 1996, the
Company announced a ten (10) for one (1) reverse common stock split. Retroactive
effect was given to the outstanding stock.

NOTE 3 - ACQUISITION

On July 28,  1997,  the  Company  acquired  all the  outstanding  common  stock,
representing 100% ownership of Atlas Chemical Company,  a paint manufacturer and
distributor,  located in Miami,  Florida.  For the fiscal  year  ending June 30,
1997,  Atlas  Chemical had annual  revenues of $2.4 million and  sustained a net
loss of approximately $68,000.
                              
                                       6
<PAGE>

                          THERMACELL TECHNOLOGIES, INC.


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

This Form 10-QSB contains 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.  Actual results could differ  materially  from
those projected in the forward looking statements contained in this Form 10-QSB.

GENERAL

The  Company was  incorporated  in Florida in August,  1993,  for the purpose of
developing,  manufacturing and marketing insulating materials and coatings using
partially  evacuated glass  microspheres  ("shells").  The Company's  technology
utilizes the  insertion  of the shells in various  materials  and products  that
improve the thermal resistive characteristics of such products.

The Company's  business strategy is to (i) expand the marketing and distribution
of  ThermaCool(TM)  paints  and  coatings,  (ii)  develop  and  manufacture  the
Company's own shells and (iii) expand the shell  technology  to other  products,
such as drywall, gypsum board, home siding materials, and space foam insulation,
among others.

On November 30, 1995,  the Company  acquired the assets of C.F.  Darling Paint &
Chemicals, Inc., a paint manufacturing company, located in Holiday, Florida. The
Company  acquired  these  assets so that it would have a facility to produce and
develop paints and coatings for its ThermaCool(TM) product line.

On March 19, 1997, the Company  completed a public offering for 1,375,000 Units,
each Unit  consisting  of one share of Common Stock,  $.0001 par value,  and one
Series A Redeemable Common Stock Purchase Warrant, at a price of $4.00 per Unit.
In addition,  the underwriter  exercised its over-allotment  purchase option and
purchased 206,250 additional Units at the initial per Unit public offering price
less the underwriting discounts and commission.

On July 28,  1997,  the  Company  acquired  all the  outstanding  common  stock,
representing 100% ownership of Atlas Chemical Company,  a paint manufacturer and
distributor,  located in Miami,  Florida. The Company acquired this firm so that
it would have a larger  manufacturing  facility  to both  expand  production  of
coatings  and to obtain an  established  marketing  distribution  channel  which
included  major accounts such as Builders  Square,  Ace Hardware,  Kmart,  among
others.  For the fiscal year ending June 30,  1997,  Atlas  Chemical  had annual
revenues of $2.4 million and sustained a net loss of approximately $68,000.

                                       7
<PAGE>

                          THERMACELL TECHNOLOGIES, INC.


The Company has  sustained  significant  operating  losses since its  inception.
Management's strategy of expanding the ThermaCool(TM) product line, developing a
commercially  viable  manufacturing  process for shells and  expansion  into new
markets for its shell technology may result in the Company incurring  additional
losses due to the costs associated with these strategies. The Company expects to
incur losses until it is able to increase its sales, expand its product line and
increase its distribution  capabilities to a sufficient  revenue level to offset
ongoing operating and expansion costs. The Atlas Chemical acquisition  completed
on July 28, 1997 should  accelerate  the  Company's  plan to achieve  profitable
operations.


RESULTS OF OPERATIONS

THREE  MONTHS  ENDED  AUGUST 31, 1997  COMPARED TO THREE MONTHS ENDED AUGUST 31,
1996

Total  consolidated  revenue  for the three  months  ended  August 31,  1997 was
$463,568  compared to $171,777 for the same period of 1996,  which represents an
increase of $291,791 or 170%.  The increase was a result of both expanded  sales
of paint  products and coatings  produced by the Company's  paint  manufacturing
facility and the sales contribution for one month of the recently acquired Atlas
Chemical Company.

Gross profit margins were 39% and 54%, respectively,  for the three month period
ending  August 31, 1997 as compared to the prior period  ending August 31, 1996.
This  decrease is the result of a change in mix of paint and  coatings  products
sold by the Company and the lower margin  contribution of Atlas Chemical.  It is
expected that with the higher levels of materials purchases,  economies of scale
from the combined  business  will allow the Company to benefit from higher gross
profit margins in the future.

For the  three  months  ended  August  31,  1997,  total  selling,  general  and
administrative  expenses(S,G & A) were $497,585, as compared to $278,210 for the
same period of the previous year, an increase of $219,375, or 79%. This increase
was due to higher  expenses  incurred by the company in marketing,  staffing and
other  expenses  associated  with the  Company's  operations  together  with the
additional  costs for SG & A of the Atlas  Chemical  operation.  The Company has
taken  steps  to  reduce  duplication  of  personnel  and is in the  process  of
consolidating  its staffing,  marketing,  and  production for more efficient and
effective business operations.  With the expanded distribution provided with the
Atlas acquisition,  the Company should receive substantial benefit from sales of
its new coatings  products to national  customers.  These efforts will allow the
Company to significantly grow its business over the next twelve months.

The Company  continued to experience a loss from  operations of $317,301 for the
period  ending  August 31, 1997 as  compared to a loss of $184,982  for the same
prior year period. The higher consolidated gross profit for this period was more
than offset by the higher level of S, G & A expense  incurred  during this three
month  period  and  consequently  contributed  to  the  higher  operating  loss.
Management   anticipates  that  increasing   levels  of  sales,   including  the
significant  contribution  of the Atlas  business will result in  improvement in
future operating performance.

                                       8
<PAGE>

                          THERMACELL TECHNOLOGIES, INC.


Based upon management's  current estimates of future taxable income,  management
has determined that a valuation  allowance of fifty percent (50%) is appropriate
during the current  period ending  August 31, 1997 to represent  that portion of
deferred taxes that may be realized in the future.

The net loss,  after income taxes benefit,  and net loss per share were $270,874
and $.09 per share  respectively,  for the three months ended August 31, 1997 as
compared to a net loss and net loss per share of $195,017 and $.28 respectively,
for the same period in 1996. There was no interest expense in the present period
as  compared  to the prior  year's  quarter.  Although  the loss for the  period
increased,  the earnings per share  declined due to the greater number of shares
outstanding for the period because of the shares issued in the Company's  recent
successful underwriting.

With the financial resources provided by the underwriting,  the Company plans to
aggressively market its paint and coatings products,  with the added opportunity
presented by the Atlas acquisition to sell to numerous new customers. A focus of
its  strategy  will  continue to be to expand  within the Sunbelt  Region of the
United  States.  In  addition  to the  Company's  marketing  efforts,  the Atlas
acquisition  has more than doubled the Company's  production  capabilities  that
could support higher levels of sales of its proprietary products.  Management is
optimistic about the benefits of its near-term marketing programs.

The  Company  anticipates  that  improved  raw  material  purchasing  economies,
particularly with the purchase of Atlas Chemical, will result in cost savings in
raw material  purchases within its  manufacturing  operation.  This benefit will
only partially benefit Fiscal Year 1997 but its major impact will be felt during
the next fiscal year. The Company therefore anticipates improvement in its gross
profit margins during the forthcoming  year as the Atlas Chemical  business sees
these improved purchasing economies.

The  completion of its Initial  Public  Offering  ("IPO") during March 1997, the
second  quarter of its fiscal year,  has  provided  the Company with  sufficient
capital  to meet its  present  working  capital  needs  and  provides  funds for
expansion of its operations for at least the next twelve months.

NINE MONTHS ENDED AUGUST 31, 1997 COMPARED TO NINE MONTHS ENDED AUGUST 31, 1996

Total revenue for the nine months ended August 31, 1997 was $878,511 compared to
$430,597 for the same period of 1996,  which represents an increase of $447,914,
or 104%.  The  increase  was a result  of the  sales  contribution  of the Atlas
Chemical  acquisition  completed  recently  together with the expanded  sales of
paint products and coatings produced by the Company.  These increased sales were
a direct result of increased marketing efforts and production capabilities.

                                       9
<PAGE>

                          THERMACELL TECHNOLOGIES, INC.


Gross profit margins were 44% and 42%, respectively,  for the present nine month
period  ending August 31, 1997 as compared to the prior period ending August 31,
1996.  This  increase  was the  result of a change in mix of paint and  coatings
products sold with the higher margined products  contributing more significantly
during the period.

For  the  nine  months  ended  August  31,  1997,  total  selling,  general  and
administrative  expenses were  $1,114,495,  as compared to $754,190 for the same
period of the previous year, an increase of approximately $360,305, or 48%. This
increase  was due to higher  expenses  incurred  by the  company  in  marketing,
staffing  and  other  expenses  associated  with the  Company's  operations.  In
addition,  severance compensation equivalent to $55,000, a one year salary for a
former officer of the Company was expensed  during this period.  With the recent
acquisition of Atlas Chemical  Company,  it is anticipated that expansion of the
Company's business  operations will be undertaken.  It is further anticipated by
management that the Company will significantly expand its business over the next
twelve months.

The Company  continued to experience a loss from  operations of $728,790 for the
period nine month  ending  August 31, 1997 as compared to a loss of $572,279 for
the same prior year period.  Although the gross profit  increase for the current
period was $203,794,  this higher margin  contribution  was offset by the higher
level of S G & A expense incurred. Management anticipates that increasing levels
of sales  while  maintaining  the same SG & A expense  level  will  result in an
improvement in its future operating performance.

Based upon management's  current estimates of future taxable income,  management
has determined that a valuation  allowance of fifty percent (50%) is appropriate
during the current  period ending  August 31, 1997 to represent  that portion of
deferred taxes that may be realized in the future.

The net loss,  after income taxes benefit,  and net loss per share were $746,265
and $.36 per share  respectively,  for the nine months  ended August 31, 1997 as
compared to a net loss and net loss per share of $577,425 and $.82 respectively,
for the same period in 1996.  This current period loss was higher but due to the
effect of more common shares outstanding, the loss per share was proportionately
reduced.  During  these two  comparable  periods,  the weighted  average  shares
outstanding  increased  from  707,515 to  2,063,690.  This  increase is directly
attributed to the Company's successful  underwriting that was concluded in March
1997.

                                       10
<PAGE>

                          THERMACELL TECHNOLOGIES, INC.


LIQUIDITY AND CAPITAL RESOURCES

To  date,  the  Company  has  funded  its  operations  and  product  development
activities with funds provided by issuing securities and from borrowings. During
the nine months ending August 31, 1997,  the Company raised  approximately  $5.3
million through its successful  public offering.  On March 19, 1997, the Company
completed this public offering for 1,375,000 Units,  each Unit consisting of one
share of Common  Stock,  $.0001 par value,  and one Series A  Redeemable  Common
Stock  Purchase  Warrant,  at a price  of  $4.00  per  Unit.  In  addition,  the
underwriter  exercised its over-allotment  purchase option and purchased 206,250
additional  Units  at the  initial  per  Unit  public  offering  price  less the
underwriting discounts and commission.  The Company repaid its indebtedness with
the proceeds of this Offering or the conversion of a portion of its  outstanding
notes into common stock.

Although the Company is not presently  profitable,  its recent  public  offering
enables it to continue  to self fund its  business.  Once the  Company  achieves
profitability,  it will be in a position to fund itself on an  operating  basis.
The successful completion of the Offering in March 1997 has provided the Company
with capital to both improve its working capital position and provides  adequate
capital resources for future  operations.  The Company has focused its marketing
efforts  within the Sunbelt  Region of the United  States to  increase  consumer
awareness and  acceptance of both its existing and new products.  In addition to
this marketing effort,  the Company has expanded its manufacturing  capabilities
through  the  recent  Atlas  acquisition  that will  enable it to  substantially
increase  production  of  its  proprietary  products.  Management  believes  the
proceeds from the Offering  provided  sufficient  working  capital to enable the
Company to sustain its  operations and finance  planned  expansion over the next
twelve months.

For the nine month period ended August 31, 1997,  the Company's net cash used in
operating activities was $1,911,759 in the current period compared with $823,929
used in operating activities in the comparable period last year. In this period,
cash used in operating  activities  principally resulted from a greater net loss
and the  expansion of the  Company's  business  requiring  it to support  higher
levels of accounts receivables, inventory and other assets. The major portion of
these assets are attributed to the acquisition of Atlas Chemical Company.

Net cash used in investing activities for the nine month period ended August 31,
1997 was $521,245 compared to $254,241 in the prior year,  primarily  attributed
to higher levels of capital  expenditures and carrying of notes  receivables and
advances.

Net cash from  financing  activities  for the nine month period ended August 31,
1997 was  $3,332,671  compared to $1,011,675  in the prior  period.  The present
period  included  the  successful  underwriting  in  which  the  Company  raised
approximately $5.3 million and used $2.0 million to repay notes payables. In the
year ago period,  the Company obtained bridge financing to assist in maintaining
operations  while it  sought  to  finalize  a  pending  public  offering  of its
securities.

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                          THERMACELL TECHNOLOGIES, INC.


As of August 31,  1997,  the Company had net working  capital of  $1,349,348  as
compared  to a deficit net working  capital at  year-end  November  1996 of $2.4
million.  The Company's working capital position  improved  primarily because of
its IPO that  increased cash available to the Company and allowed the support of
increased levels of accounts  receivables and inventory while decreasing current
liabilities.  The  decrease  in  current  liabilities  is  primarily  due to the
repayment of bridge loans obtained during the prior year. The Company's ratio of
current assets to current liabilities was 2.3 at August 31, 1997.

                            
PART II - OTHER INFORMATION

Item 1.           LEGAL PROCEEDINGS.
                  ------------------
     On May 2, 1997,  the Company  was served  with a summons  regarding a civil
action filed in the United States District Court,  Eastern  District of Michigan
by IA, Inc., as plaintiff,  that alleges the Company,  and its  president,  John
Pidorenko,  and Monroe  Parker  Securities,  Inc.,  the  Company's  underwriter,
breached a  marketing  agreement  executed  by Mr.  Pidorenko  on March 26, 1992
relating to  technologies  developed  by IA,  Inc.  This  agreement  contained a
confidentiality and non-disclosure clause for technologies purportedly developed
by IA, Inc. The Company was not a party to that agreement.  The Company believes
that it has not infringed on any patents held by IA, Inc.,  non-withstanding the
validity of such patents  and/or their claims.  The petition  requested  various
court actions  including a jury trial, but no specific request for damages.  The
Company intends to vigorously defend itself in this action. The Company believes
it has meritorious  defenses in this matter which is in a preliminary  stage and
which will not be resolved until a considerable period of time has elapsed.  The
Company  has  agreed to  indemnify  the  Monroe  Parker  Securities,  Inc.,  its
underwriter, against any claims asserted by this party.

     On September 3, 1997 the Company and Mr. Pidorenko were named as defendants
in a lawsuit  filed in  Sarasota  County,  Florida  by Mr.  Kevin  Horrell.  The
complaint alleges,  among other matters,  that Mr. Horrell is entitled to 33,334
shares of the Company's  common stock as part of his past funding  arrangements,
repayment of attorney fees and costs and enforcement of a settlement  agreement.
The  Company  believes  it has  meritorious  defenses to the claims and that the
ultimate  resolution of this matter will not have a material  adverse  effect on
its financial condition.

Item 5.   OTHER INFORMATION
          -----------------
     On June 10,  1997,  Mr.  Gerald  Couture was  appointed  Vice  President of
Finance  and Chief  Financial  Officer of the  Company. In addition, on June 10,
1997,  Mr.  Couture and Mr.  Stephen  Drescher  were  appointed  to the board of
directors of the Company.  On August 25, 1997, Mr. Darryl Riley, a member of the
Board of Directors of the Company resigned.

     The Board of Directors of the Company authorized on September 29, 1997, the
changing of the Company's fiscal year to September 30 rather than a November 30
fiscal year end.This will result in a ten month period for the short year ending
September 30, 1997.

Item 6.  EXHIBITS AND REPORTS ON FORM 8K
         -------------------------------
         Form 8K, dated August 1, 1997 is incorporated herein by reference.
         Form 8K/A, Amendment No.1, dated August 14, 1997 is incorporated herein
         by reference.

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                          THERMACELL TECHNOLOGIES, INC.

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 : 10/14/97                             /s/ Gerald Couture
                                             ----------------------------
                                             Gerald Couture
                                             Vice-President,Finance and CFO



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