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 June 30, 1999

         [   ]  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.)

                     1125 Commerce Blvd., Sarasota, FL 34243
                     ---------------------------------------
                    (Address of Principal Executive Offices)

                                 (941) 358-0306
                                 --------------
                           (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 June 30, 1999 was 8,149,769.

         Transitional Small Business Disclosure Format:

Yes      No X
   ---     ---

<PAGE>


                 THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES


                                      Index



                                                                         Page
Part I - Financial Information                                           ----

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets -
           June 30, 1999 and September 30, 1998......................   1 - 2

         Consolidated Statements of Operations -
           Three months and nine months ended June 30, 1999 and 1998.     3

         Consolidated Statements of Cash Flows -
           Nine months ended June 30, 1999 and 1998..................     4

         Notes to Consolidated Financial Statements..................   5 - 6

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations.......................   7 - 11

Part II - Other Information

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

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

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


                                       i
<PAGE>

<TABLE>
<CAPTION>

                                 THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES

                                          Consolidated Balance Sheets


                                                     Assets



                                                                          June 30,             September 30,
                                                                            1999                    1998
                                                                    ---------------------   ---------------------


<S>                                                                <C>                     <C>
Current assets
   Cash                                                             $            496,320    $             67,405
   Accounts receivable
      Trade, net of allowance for uncollectible accounts
      of $95,125 and $64,591, respectively                                       359,360                 314,262
   Notes receivable - trade                                                      273,565                  52,000
   Notes receivable - other                                                       75,000                  76,622
   Other current assets                                                           72,156                  18,998
   Inventories                                                                 1,036,185                 489,259
   Prepaid expenses                                                              933,859                 161,308
                                                                    ---------------------   ---------------------

          Total current assets                                                 3,246,445               1,179,854
                                                                    ---------------------   ---------------------

Property and equipment                                                         1,577,662               1,141,502
   Less - accumulated depreciation                                               374,079                 248,530
                                                                    ---------------------   ---------------------
                                                                               1,203,583                 892,972
                                                                    ---------------------   ---------------------

Other assets
   Deposits                                                                       20,902                  16,266
   Deferred income tax benefit, net                                              966,980                 795,309
   Goodwill, net of accumulated amortization
      of $115,267 and $95,602, respectively                                    1,678,276                 815,010
   Other intangibles, net of accumulated amortization
      of $41,070 and $33,173, respectively                                       734,133                 162,469
                                                                    ---------------------   ---------------------
                                                                               3,400,291               1,789,054
                                                                    ---------------------   ---------------------




          Total assets                                              $          7,850,319    $          3,861,880
                                                                    =====================   =====================


</TABLE>

See notes to consolidated financial statements.

                                       1
<PAGE>

<TABLE>
<CAPTION>

                                     THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES

                                               Consolidated Balance Sheets


                                          Liabilities and Stockholders' Equity



                                                                                   June 30,             September 30,
                                                                                     1999                    1998
                                                                             ---------------------   ---------------------


<S>                                                                         <C>                     <C>
Current liabilities
   Accounts payable                                                          $          1,202,151    $            445,118
   Accrued expenses                                                                        27,257                  45,396
   Accrued payroll and payroll taxes                                                       21,432                  13,647
   Current maturities of long-term debt
      Notes payable                                                                        20,350                  20,340
      Capital leases                                                                       33,807                  38,644
                                                                             ---------------------   ---------------------

          Total current liabilities                                                     1,304,997                 563,145
                                                                             ---------------------   ---------------------

Long-term debt, net of current maturities
   Notes payable                                                                           94,830                  58,128
   Capital lease obligations                                                              113,423                  73,079
   Convertible note payable                                                             1,333,333                       -
                                                                             ---------------------   ---------------------
          Total long-term debt, net of current maturities                               1,541,586                 131,207
                                                                             ---------------------   ---------------------

          Total Liabilities                                                             2,846,583                 694,352
                                                                             ---------------------   ---------------------

Commitments and contingencies                                                                   -                       -

Stockholders' equity
   Preferred stock, Series A, par value $.0001
      5,000,000 shares, authorized, issued
      and outstanding                                                                         500                     500

   Preferred stock, Series B convertible, $1,000 stated value, 8% dividend
      Authorized 1,500 shares,
      0 and 250 issued and outstanding, respectively                                            -                 250,000

   Common stock, par value $.0001
      Authorized 20,000,000 shares,
       8,149,769 and 5,129,325 issued and outstanding, respectively                           815                     513

   Additional paid-in capital                                                           9,538,733               6,612,481
   Deduct notes receivable associated with stockholder loan                              (591,389)               (453,695)
   Accumulated deficit                                                                 (3,889,923)             (3,242,271)
   Treasury Stock                                                                         (55,000)                      -
                                                                             ---------------------   ---------------------

          Total stockholders' equity                                                    5,003,736               3,167,528
                                                                             ---------------------   ---------------------


          Total liabilities and stockholders' equity                         $          7,850,319    $          3,861,880
                                                                             =====================   =====================


</TABLE>

See notes to consolidated financial statements.


                                       2
<PAGE>

<TABLE>
<CAPTION>
                                         THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES

                                            Consolidated Statements of Operations
                                                         (Unaudited)



                                                For the Three Months Ended                    For the Nine Months Ended
                                          ---------------------------------------       ---------------------------------------
                                              June 30,               June 30,               June 30,               June 30,
                                                1999                   1998                   1999                   1998
                                          -----------------       ---------------       -----------------       ---------------

<S>                                     <C>                    <C>                   <C>                     <C>
Revenue
    Sales                                        1,310,625      $        789,183      $        3,250,976      $      2,259,814

Less cost of sales                                 922,980               497,462               2,274,825             1,464,318
                                          -----------------       ---------------       -----------------       ---------------

    Gross profit                                   387,645               291,721                 976,151               795,496

Selling, general and administrative
    expenses                                       624,738               430,055               1,810,052             1,178,124
                                          -----------------       ---------------       -----------------       ---------------

        Loss from operations                      (237,093)             (138,334)               (833,901)             (382,628)
                                          -----------------       ---------------       -----------------       ---------------

Other income (expense)
    Interest income                                      -                15,405                   4,431                40,471
    Interest expense                               (19,430)                    -                 (28,894)               (6,894)
    Other                                                -                 4,368                       -                51,108
                                          -----------------       ---------------       -----------------       ---------------

        Total other income (expense)               (19,430)               19,773                 (24,463)               84,685
                                          -----------------       ---------------       -----------------       ---------------

        Loss before income taxes                  (256,523)             (118,561)               (858,364)             (297,943)

Income taxes
    Deferred income tax benefit                     51,305                23,712                 171,672                59,589
                                          -----------------       ---------------       -----------------       ---------------

        Net loss                        $         (205,218)     $        (94,849)     $         (686,692)     $       (238,354)
                                          =================       ===============       =================       ===============


Basic loss per common share             $            (0.02)     $          (0.02)     $            (0.09)     $          (0.07)
                                          =================       ===============       =================       ===============

Weighted average number of
    common shares outstanding                    8,696,238             4,153,620               7,575,889             3,432,484
                                          =================       ===============       =================       ===============


</TABLE>


See notes to consolidated financial statements.


                                       3
<PAGE>

<TABLE>
<CAPTION>

                                          THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES

                                              Consolidated Statements of Cash Flows
                                                           (Unaudited)


                                                                                                  For the Nine Months Ended
                                                                                            ---------------------------------------
                                                                                                June 30,              June 30,
                                                                                                  1999                  1998
                                                                                            ------------------    -----------------

<S>                                                                                       <C>                    <C>
Cash flows from operating activities:
   Reconciliation of net loss to net cash
      used in operating activities
        Net loss                                                                           $         (686,692)    $       (271,842)
        Adjustments to reconcile net loss to net
          cash used in operating activities
          Depreciation                                                                                125,549               99,830
          Amortization                                                                                 27,562               58,634
          Deferred income tax benefit                                                                (171,672)             (59,589)
        Changes in assets and liabilities, net of acquisitions
          (Increase) decrease in accounts and notes receivable                                         90,053              (65,415)
          (Increase) in inventories                                                                  (215,416)            (145,509)
          (Increase) in prepaid and other assets                                                     (727,059)            (213,156)
          Increase (decrease) in accounts payable                                                     196,969             (161,470)
          Increase (decrease) in accrued expenses                                                     (15,415)            (315,622)
          Prior period adjustment                                                                     (39,040)                   -
                                                                                            ------------------    -----------------
                 Net cash used in operating activities                                             (1,415,161)          (1,074,139)
                                                                                            ------------------    -----------------

Cash flows from investing activities
   Capital expenditures                                                                               (71,160)            (331,188)
   Acquisitions                                                                                    (1,396,220)             (73,340)
   Expenditures for patent, net                                                                      (577,956)             (30,000)
                                                                                            ------------------    -----------------
                 Net cash used in investing activities                                             (2,045,336)            (434,528)
                                                                                            ------------------    -----------------

Cash flows from financing activities
   Proceeds from issuance of common stock                                                           2,926,554              122,955
   Proceeds from issuance of Series B preferred stock                                                       -            1,500,000
   Proceeds from issuance of notes payable                                                             92,025               61,407
   Proceeds from issuance of convertible note                                                       1,333,333                    -
   Conversion of  Series B preferred to common stock                                                 (250,000)
   Principal payments on notes payable                                                                (19,806)             (10,624)
   Principal advances on stockholder loan                                                            (137,694)                   -
   Proceeds from payments on stockholder loan                                                               -              100,486
   Costs associated with obtaining financing                                                                -             (300,000)
   Purchase of treasury stock                                                                         (55,000)             (40,000)
                                                                                            ------------------    -----------------
                 Net cash provided by financing activities                                          3,889,412            1,434,224
                                                                                            ------------------    -----------------

                 Net increase in cash                                                                 428,915              (74,443)

Cash beginning                                                                                         67,405              580,522
                                                                                            ------------------    -----------------

Cash ending                                                                                $          496,320     $        506,079
                                                                                            ==================    =================


</TABLE>

See notes to consolidated financial statements.

                                       4
<PAGE>


                 THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

Note 1 - Basis of presentation

The accompanying  unaudited  consolidated  financial  statements,  which are for
interim  periods,  do  not  include  all  disclosures  provided  in  the  annual
consolidated  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 fiscal  period  ended  September  30, 1998 of
ThermaCell Technologies,  Inc. (the "Company"), as filed with the Securities and
Exchange Commission.

In the opinion of management,  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  months and nine months  ended June 30,  1999 are not  necessarily
indicative of the results to be expected for the full year.

Note 2 - Basic loss per share calculations

The  computation of net earnings (loss) per common share has been based upon the
weighted  average  number of shares of outstanding  common stock,  which for the
three month  periods  ended June 30, 1999 and June 30, 1998 were  8,696,238  and
4,153,620,  respectively.  The weighted average number of shares outstanding for
the nine month periods ended June 30, 1999 and June 30, 1998 were  7,575,889 and
3,432,484, respectively.

Note 3 - Accounting Change

The Company adopted Statement of Accounting  Standards #128, Earnings per Share,
during the quarter  ended  December 31,  1997.  Since the Company has reported a
loss  only the  basic  earnings  (loss)  per share is  thereby  reported  as the
reporting of diluted  loss per share would be  anti-dilutive.  The  inclusion of
converted  preferred  shares in the  calculation of weighted  average shares for
diluted  earnings per share  purposes would be  anti-dilutive  and per FASB 128,
cannot be included in the financial statements.

Note 4 - Equity Transactions

On June 22, 1999 the Company issued a 9% convertible promissory note in the face
amount of $666,667 for cash consideration of $500,000 before placement fees. The
note's  maturity  is July 1,  2002,  and  allows  the  holder to  purchase  this
Company's common stock at 105% of the market price at the time of conversion.

On August 6, 1999,  the  Company's  board of  directors  waived  conditions  for
conversion of the preferred  stock Series A, held by its Chairman and President.
The original number of such preferred  shares  outstanding was 5,000,000 but was
subsequently changed to 2,500,000 shares in January 1998 to facilitate an equity
funding.  The conversion features remained as originally  designated and allowed
conversion into 1.25 million shares of the Company's  common stock. The Board of
Directors authorized the issuance of common stock in exchange for the retirement
of this  preferred  stock.  Conversion  rights for this preferred had originally
been  allowed  if the  company  had  achieved  any  one  quarter  of  profitable
operations  and  any  one  year  of  profitable  operations.  Neither  of  these
conditions was achieved. The conversion of this series A preferred stock amended
to 2,500,000 in January  1998,  allowed the holder to vote  2,500,000  shares on
matters that come before and are voted on by the common stock shareholders.  The
retirement of this preferred  issue  eliminates  these voting  privileges in the
Company's capital structure.

                                       5
<PAGE>



                 THERMACELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)


Notes to Consolidated Financial Statements (Continued)

In May 1999,  the  Company  and  Innovation  Associates,  Inc.("IA")  reached an
agreement  and settled  litigation  that was  commenced by IA for trade  secrets
misappropriation  among  other  matters.  As  part  of the  settlement  of  this
litigation,  the  Company  has agreed to license  certain  patents  relating  to
microspheres that are owned by IA. Consideration for such license is the payment
of $25,000 and the  issuance of 470,544  shares of the  Company's  common  stock
having a value of $500,000.  This common stock bears a restrictive  legend as to
marketability  but provides a penalty should this stock not be registered by the
Company within 150 days. If the Company is not able to provide  registration  of
these shares by November 7, 1999, than an additional payment of $62,500 worth of
common stock is to be made. With this licensing of IA's patents,  all litigation
is  dismissed.  The  Company  intends to utilize the IA's  patents  with its own
microsphere technologies to strengthen its patent position in this field.

                                       6
<PAGE>

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

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 New Port Richey,
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.  The net proceeds  from this
offering was more than $4.7 million.

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
paints and coatings and to obtain an established marketing  distribution channel
which included major retail paint accounts such as Ace Hardware, among others.

On March 2, 1998, the Company  acquired the assets of Ladehoff  Paints,  Inc., a
paint manufacturer and distributor located in Mesa, Arizona.  The total purchase
price was $115,000. This acquisition is classified as a purchase transaction.

The Company  acquired  T-Coast  Pavers/Sealco  Systems,  Inc.,  which had annual
revenues of about $2 million,  on December 1, 1998 for 300,000  shares of common
stock  valued at $300,000  and an  employment  agreement  with its founder  that
requires an earn-out of an additional  300,000 shares over three years.  T-Coast
Pavers/Sealco  Systems.  provides paver  installation  and driveway  sealant and
coating services primarily to contractors in Southeast Florida.


                                       7
<PAGE>


The Company  acquired  American  Paints,  Inc., a Pompano  Beach,  Florida paint
manufacturer and distributor  with $2.5 million in annual revenues,  for 572,000
common shares on December 1, 1998. American Paints' production capabilities have
been  consolidated  into the Company's  Atlas  manufacturing  facility while its
retail operations remain in Pompano Beach.

On January 22, 1999, the Company launched its  www.paint-n-stuff.com  e-commerce
web site that includes more than 10,000 name brand home, boating, and commercial
building paint,  hardware  supplies and other improvement items for contractors,
dealers and consumers.  This  represents the first time such a complete array of
these products has been offered on a internet site.

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.

RESULTS OF OPERATIONS

Three months ended June 30, 1999 compared to three months ended June 30, 1998

Total  consolidated  revenue  for the  three  months  ended  June  30,  1999 was
$1,310,625 compared to $789,183 for the same period of 1998, which represents an
increase of $521,442,  or 66%.  This  increase was  primarily  attributed to the
additional  revenues  of two recent  acquisitions:  American  Paints and T-Coast
Pavers/Sealco Systems, Inc. ("Sealco").  The revenues for the Company's existing
business declined for this period as compared to the prior period.  This decline
resulted  from loss of  customers  because  of  severe  competition  within  the
Company's  Florida  markets.  The Company  has  elected to  maintain  its profit
margins on its business  rather than resort to competitive  bidding.  Management
feels that at this stage in the Company's  development  this is the more prudent
strategy.

Gross profit margins were 30% and 37%, respectively,  for the three month period
ended June 30, 1999,  as compared to the prior period ended June 30, 1998.  This
decrease  is the  result of a change in the mix of paint and  coatings  products
sold by the Company,  and in part, by lower contribution  margin from the Sealco
acquisition. Sealco has traditionally had gross profit margins in the 16% range.
The Company expects that continued buying efficiencies and supplying all coating
and sealant  needed for the Sealco  operations  are expected to further  improve
profit  margins.  During the recent quarter ended,  Sealco's gross profit margin
was 24%.

For  the  three  months  ended  June  30,  1999,  total  selling,   general  and
administrative  expenses  were  $624,738 as  compared  to $430,055  for the same
period of the previous  year, an increase of $194,683,  or 45%. This increase is
the result of higher marketing,  staffing and other general expenses  associated
with both of the Company's  acquisitions.  The Company has taken steps to reduce
duplication  of personnel  and has  consolidated  its staffing,  marketing,  and
production for more efficient and effective  business operation for the American
Paint acquisition.  With the expansion of distribution  channels provided by the
American Paints, the Company  anticipates  substantial benefit from the sales of
products to an expanded customer base.

The Company  experienced a loss from  operations of $237,093 for the three month
period  ended June 30, 1999 as compared to a loss of $138,334 for the same prior
year period. This increase in the operating loss over that of the preceding year
period reflects the lower gross margin  contribution from the Company's revenues
and the higher S. G & A expense during this period.  Management anticipates that
increasing  levels of sales,  including the  contribution  of both of the recent
acquisitions,  will result in improvement in future  operating  performances and
eventually profitable operations.


                                       8
<PAGE>


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  ended June 30,  1999 to  represent  that  portion of
deferred taxes that may be realized in future periods.

The interest  expense for the period ended June 30, 1999 was $19,430.  There was
no interest in the prior years  quarter.  The  interest  expense for the current
period was incurred primarily from debenture and vehicle  financings.  The prior
period  benefited  from  interest  income of  $15,405.  There was no  comparable
benefit in the period ended June 30, 1999.

The basic loss, after income tax benefit, and basic loss per share were $205,218
and $0.02 per share  respectively,  for the three  months ended June 30, 1999 as
compared  to a basic  loss  and  basic  loss  per  share  of  $94,849  and  $.02
respectively,  for the same period in 1998. This loss represents a 116% increase
over the basic loss experienced in the year ago quarter.  The loss per share for
the period was same as the loss per share of the year ago period.  The  weighted
average shares  outstanding for the quarter ended June 30, 1999 was 8,696,238 as
compared to 4,153,620 for the preceding year quarter ended June 30, 1998.

The Company has focused,  in the recent two quarters on the consolidation of the
acquired  American Paint  operations with its Miami based  production  facility.
Presently all paints are  manufactured at that Miami location.  The company will
aggressively market its paint and coatings products,  with the added opportunity
to sell its  expanded  product  line to a greater  customer  base.  Management's
strategy will be to continue to expand  within the Sunbelt  Region of the United
States. In addition to the Company's marketing efforts,  the recent acquisitions
will further the  utilization  of the  Company's  paint and coatings  production
capacity.  Management  continues  to be  optimistic  about the  benefits  of its
near-term strategy.

The Company anticipates  improvements in raw material purchasing  economies will
result in further cost savings in its purchases for its manufacturing operation.
This benefit will  continue in this fiscal  year.  The Company also  anticipates
improvement  in gross  profit  margins  during the  balance of this  fiscal year
resulting from these improved purchasing economies.

Nine months ended June 30, 1999 compared to nine months ended June 30, 1998

Total revenue for the nine months ended June 30, 1999 was $3,250,976 compared to
$2,259,814  for the same  period  of  1998,  which  represents  an  increase  of
$991,162,   or  44%.  The  increase  was  primarily  the  result  of  the  sales
contribution   of  the  American  Paints  and  T-Coast   Pavers/Sealco   Systems
acquisitions that more than offset revenue losses in the Company's core business
segment  because  of  competitive  factors.  Business  was lost when  management
decided to forgo price concession with customers and instead decided to maintain
its present pricing structure.

Gross profit margins were 30% and 35%,  respectively,  for the nine-month period
ending June 30, 1999 as compared to the prior period ending June 30, 1998.  This
decrease  is the  result of a change in the mix of paint and  coatings  products
sold by the Company,  and in part, by lower contribution  margin from the Sealco
acquisition.  Sealco has traditionally had gross profit margins in the 16% range
but that margin has improved to 24% since the  acquisition.  Sealco's  margin is
lower than the margins in the Company's paint business.

For  the  nine  months  ended  June  30,  1999,   total  selling,   general  and
administrative  expenses were  $1,810,052 as compared to $1,178,124 for the same
period of the previous  year, an increase of $631,928,  or 54%. This increase is
primarily the result of the Company's recent  acquisitions and once the expected
consolidation  of  operations  is  completed,  S G & A expenses  are expected to
become  a  lower  percentage  of  sales.  Management  anticipates  that  further
increases in sales while controlling its S G & A expense levels,  will result in
an improvement in its future operating performance.

The Company  continued to experience a loss from  operations of $833,901 for the
nine month period ending June 30, 1999 as compared to a loss of $382,628 for the
same prior year period.

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<PAGE>


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 June 30, 1999 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 was $686,692 for
the nine months  ended June 30,  1999 as compared to a net loss of $238,354  for
the same period in 1998.  This  represented  an increase in the loss of $448,338
for this period as compared to the year before  nine-month period ended June 30,
1998.  The basic  earnings  (loss) per share was $0.09 for the nine months ended
June 30,  1999 as  compared  to $0.07 on the same  basis for the same  period in
1998. The diluted  earnings  (loss) per share are also $0.09 and $0.07 for these
respective  periods.  This current  nine-month  period loss per share was higher
even  though  there  is  a  dilutive   effect  with  more  common  shares  being
outstanding.  During these two comparable  periods,  the weighted average shares
outstanding  increased from 3,432,484 to 7,575,889.  This increase is attributed
to the  Company's  convertible  preferred  stock  Series B financing  undertaken
during fiscal year 1998,  being  exchanged  into common  stock,  the issuance of
common  stock for two  acquisitions,  common stock issued for the license of the
Innovative  Associates microshell patents and the dilutive effect of outstanding
stock options.


LIQUIDITY AND CAPITAL RESOURCES

The Company continues to fund its operations and product development  activities
with funds provided by issuing  securities and from borrowings.  During the nine
months ended,  the Company  raised $1.25  million,  before  placement  expenses,
through an equity funding and the issuance of two convertible debentures. During
the year,  the  Company  completed  conversion  of the  "Series  B"  convertible
preferred stock with the issuance of 1,405,000  shares of its common stock.  The
Company issued 9% redeemable  convertible debentures in two tranches in the face
amount of $1,333,333 for net proceeds of $1,000,000  before placement  expenses.
The Company received approximately $801,000 after placement fees, legal fees and
related  expenses.  Each of these two  debentures are for  $666,666.67  and have
maturity  dates of March 1, 2002 and July 1,  2002,  respectively.  Furthermore,
each allows  conversion  into common  stock at a 105% of the market  price three
days prior to the election to convert.  Proceeds from the  debentures  were used
for working capital purposes.

The issuance of common stock during the nine-month  period  included the payment
to retire the  convertible  preferred  stock series B and to provide the Company
with $250,000 in additional funding. The Company received a general release from
the preferred stock Series B investor on March 4, 1999.  During this fiscal year
the Company had issued 1.4 million  shares of its common  stock to satisfy  this
preferred  stock  conversion   requirement.   In  addition,  the  Company's  two
acquisitions of American Paint and T-Coast  Pavers/ Sealco Systems  included the
issuance of a total of 872,000  shares of common stock with  300,000  additional
shares being issued in escrow on an earn-out basis. Common stock was also issued
for license of certain patents of IA Inc. as part of that litigation settlement.

Net cash used in  operating  activities  for the nine months ended June 30, 1999
was $1,415,161 compared to net cash used of $1,074,139 for the nine months ended
June 30, 1998.  This  increase in cash used by operating  activities  reflects a
higher net loss for the current  period and an  increase in prepaid  assets were
offset by higher level of accounts payables.

Cash used in  investing  activities  for the nine months ended June 30, 1999 and
1998 were $2,045,336 and $434,528,  respectively. The principal use of funds was
for two  acquisitions-  American  Paints and T-Coast/  Sealco Systems  completed
during this period and for patent  licensing that involved the settlement of the
Innovative  Associates  litigation.  In addition,  capital  expenditures for the
recent period  decreased to $71,160 from $331,188 over the prior year's  period.
There was not an acquisition in the year ago period.


                                       10
<PAGE>


Cash  provided by financing  activities  for the nine months ended June 30, 1999
was  $3,889,412  as compared to cash used in financing  activities of $1,434,224
for the nine months ended June 30, 1998.  During the recent period,  the Company
issued  common stock with an aggregate  value of  $2,926,554  for  acquisitions,
conversion  of preferred  stock Series B and payment of services to  consultants
and  employees.  For the  present  period,  convertible  notes in the  amount of
$1,333,333  were  issued.  These  notes bear  annual  interest  of 9% and have a
three-year  maturity,  but are  convertible  into the  Company's  common  stock.
Shareholder  loans increased  during this period that included the assumption of
certain company incurred professional expenses by a shareholder.

As of June 30,  1999,  the  Company  had net working  capital of  $1,941,448  as
compared to $616,709 at fiscal year ended  September 30, 1998.  This increase in
net working  capital of  $1,324,739  is primarily  due to higher levels of cash,
accounts receivable  including note receivables from customers,  and inventories
while this increase was offset,  in part, by higher accounts  payable level. The
Company's  ratio of current  assets to current  liabilities  was 2.5 at June 30,
1999 and 2.1 at fiscal year ended September 30, 1998.

The Company is not  presently  profitable  and continues to fund itself from the
proceeds of securities  placements and debt fundings.  Once the Company achieves
profitability,  it will then be in a  position  to fund  itself on an  operating
basis.

The Company  continues to focus 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
positioned  itself  to  expand  the  near  term  production  of its  proprietary
products.

Management  believes that additional  capital will be needed to fund its present
plan to build a  manufacturing  facility  to  produce  shells  for its paint and
coating technology  products.  The Company is optimistic that such funds will be
available  from  investment or financing  sources to provide for this  expansion
plan.  Should funds not be readily  available,  management  intends to defer the
building of the manufacturing  facility to a later time when appropriate funding
can be arranged. The Company is in need of additional funding to provide for its
working  capital  requirements  over the next six months to supplement  the cash
proceeds that can be generated  from its recently  acquired  businesses.  Should
such funding not be available,  the Company would have to significantly  curtail
its planned operations to achieve breakeven operations.

On August 6, 1999,  the  Company's  board of  directors  waived  conditions  for
conversion  of the  preferred  stock,  "Series  A",  held  by its  Chairman  and
President.  The Company authorized the issuance of 1.25 million shares of common
stock in exchange for the retirement of this preferred stock.  Conversion rights
for this preferred had  originally  been allowed if the company had achieved one
quarter of  profitable  operations  and any one year of  profitable  operations.
Neither of these  conditions  was  achieved.  The  conversion  of this  series A
preferred  stock,  originally  5,000,000  shares but was amended to 2,500,000 in
January 1998,  allowed the holder to vote 2,500,000  shares on matters that come
before and are voted on by the common stock shareholders. The retirement of this
preferred  issue  eliminates the  super-voting  rights in the Company's  capital
structure.  In addition,  the Company's board of directors  required that within
180 days, the promissory  notes in the total amount of $591,389 owed the Company
by its  president  and  chairman be repaid in full. A further  consideration  in
retiring the Series A preferred  stock was the  simplification  of the Company's
capital structure to attract capital to fund the Company's future needs.

Enclosed in Item 5 attached as Exhibit 99 are the audited  financial  statements
for the Company's two most recent acquisitions, American Paints Inc. and T-Coast
Pavers/ Sealco Systems Inc., that the Company completed in December of 1998. The
presentation  included the operating results had each acquisition been completed
in the earlier fiscal periods.  This enclosure completes filing requirements for
the  presentation  of audited  financials for these  entities  combined with the
Company's historical results.


                                       11
<PAGE>


PART II - OTHER INFORMATION

Item 1.           Legal Proceedings.

In May  1999,  the  Company  and  Innovation  Associates,  Inc.  ("IA")  reached
agreement  and settled  litigation  that was  initiated by IA for trade  secrets
misappropriation  among other  allegations.  As part of the  settlement  of this
litigation,  the  Company  has agreed to license  certain  patents  relating  to
microspheres  that are owned by IA. The Company paid $25,000 and issued  470,544
shares of its common  stock  having a value of $500,000 to IA. This common stock
bears a restrictive  legend as to  marketability  but provides a penalty  should
this stock not be registered  by the Company  within 150 days. If the Company is
not able to provide  registration  of these shares by November 7, 1999,  then an
additional payment of $62,500 worth of the Company's common stock is to be made.
With  licensing of IA's  patents,  this  litigation  is  dismissed.  The Company
intends  to  utilize  IA's  patents  with its own  microsphere  technologies  to
strengthen its patent position in this field.

In February  1999,  the Company was notified that the Kevin  Horrell  litigation
against the  Company  and Mr.  John  Pidorenko,  the  Company's  president,  was
dismissed. A part of this settlement,  Mr. Pidorenko,  transferred 40,000 shares
of the Company's common stock, he personally owned, to Mr. Horrell.  The Company
did not make any payment in settlement of this matter.

On March 1, 1999, the Company reached a settlement agreement with David Feingold
and his law firm of Feingold & Kam,  RAM  Capital  Partners,  Ltd.,  Diversified
Lending Company and RAF Enterprises  regarding  compensation and the issuance of
the Company's common stock, among other matters. As a result of this settlement,
the Company's obligations to the investor who held a convertible preferred stock
issue was satisfied.  Other than the common stock the Company issued in November
1998, no further consideration was paid.

On February 4, 1999, a complaint was filed in the United States  District Court,
Middle District of Florida by Mr. Russell Haraburda and Eden Group, Inc. against
John Pidorenko,  the Company's president, and the Company for monies purportedly
due for  arranging  financing for the Company prior to its IPO in March of 1997.
The Company does not believe any monies are due Mr.  Haraburda  or his firm.  In
addition,  the Company has been assigned two promissory notes of the Eden Group,
Inc., Mr.  Haraburda's firm, that are unpaid. The Company will vigorously defend
itself  in this  matter  and will  seek  full and  complete  payment  under  its
promissory notes from the Eden Group.


Item 5.           Other Information

Audited Financial Statements for T-Coast/ Pavers, Inc. and American Paints, Inc.
and proforma statements for their respective financial results combined with the
Company for the indicated prior periods are attached in Exhibit 99.

Item 6.           Exhibits and reports on Form 8K

None.

                                       12
<PAGE>



                                   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    8/18/99
                                              /s/ Gerald Couture
                                              -------------------------------
                                              Gerald Couture
                                              Vice-President, Finance and CFO


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