<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 10-SB/A
AMENDMENT NO. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
DELAWARE 98-0208402
- ---------------------------------- -------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
1177 WEST HASTINGS STREET, #1818, VANCOUVER BC, CANADA V6E 2K3
- ------------------------------------------------------ -------
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's telephone Number, including area code (604) 602-1717
------------------------
Securities to be registered pursuant to Section 12(b) of the Act:
- --------------------------------------------------------------------------------
(Title of Class)
- --------------------------------------------------------------------------------
(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
<TABLE>
<CAPTION>
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ------------------------------
<S> <C>
Common Stock, $0.0001 Par Value OTC Bulletin Board
- ------------------------------------------------------------------ -----------------------------------
- ------------------------------------------------------------------ -----------------------------------
</TABLE>
<PAGE> 2
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF BUSINESS
(a) DEVELOPMENT OF BUSINESS
Bullet Environmental Technologies, Inc. (the "Company" or
"Registrant") was originally incorporated under the laws of the State of
Delaware on December 18, 1997 under the name of "Innovin Development
Corporation." The Company merged with Innovin, Inc., a Colorado corporation
effective March 5, 1998 with the Company as the surviving corporation. On March
5, 1998, in anticipation of going into the mining business, the Company amended
its Certificate of Incorporation to change its name to, "Anglo-Sierra Resources
Corp." On March 15, 1999, in order to reflect the Company's plan to market
certain waste treatment technology under the trade name "Bullet," the Company
again amended its Certificate of Incorporation to, among other things, change
its name to, "Bullet Environmental Technologies, Inc." The Company is filing
this Form 10-SB on a voluntary basis. The Company's registration under the
Securities Exchange Act of 1934 (the "Exchange Act") will be required in order
to successfully complete negotiations and consummation of its proposed
acquisition of a financial services business.
(b) BUSINESS OF REGISTRANT
Registrant is a development stage company and is not presently
engaged in any business. Accordingly, the auditors report on the Registrant's
financial statements notes that Registrant will require additional financing or
future profitability if it is going to remain as a going concern. Registrant has
entered into a non-binding letter of intent to acquire a company in the
financial services business. Since its formation, Registrant has explored
entering into various other businesses but did not commence operations in any of
these businesses. The particular businesses explored are:
- From December 18, 1997 until March 5, 1998, Registrant
explored the possibility of developing and constructing
wineries. Registrant is informed that prior management
identified several winery properties in British
Columbia, Canada, negotiated the proposed acquisition of
an interest in those properties, and attempted to raise
the funds required to consummate that acquisition.
Registrant is informed that efforts to raise the
necessary funds were not successful and the proposed
transaction was abandoned.
- From March 5, 1998 through February 26, 1999, Registrant
intended to develop mining properties. Mining rights in
two mining properties in British Columbia, Canada were
acquired and Registrant began efforts to develop those
rights and obtain financing for these efforts. However,
due to a subsequent decline in the price of gold ore,
the high costs to maintain and develop those mineral
rights, and the inability of the Company to raise
additional capital for these purposes, operation of
these properties never commenced and the Company
disposed of the mining rights on February 26, 1999.
- In March 1999, Registrant explored developing waste and
sewage treatment systems. On March 25, 1999, it acquired
a license to use certain waste treatment technology
utilizing the trade name "Bullet". The license entitled
Registrant to use commercially a patent-pending
technology for dissolving gases into liquids at low
pressure. Registrant intended to market the technology
for certain agricultural uses. Registrant's ability to
exploit the licensed technology in an economically
feasible manner relied in part upon the developer of the
technology being available to make technical
improvements, advise on the commercial application
of the technology and develop additional related
applications. The developer decided to focus his
efforts on applications of the technology in the
petroleum industry, an area not permitted by
Registrant's license. Accordingly, Registrant's
exploitation of the technology was no longer
economically feasible. No significant operations were
commenced and the license to use the Bullet technology
has since been cancelled.
- In May 1999, Registrant entered into a non-binding
letter of intent to acquire a broker-dealer which is
essentially a family-owned and operated business.
Subsequently, the parties were unable to agree on
various governance and management issues and the
letter of intent was terminated. On June 18, 1999
Registrant entered into a new non-binding letter of
intent with Somerset Financial Partners, Inc.
("Somerset"), a different financial services company.
Registrant is presently attempting to finalize its
agreement with Somerset for a transaction based on
this second letter of intent.
(c) REPORTS TO SECURITIES HOLDERS
Registrant does not currently file reports with the Securities and
Exchange Commission ("SEC"). Registrant expects to prepare and provide annual
reports to its security holders after registration under the Exchange Act.
A copy of the materials filed by the Registrant with the SEC may be
obtained and copied at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Information on the Public Reference Room may be
obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC at the site
http://www.sec.gov.
<PAGE> 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
(a) PLAN OF OPERATION. The Company's plan of operation is to acquire
a financial services company which currently offers a limited group of products
and expand the operations to create a company providing diversified business
services, including financial research, investment banking, money management,
and securities brokerage. In marketing these services, Registrant intends to
focus on emerging and high-growth companies. In this regard, the Company has
entered into a non-binding letter of intent with Somerset, the parent company of
a wholly-owned registered broker-dealer and member of the NASD. The transaction
with Somerset is subject to the parties agreement on final economic terms and
definitive contracts, completion of due diligence, and regulatory approvals. If
that transaction is not completed, the Company intends to explore the
acquisition of other financial services companies.
The non-binding letter of intent was signed on June 18, 1999 and
contemplates the exchange of 500,000 shares of the Company's common stock for
all of the issued and outstanding shares of Somerset. The letter of intent
expressly conditions the consummation of the Company's acquisition of Somerset
upon several factors, principally (i) approval of the National Association of
Securities Dealers, Inc., which regulates the broker-dealer owned by Somerset
(ii) Company's raising of at least $5,000,000 in cash through a private
placement of between 1,000,000 and 2,000,000 shares of the Company's common
stock, (iii) agreement between the Company and certain key employees of Somerset
as to the terms and conditions of their future employment by the Company, (iv)
completion of the Company's due diligence inquiry into Somerset's business, (v)
this registration statement being effective, and (vi) negotiation and execution
of definitive agreements binding upon the parties and resolving the remaining
issues not yet agreed upon. The letter of intent will terminate if the Somerset
acquisition is not consummated within 180 days of its effective date.
The Company anticipates that additional capital of $5,000,000 will
be necessary to acquire Somerset and for operations during the twelve months
following acquisition. The Company plans to raise the necessary capital through
a private placement of common stock. Currently, the Company has approximately
$20,400 in cash to be applied toward its legal, accounting and other short-term
expenses associated with filing this registration statement and the related
reports. The Company is currently negotiating for a private unsecured loan of
additional funds for short-term operating purposes. However, no commitment for
such funds has been received as of the date hereof. No contingency plans have
been developed in the event that the Company is unable to obtain a short-term
loan, to raise the $5,000,000 necessary for the Somerset transaction and
operations, or to complete the Somerset transaction. The Company continues to
explore other opportunities with other financial services companies, should the
Somerset transaction not be completed.
The Company has no specific plans regarding sales of plant or
significant equipment, or for significant changes in the number of employees.
ITEM 3. DESCRIPTION OF PROPERTY
Registrant has no material assets except for cash in the amount of
$20,400. Registrant has no office facilities or real property holdings except
that Registrant currently rents office space in Vancouver, British Columbia on a
month-to-month basis at a monthly rental of $2,000 Canadian.
ITEM 4. SECURITY OWNERSHIP OF BENEFICIAL OWNERS
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The Company has
not been registered under the Securities Exchange Act of 1934. Accordingly, its
shareholders have not been required to file reports of beneficial ownership and
the Company does not know whether there are any persons who beneficially own
five percent or more of its outstanding common stock. The following table
provides information regarding record owners of at least five percent of the
outstanding common stock of the Company:
<TABLE>
<CAPTION>
Number of Shares Owned
Title of Class Name and Address as of July 1, 1999 % of Class
- -------------- ---------------- ------------------ ----------
<S> <C> <C> <C>
Common Cede & Co. 140,728 6.54
Box 20
Bowling Green Station
New York, NY 10274
Common Affaires Financiales S.A. 200,000 9.30
c/o Eugen Curti
Seestrasse 5 CH-8002
Zurich, Switzerland
</TABLE>
3
<PAGE> 4
No options, warrants, or conversion rights exist which would provide
any persons with beneficial ownership of the Company.
(b) The Company's sole director and officer does not own any shares
of the Company's common stock.
(c) No arrangements presently exist which would result in a change
in control of the Company.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
(a) The current sole director and officer of Registrant, who will
serve until the Registrant's next annual meeting, or until his successors are
elected or appointed and qualified, is as follows:
<TABLE>
<CAPTION>
Name Age Yr. Elected Office Held
- ---- --- ----------- -----------
<S> <C> <C> <C>
G.W. Norman Wareham 46 1999 President, Treasurer,
and Secretary
</TABLE>
G.W. Norman Wareham - Mr. Wareham was appointed the sole director of the Company
on March 26, 1999. Several shareholders who invested in the Company at or about
the time of his appointment knew of his service as an officer and/or director of
other early stage companies and informally expressed their approval of Mr.
Wareham to the Company's then sole director. He was appointed by the Company's
prior sole director in accordance with procedures set forth in the by-laws. Mr.
Wareham has served, or is currently serving, on the board of directors or as an
officer for several companies including ZMAX Corporation, Aquaplan, British
Brasses, Solar Energy, Viper Resources and WattMonitor. Mr. Wareham has been the
president of Wareham Management Ltd. since May 1996. Mr. Wareham has been a
director of two Canadian public companies, Anthian Resources and Orko Gold. From
June 1995 to January 1996, Mr. Wareham was an accountant with the certified
general accounting firm of Wanzel, Sigmund & Overes. From April 1993 to February
1995, Mr. Wareham served as President and Chief Executive Officer of
Transatlantic Financial, a private investment banking company. From August 1986
to March 1993, Mr. Wareham was a proprietor of Wareham & Company, providing
accounting and management consulting services.
(b) Registrant has no other officers or employees.
(c) Given that Registrant has only one director and officer, no
family relationships between such positions exists.
(d) No legal proceedings have been instituted in the previous five
years against the sole director and officer of Registrant, Mr. G.W. Norman
Wareham. Registrant has no knowledge of any legal proceedings against any
predecessor director, officer, or promoter of Registrant.
ITEM 6. EXECUTIVE COMPENSATION
(a) GENERAL. The sole officer and director of Registrant is paid
based upon the fair market value of the services he provides to the Company, as
authorized by its board of directors. No regular salary, bonus, stock option
plan, stock appreciation rights, stock incentive plan, or other compensation or
perquisites have been implemented by Registrant. Amounts paid to the officers
and directors are further detailed in subsection (b) below.
4
<PAGE> 5
(b) SUMMARY COMPENSATION TABLE. The following table sets forth
certain summary information concerning the compensation paid to the President
and certain former directors for the fiscal year ended February 28, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Principal Position* Fiscal Salary* Bonus* Other Compensation*
------------------------------- ------ ------ ----- ------------------
Year Paid*
---------
<S> <C> <C> <C> <C>
G.W. Norman Wareham, President and Sole Director 1999 0 0 0
1998 0 0 0
</TABLE>
* Footnote:
In addition, former officers and directors were paid management fee as
follows:
<TABLE>
<CAPTION>
FISCSAL
NAME AND PRINCIPAL POSITION YEAR PAID SALARY BONUS OTHER COMPENSATION
--------------------------- --------- ------ ----- ------------------
<S> <C> <C> <C> <C>
Tim Coupland, Former President and Director 1999 0 0 $79,525*
1998 0 0 0
Troy Adams, Former Director 1999 0 0 $4,930*
1998 0 0 0
Rick Clemens, Former Director 1999 0 0 $5,016*
1998 0 0 0
</TABLE>
The services provided to the Company by Mr. Coupland, a trained geologist,
included locating mining properties for possible acquisition by the Company,
working with consulting geologists to evaluate such properties, verification of
title and good standing of mining claims, negotiating with property owners for
acquisition of mining rights, preparing acquisition documents for mining
properties; overseeing private placements to finance the Company, including
preparing offering memoranda, subscription documents and administrative filings
and stock issuances in conjunction with Company counsel; investor relations; and
day-to-day operations and bookkeeping for the Company. In 1999 the Company also
paid $4762 to Mr. Coupland and $1317 to Mr. Adams to reimburse them for office
and travel expenses. In February 1999, owners of approximately 66% of the
shares of the Company's outstanding common stock, sold that stock. The
purchasers of that stock required removal of the board of directors and Messrs.
Coupland, Adams and Clemens were replaced.
(c) OPTION/SAR GRANTS. Registrant has not granted any options or
stock appreciation rights during the last fiscal year.
(d) AGGREGATE OPTION/SAR EXERCISES. No stock options or stock
appreciation rights have been exercised in the last fiscal year.
(e) LONG TERM INCENTIVE PLAN AWARDS. No long term incentive plans
have been awarded by Registrant.
(f) COMPENSATION OF DIRECTORS. Registrant's directors are
compensated based upon the fair market value of the services provided by such
director to the Company, as approved by the board of directors from time to
time. All compensation paid to the directors during the last fiscal year is
detailed in subsection (b) above.
(g) EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT. No
employment contract has been entered between Registrant and its president and
sole director, Mr. G.W. Norman Wareham. No compensation plan or arrangement
exists which provide for compensation in the event of a termination or
resignation of the Registrant's president.
(h) REPORT ON REPRICING OF OPTIONS/SARs. No options or stock
appreciation rights have been granted by Registrant.
5
<PAGE> 6
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 26, 1999, the Company entered into an Assignment and
Assumption Agreement ("Assignment Agreement") with Mr. Tim Coupland. Mr.
Coupland had served as a promoter of the Company, and at the time of the
Assignment Agreement, was the president and a director of the Company. Pursuant
to the Assignment Agreement, all of the assets of the Company, consisting
primarily of mining claims in two mining properties, which Registrant had
determined that it could not develop economically and could not afford to
maintain, were assigned to Mr. Coupland. Mr. Coupland assumed all of the
Company's liabilities and obligations as of January 31, 1999. At the time the
Company was not aware of any actual liabilities. However, the Assignment
Agreement was designed to protect the Company against the assertion of
unanticipated claims of a type which can arise in connection with the ownership
of mining claims. The Assignment Agreement, and the transaction to which it
referred, were ratified and approved by the written consent of a majority of the
shareholders of the Company.
The promoters of the Company were Mr. Tim Coupland and Mr. Andrew
Hromyk who provided services to the Company in exchange for shares of the
Company's stock.
ITEM 8. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Registrant, its
director, or its officer are a party. Registrant has no knowledge of any pending
legal proceedings to which parties owning 5% of its common stock are a party.
Registrant does not know of any legal proceedings contemplated or threatened by
or against it.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Until July 31, 1999, the Company's common stock was quoted on the
OTC Bulletin Board under the symbol, "BLLE". Since August 1, 1999, the Company's
common stock has been quoted on the "Pink Sheets." The approximate number of
holders of the Company's common stock as of September 1, 1999 is 52. The
approximate number of shares of the Company's common stock outstanding is
2,150,422.
The following table sets forth for the periods indicated the high
and low bid prices for the common stock as reported each quarterly period within
the last two fiscal years on the OTC Bulletin Board and the Pink Sheets. The
prices are inter-dealer prices, do not include retail mark up, mark down or
commission and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
FISCAL QUARTER HIGH LOW
- -------------- ---- ---
<S> <C> <C>
2/24/99**-2/28/99............................................................ 6 1/4 3 1/8
3/1/99-5/30/99............................................................... 7 1/4
6/01/99-8/30/99.............................................................. 9 9/16 4
</TABLE>
**The Company's stock was first quoted on February 24, 1999.
During the last two years, no dividends have been paid on the
Company's stock and the Company does not anticipate paying any cash dividends in
the foreseeable future. Although it is the Company's intention to utilize all
available funds for the development of the Company's business, no restrictions
are in place which would limit or restrict the ability of the Company to pay
dividends.
6
<PAGE> 7
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
(a) Registrant has made the following sales of unregistered common
stock since its organization on December 18, 1997. All denominations are in U.S.
Dollars unless otherwise noted. The symbol "CDN" denotes Canadian Dollars.
<TABLE>
<CAPTION>
Date
Of Issue Title Purchaser Shares Sold Consideration Currency Exemption
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/12/98 Common Bona Vista West Ltd 60,000* $300 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/5/98 Common Innovin, Inc. shareholders 43,511* Shares of Regulation D
pursuant to Articles Innovin, Inc.
of Merger
- ---------------------------------------------------------------------------------------------------------------------------------
Mining property located in Regulation D
3/10/98 Common Bert Lavallee 12,000* British Columbia, Canada
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common Natalie Thibeault 400* $5,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common Chris Wesolowski 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common John Ferrier 2,100* $26,250 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common Corrine Johnson 400* $5,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common James Drangsbolt 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common Mae Chow 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common Wail Ichtay 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common Ryan Belchamber 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/1/98 Common Vance Belchamber 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
10/28/98 Common Troy Adams 1,400* $17,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/1/98 Common Koos Dykstra 1,000* $12,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/1/98 Common Chris Wesolowski 624* $7,800 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/1/98 Common Sue Adams 2,700* $33,750 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
Mining property located in Regulation D
11/24/98 Common David Javorsky 16,000* British Columbia, Canada
- ---------------------------------------------------------------------------------------------------------------------------------
12/1/98 Common Michael Gaber 800* $10,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/21/98 Common Joe Vass 800* $10,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/21/98 Common Mike Belchamber 800* $10,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/21/98 Common Ryan Belchamber 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/21/98 Common Vance Belchamber 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
Landuction Consulting Ltd/Chet
12/21/98 Common Gilmore 200* $2,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/21/98 Common Bud Patriquin 240* $3,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/21/98 Common David Novy 600* $7,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/30/98 Common David Boychuk 400* $5,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12/30/98 Common John Martin 400* $5,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
12/30/98 Common Tamiko Foreman 800* $10,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/15/98 Common Gordon Jangula 500* $6,250 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/15/98 Common Jeremy T. Brennan 500* $6,250 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/15/98 Common Tamiko Foreman 800* $10,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/15/98 Common Douglas Coupland 400* $5,000 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/15/98 Common Ted Gaulton 1,000* $12,500 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
11/15/98 Common John Vallier 500* $6,250 CDN Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/25/99 Common Century Capital 784,009** Assignment of Century
Management Ltd Capital's License in the Regulation D
"Bullet" waste treatment
technology
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Affaires Financiers 200,000 $10,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Holger Timm 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Cesare Bette 50,000 $2,500 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Patrick Ramelet 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Euroswiss Securities 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Harpings Management 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Rahn & Bodmer 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Value Invest Ltd. 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Lilydale Finance Inc. 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Noble Trading Ltd. 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Ecorum Limited 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Fegu Finance Inc. 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Jean T. Nasraliah 50,000 $2,500 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Alia Holdings 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Cayman Island Securities 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Adana Finance Ltd. 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Arendal Investments 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Haliun Hongorzul 50,000 $2,500 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common MFC Merchant Bank 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common Signature Financial 50,000 $2,500 Regulation D
Corporation
- ---------------------------------------------------------------------------------------------------------------------------------
3/26/99 Common First Capital Invest Corp. 100,000 $5,000 Regulation D
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Adjusted for 50:1 reverse stock split which occurred on March 15, 1999.
** These shares were subsequently returned to Registrant upon cancellation of
the license for the "Bullet" technology.
All of the above issuances were made in accordance with the
exemptions provided by Rule 504 of Regulation D under the Securities Act of
1933. Specifically, the aggregate offering price of securities offered under
Rule 504 did not exceed $1,000,000 within any twelve-month period. The Company
filed a Form D for each of the above detailed issuances in accordance with
Regulation D.
8
<PAGE> 9
ITEM 11. DESCRIPTION OF SECURITIES
Registrant is authorized by its Certificate of Incorporation to
issue 30,000,000 shares of common stock, par value $0.0001 per share.
All shares of stock, when issued, are to be fully paid and
non-assessable. Each share of Registrant's common stock is entitled to one vote
at any shareholders meeting or other authorized vote of the shareholders. All
shares of Registrant's common stock are equal to one another with respect to
dividends and liquidation rights. Holders of Registrant's common stock are
entitled to receive such dividend amount or amounts as may be declared by the
Board of Directors out of funds legally available for dividends, and upon
liquidation, are entitled to participate pro-rata in a distribution of assets
available for such distribution to shareholders. There are no conversion,
pre-emptive, option, or subscription privileges with respect to any shares.
Registrant's common stock does not have cumulative voting rights which means
that the holder of more than 50% of the shares voting for the election of
directors may elect all of the directors if they choose to do so.
Reference is made to the Certificate of Incorporation, as amended,
and the By-Laws of the Company as well as to the applicable statutes of the
State of Delaware for additional details on the rights, privileges, and
liabilities of holders of the Company's stock.
ITEM 12. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Certificate of Incorporation limits the directors'
liability to the Company, its stockholders, or other security holders of the
Company for monetary damages resulting from any breach of fiduciary duty. This
limitation of liability applies for all breaches of fiduciary duty unless such
breach was due to a breach of the duty of the director's loyalty, acts or
omissions not in good faith, certain acts specified by Delaware law, or a
transaction for the director's personal benefit.
The Certificate of Incorporation also provides for the
indemnification of the directors and officers of the Company. Officers and
directors of the Company are indemnified pursuant to the Certificate of
Incorporation against personal liability resulting from any tort committed by an
employee of the Company, unless the officer or director was personally involved
in the injury, or unless such officer or director committed a criminal act. The
Certificate of Incorporation further empowers the Company to indemnify its
officers and directors to the fullest extent provided by law.
Section 145 of the Delaware General Corporation Law allows Delaware
corporations to indemnify their officers, directors, employees and agents and
may effect the Registrant's officers and directors liability.
ITEM 13. FINANCIAL STATEMENTS
Registrant's financial statements, as indexed in Item 15 below, are
attached to this registration statement and incorporated herein by reference.
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<PAGE> 10
ITEM 14. CHANGES IN ACCOUNTING AND FINANCIAL DISCLOSURE
Registrant did not have any disagreements on accounting or financial
disclosures with its principal independent accountant during the previous two
years.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
The following documents are attached hereto and incorporated herein
by reference.
A. FINANCIAL STATEMENTS
F-1 Audited Financial Statements as of February
28, 1999, including audited balance sheet,
and audited statements of income, cash flows,
and changes in stockholders' equity.
F-2 Unaudited Financial Statements as of May 31,
1999, including unaudited balance sheet, and
related statements of income and cash flows.
B. EXHIBITS
3(i)(a) Certificate of Incorporation of Registrant.
(b) Amendment to Certificate of Incorporation
dated February 20, 1998.
(c) Certificate of Amendment of Certificate of
Incorporation dated March 15, 1998.
3(ii) Bylaws of Registrant.
[Signature page follows.]
10
<PAGE> 11
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.,
A Delaware Corporation
Date September 14, 1999 By : /s/
------------------- --------------------
G.W. Norman Wareham,
President
11
<PAGE> 12
ANGLO-SIERRA RESOURCES CORP.
(AN EXPLORATION STAGE COMPANY)
FINANCIAL STATEMENTS
(EXPRESSED IN UNITED STATES DOLLARS)
FEBRUARY 28, 1999
<PAGE> 13
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of
Anglo-Sierra Resources Corp.
(An Exploration Stage Company)
We have audited the accompanying balance sheets of Anglo-Sierra Resources Corp.
as at February 28, 1999 and 1998 and the related statements of operations,
stockholders' equity and cash flows for the year ended February 28, 1999, the
period from incorporation on December 18, 1997 to February 28, 1998 and
cumulative amounts for the period from December 18, 1997 to February 28, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
the significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at February 28, 1999 and 1998
and the results of its operations and its cash flows for the year ended February
28, 1999, the period from incorporation on December 18, 1997 to February 28,
1998 and cumulative amounts for the period from December 18, 1997 to February
28, 1999 in conformity with generally accepted accounting principles in the
United States of America.
The accompanying financial statements have been prepared assuming that
Anglo-Sierra Resources Corp. will continue as a going concern. As discussed in
Note 2 to the financial statements, unless the Company attains further
profitable operations and/or obtains additional financing, there is substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regards to these matters are discussed in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
"DAVIDSON & COMPANY"
Vancouver, Canada Chartered Accountants
March 30, 1999
(except as to Note 3 which is
as of September 2, 1999)
A Member of Accounting Group International
Suite 1200, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372
Pacific Centre, Vancouver, BC, Canada
V7Y1G6
Telephone (604) 687-0947 Fax (604) 687-6172
<PAGE> 14
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
AS AT FEBRUARY 28
<TABLE>
<CAPTION>
==============================================================================================================================
1999 1998
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 327 $ -
INCORPORATION COSTS (Note 5) - 5,089
INVESTMENT - 175
-------------------- -------------------
$ 327 $ 5,264
==============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 1,986 $ 1,405
-------------------- -------------------
STOCKHOLDERS' EQUITY
Capital stock (Note 7)
Authorized
30,000,000 common shares, par value of $0.0001
5,000,000 preference shares, par value of $0.0001
Issued
150,475 common shares (1998 - 103,511 common shares) 15 10
Additional paid-in capital 311,284 5,475
Deficit accumulated during the exploration stage (316,562) (1,626)
Accumulative comprehensive other income 3,604 -
-------------------- -------------------
(1,659) 3,859
-------------------- -------------------
$ 327 $ 5,264
==============================================================================================================================
</TABLE>
HISTORY AND ORGANIZATION OF THE COMPANY (Note 1)
SUBSEQUENT EVENTS (Note 12)
ON BEHALF OF THE BOARD:
/s/ Director
- --------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
===============================================================================================================================
Cumulative
From
Incorporation Period From
on Incorporation
December 18, on December
1997 to Year Ended 18, 1997 to
February 28, February 28, February 28,
1999 1999 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EXPENSES
Amortization of incorporation costs $ 5,310 $ 5,089 $ 221
Bank charges 146 146 -
Consulting fees 14,616 14,616 -
Foreign exchange loss 344 344 -
Management fees 84,455 84,455 -
Office and miscellaneous 12,346 12,346 -
Printing 2,424 2,424 -
Professional fees 18,948 17,543 1,405
Transfer agent and registrar 11,021 11,021 -
Travel 5,930 5,930 -
Write-off of resource properties (Note 6) 160,847 160,847 -
--------------------- --------------------- ------------------
LOSS BEFORE OTHER ITEM (316,387) (314,761) (1,626)
OTHER ITEM
Write-off of investment (175) (175) -
--------------------- --------------------- ------------------
LOSS FOR THE PERIOD $ (316,562) $ (314,936) $ (1,626)
===============================================================================================================================
LOSS PER SHARE $ (2.52) $ (0.02)
WEIGHTED AVERAGE SHARES OUTSTANDING 125,073 82,531
===============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 16
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
==========================================================================================================================
Deficit
Accumulated
Number of Additional During the Cumulative
Common Paid-in Exploration Translation
Shares Amount Capital Stage Adjustment Total
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCEPTION, DECEMBER 18, 1997 - $ - $ - $ - $ - $ -
Shares issued for cash 60,002 6 5,304 - - 5,310
Share exchange with Innovin
Inc. (Note 4) 43,509 4 171 - - 175
Loss for the period - - - (1,626) - (1,626)
----------- ------------ ------------- -------------- ----------- --------------
BALANCE AT FEBRUARY 28, 1998 103,511 10 5,475 (1,626) - 3,859
Shares issued for resource
properties (Note 6) 28,000 3 151,179 - - 151,182
Shares issued for cash 18,964 2 154,630 - - 154,632
Loss for the period - - - (314,936) - (314,936)
Accumulative comprehensive
other income - - - - 3,604 3,604
----------- ------------ ------------- ------------- ----------- --------------
BALANCE AT FEBRUARY 28, 1999 150,475 $ 15 $ 311,284 $ (316,562) $ 3,604 $ (1,659)
==========================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 17
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
===============================================================================================================
Cumulative
From
Incorporation Period From
on Incorporation
December 18, on December
1997 to Year Ended 18, 1997 to
February 28, February 28, February 28,
1999 1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LOSS FOR THE PERIOD $ (316,562) $ (314,936) $ (1,626)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments 3,604 3,604 -
---------------- --------------- ---------------
COMPREHENSIVE LOSS FOR THE PERIOD $ (312,958) $ (311,332) $ (1,626)
===============================================================================================================
LOSS PER SHARE $ (2.49) $ (0.02)
WEIGHTED AVERAGE SHARES OUTSTANDING 125,073 82,531
===============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 18
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
=========================================================================================================================
Cumulative
From
Incorporation Period From
on Incorporation
December 18, on December
1997 to Year Ended 18, 1997 to
February 28, February 28, February 28,
1999 1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (316,562) $ (314,936) $ (1,626)
Adjustments to reconcile loss to net cash
used in operating activities:
Amortization of incorporation costs 5,310 5,089 221
Write-off of resource properties 160,847 160,847 -
Write-off of investment 175 175 -
Changes in other operating assets and liabilities
Increase in accounts payable and accrued liabilities 1,986 581 1,405
--------------- -------------- ---------------
Net cash used in operating activities (148,244) (148,244) -
--------------- -------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures on incorporation costs (5,310) - (5,310)
Acquisition of resource property (9,665) (9,665) -
--------------- -------------- ---------------
Net cash used in investing activities (14,975) (9,665) (5,310)
--------------- -------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITY
Issuance of capital stock for cash 159,942 154,632 5,310
--------------- -------------- ---------------
CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD (3,277) (3,277) -
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 3,604 3,604 -
--------------- -------------- ---------------
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 327 327 -
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - - -
--------------- -------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 327 $ 327 $ -
=========================================================================================================================
CASH PAID DURING THE YEAR FOR:
Interest expense $ - $ - $ -
Income taxes - - -
=========================================================================================================================
</TABLE>
SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING AND INVESTING
ACTIVITIES (Note 9)
The accompanying notes are an integral part of these financial statements.
<PAGE> 19
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 28, 1999
================================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated in Delaware on December 18, 1997 and is in the
exploration stage. On March 5, 1998, the Company changed its name from
Innovin Development Corporation to Anglo-Sierra Resources Corp.
2. GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the company has no current source
of revenue. Without realization of additional capital, it would be unlikely
for the Company to continue as a going concern. It is management's plan to
seek additional capital through a private placement.
<TABLE>
<CAPTION>
===============================================================================
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Deficit accumulated during the exploration stage $ (316,562) $ (1,626)
Working capital deficiency (1,659) (1,405)
===============================================================================
</TABLE>
3. SIGNIFICANT ACCOUNTING POLICIES
INCORPORATION COSTS
Incorporation costs are carried at cost less accumulated amortization which
is being calculated over sixty months on a straight-line basis. During the
current year, the Company charged to operations the remaining unamortized
incorporation costs (Note 5).
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with original
maturities of three months or less. These are recorded at cost which
approximates market.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents,
accounts payable and accrued liabilities. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant
interest, currency or credit risks arising from these financial
instruments. The fair value of these financial instruments approximate
their carrying values, unless otherwise noted.
<PAGE> 20
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 28, 1999
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
FOREIGN CURRENCY TRANSLATION
The Company has determined that the functional currency of its operations
is the local currency, the Canadian dollar. In accordance with Statement of
Financial Accounting Standards No. 52 ("SFAS 52"), "Foreign Currency
Translation", the assets and liabilities denominated in foreign currency
are translated into U.S. dollars at the year-end exchange rates. Revenue
and expenses are translated at the rates of exchange prevailing on the
dates such items are recognized in earnings. Related exchange gains and
losses are included in a separate component of shareholders' equity under
cumulative translation adjustment. Exchange gains and losses resulting from
foreign currency transactions are included in income for the year.
STOCK BASED COMPENSATION
FASB Statement No. 123, "Accounting for Stock-Based Compensation",
encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has
chosen to account for stock-based compensation using Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Accordingly, compensation cost for stock options is measured as the excess,
if any, of the quoted market price of the Company's stock at the date of
the grant over the amount an employee is required to pay for the stock.
NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133") which establishes
accounting and reporting standards for derivative instruments and for
hedging activities. SFAS 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. The Company does not anticipate that
the adoption of the statement will have a significant impact on its
financial statements.
ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO
BE DISPOSED OF
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of". In the event that facts and
circumstances indicate that the carrying amount of an asset may not be
recoverable and an estimate of future undiscounted cash flows is less than
the carrying amount of the asset, an impairment loss will be recognized.
RESOURCE PROPERTIES
Exploration costs are charged to expense as incurred. After a project is
determined by management to be commercially feasible, such costs are
capitalized. Expenditures for mine development are capitalized until
production reaches a commercial level. Prior to achieving commercial
production, revenues relating to development ore, net of mining and
processing costs associated with its production, are applied to mine
development costs. Mine development costs incurred to access reserves on
producing mines are also capitalized.
Mining projects and properties are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of these
assets may not be recoverable. Events or circumstances that may indicate
that the carrying amount may not be recoverable include a significant
decrease in current or forward commodity prices, a significant reduction in
estimates of proven and probable reserves, and significant increases in
operating costs, capital requirements or reclamation costs. If estimated
future cash flows expected to result from the use of the mining project or
property and its eventual disposition are less than the carrying amount of
the mining project or property, an impairment is recognized based upon the
estimated fair value of the mining project or property. Fair value
generally is based on the present value of estimated future net cash flows
for each mining project or property, considering estimates of proven and
probable mineable reserves, future prices, operating costs, capital
requirements and reclamation costs.
<PAGE> 21
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 28, 1999
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary differences
between financial and tax reporting and net operating loss carryforwards.
Deferred tax expenses (benefit) result from the net change during the year
of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all
of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130 "Reporting Comprehensive Income". SFAS No. 130 establishes
standards for the reporting and display of comprehensive income and its
components (revenue, expenses, gains and losses). The purpose of reporting
comprehensive income is to present a measure of all changes in
stockholders' equity that result from recognized transactions and other
economic events of the year, other than transactions with owners in their
capacity as owners.
REPORTING ON COSTS OF START-UP ACTIVITIES
In April 1998, the American Institute of Certified Public Accountant's
issued Statement of Position 98-5 "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") which provides guidance on the financial reporting
of start-up costs and organization costs. It requires costs of start-up
activities and organization costs to be expensed as incurred. SOP 98-5 is
effective for fiscal years beginning after December 15, 1998 with initial
adoption reported as the cumulative effect of a change in accounting
principle. The Company does not anticipate that the statement will have a
significant impact on its future financial statements.
LOSS PER SHARE
Loss per share is computed based on the weighted average number of common
shares and common stock equivalents outstanding during each period, unless
the common stock equivalents are anti-dilutive.
4. SHARE EXCHANGE
On January 9, 1998, the Company merged with Innovin Inc. ("Innovin") by
issuing 43,509 common shares of the Company (after taking account for the
subsequent reverse-stock-split) for all of the 2,175,456 issued and
outstanding common shares of Innovin. Innovin held as its principal asset
175,456 Series K common shares of STB Corp. Innovin acquired the shares of
STB Corp. by exchanging 175,456 of its own common shares for the Series K
common shares of STB Corp. Innovin ceased to exist on January 9, 1998.
<PAGE> 22
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 28, 1999
================================================================================
4. SHARE EXCHANGE (cont'd.....)
For accounting purposes, the share exchange is accounted for as a pooling
of interests by combining the net book values of the assets, liabilities
and shareholders' equity of the involved companies. The Share Exchange does
not result in a revaluation of the net assets and liabilities of the
involved companies since there is no overall change in control of the
companies involved.
These financial statements are based on the assumption that the companies
were combined for the period since incorporation of the Company on December
18, 1997 to February 28, 1999.
Summarized results of operations of the separate companies for the period
from December 18, 1997 through January 9, 1998, the date of acquisition,
are as follows:
<TABLE>
<CAPTION>
==========================================================================
Anglo-Sierra
Resources
Corp. Innovin Inc.
--------------------------------------------------------------------------
<S> <C> <C>
Net sales $ - $ -
Net loss for the period - -
==========================================================================
</TABLE>
The summarized assets and liabilities of the separate companies on January
9, 1998, the date of acquisition, were as follows:
<TABLE>
<CAPTION>
===========================================================
Anglo-Sierra
Resources
Corp. Innovin Inc.
-----------------------------------------------------------
<S> <C> <C>
Incorporation costs $ 2,545 $ 2,544
Investment - 175
Current liabilities - -
===========================================================
</TABLE>
5. INCORPORATION COSTS
<TABLE>
<CAPTION>
======================================================================
1999 1998
----------------------------------------------------------------------
<S> <C> <C>
Incorporation costs $ 5,310 $ 5,310
Less: accumulated amortization (5,310) (221)
------------- ------------
$ - $ 5,089
======================================================================
</TABLE>
During the year ended February 28, 1999, management of the Company
determined that incorporation costs provided no future economic benefits
and all unamortized incorporation costs were charged to operations.
<PAGE> 23
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 28, 1999
================================================================================
6. RESOURCE PROPERTIES
<TABLE>
<CAPTION>
======================================================================================
1999 1998
--------------------------------------------------------------------------------------
<S> <C> <C>
Gray Copper Property, British Columbia $ 21,182 $ -
North Trout Creek Property, British Columbia 139,665 -
--------------- ----------------
160,847 -
Write-off of resource properties (160,847) -
--------------- ----------------
$ - $ -
======================================================================================
</TABLE>
GRAY COPPER PROPERTY, BRITISH COLUMBIA
The Company held a 100% interest in the mining rights to the Gray Copper
Property located in the Skeena Mining Division, British Columbia. The
Company acquired the Gray Copper Property mining rights by issuing 12,000
common shares valued at $21,182. During the year ended February 28, 1999,
management of the Company determined that it would not proceed further with
the development of mining operations on this property, and all costs of
acquisition were written-off to operations. The mining rights have
subsequently been transferred to a former director for $Nil consideration.
NORTH TROUT CREEK PROPERTY, BRITISH COLUMBIA
The Company held a 100% interest in certain mining claims located in the
Similkameen Mining Division, British Columbia. The Company acquired the
mining rights to the North Trout Creek Property by paying $9,665 and
issuing 16,000 common shares valued at $130,000. During the year ended
February 28, 1999, management of the Company determined that it would not
proceed further with the development of mining operations on this property,
and all costs of acquisition were written-off to operations. The mining
rights have subsequently been transferred to a former director for $Nil
consideration.
7. CAPITAL STOCK
ADDITIONAL PAID-IN CAPITAL
The excess of proceeds received for common shares over their par value of
$0.0001, less share issue costs, is credited to additional paid-in capital.
REVERSE STOCK SPLIT
Subsequent to February 28, 1999, the Company implemented a 50:1 reverse
stock split (Note 12 (b)). Stockholders' equity has been restated to give
retroactive recognition of the reverse stock split for all periods
presented by reclassifying from common shares to additional paid-in capital
the par value of converted shares arising from the split. In addition, all
references to number of shares and per share amounts of common shares have
been restated to reflect the reverse stock split.
<PAGE> 24
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 28, 1999
================================================================================
8. RELATED PARTY TRANSACTIONS
During the year ended February 28, 1999, the Company entered into the
following transactions with related parties:
a) Paid or accrued management fees of $79,525 (1998 - $Nil) to a former
director or a company controlled by the former director. As at
February 28, 1999, $328 of management fees are due to a former
director.
b) Paid management fees of $4,930 (1998 - $Nil) to a former director.
c) Paid consulting fees of $5,016 (1998 - $Nil) to a former director.
d) Paid $4,762 (1998 - $Nil) for office and travel expenses to a former
director or a company controlled by the former director.
e) Paid $1,317 (1998 - $Nil) for office and travel expenses to a former
director.
9. SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING AND INVESTING
ACTIVITIES
Significant non-cash transactions for the year ended February 28, 1999
included:
a) The Company issuing 12,000 common shares in the amount of $21,182 as
consideration for the acquisition of the Gray Copper Property (Note
6).
b) The Company issuing 16,000 common shares in the amount of $130,000 as
part consideration for the acquisition of the North Trout Creek
Property (Note 6).
The significant non-cash transaction for the period ended February 28, 1998
consisted of the Company issuing 43,509 common shares in the amount of $175
as consideration on the Share Exchange (Note 4).
10. INCOME TAXES
The Company's total deferred tax asset at February 28 is as follows:
<TABLE>
<CAPTION>
===============================================================================================
1999 1998
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Tax benefit of net operating loss carryforward $ 46,340 $ 244
Valuation allowance (46,340) (244)
------------------ ------------------
$ - $ -
===============================================================================================
</TABLE>
The Company has a net operating loss carryforward of approximately $316,562
(1998 - $1,626). The valuation allowance increased to $46,340 from $244
during the period ended February 28, 1999 since the realization of the
operating loss carryforwards are doubtful. It is reasonably possible that
the Company's estimate of valuation allowance will change.
The operating loss carryforwards expire as follows:
<TABLE>
<S> <C>
2005 $ 1,626
2006 314,936
----------
$ 316,562
==========
</TABLE>
<PAGE> 25
ANGLO-SIERRA RESOURCES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 28, 1999
================================================================================
11. COMPREHENSIVE INCOME
Total comprehensive loss for the year ended February 28, 1999, and the
period from incorporation on December 18, 1997 to February 28, 1998 was
$(311,332) and $(1,626), respectively. The only item included in other
comprehensive income is foreign currency translation adjustments in the
amounts of $3,604 for the year ended February 28, 1999 and $Nil for the
period from incorporation on December 18, 1997 to February 28, 1999.
<TABLE>
<CAPTION>
=================================================================================
Foreign
Currency Accumulated
Translation Comprehensive
Adjustment Income
---------------------------------------------------------------------------------
<S> <C> <C>
Beginning balance, February 28, 1998 $ - $ -
Current - period change 3,604 3,604
----------------- -----------------
Ending balance, February 28, 1999 $ 3,604 $ 3,604
=================================================================================
</TABLE>
12. SUBSEQUENT EVENTS
The following transactions occurred subsequent to year end:
a) The Company changed its name on March 15, 1999, from Anglo-Sierra
Resources Corp. to Bullet Environmental Technologies, Inc.
b) Effective March 15, 1999, the Company implemented a 50:1 reverse stock
split where each issued and outstanding share of the Company's common
stock was converted to 0.02 shares of the Company's common stock.
c) Pursuant to a private share offering on March 26, 1999, the Company
issued 2,000,000 common shares at a price of $0.05 per common share
for total proceeds of $100,000.
13. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four digits to identify a year. Date-sensitive systems may
incorrectly recognize the Year 2000 as some other date, resulting in
errors. The effects of the Year 2000 Issue may be experienced before, on or
after January 1, 2000 and, if not addressed, the impact on operations and
financial reporting may range from minor errors to significant systems
failure which could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the Year
2000 Issue affecting the Company, including those related to the efforts of
customers, suppliers or other third parties, will be fully resolved.
<PAGE> 26
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(FORMERLY ANGLO-SIERRA RESOURCES CORP.)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(EXPRESSED IN UNITED STATES DOLLARS)
(UNAUDITED - PREPARED BY MANAGEMENT)
MAY 31, 1999
<PAGE> 27
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
===============================================================================================================
May 31, (Audited)
1999 February 28,
1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 96,853 $ 327
Prepaid expenses 5,000 -
------------------- ------------------
$ 101,853 $ 327
===============================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 2,449 $ 1,986
------------------- ------------------
STOCKHOLDERS' EQUITY
Capital stock (Note 7)
Authorized
30,000,000 common shares, par value of $0.0001
5,000,000 preference shares, par value of $0.0001
Issued
2,150,475 common shares (February 28, 1999 - 150,475) 215 15
Additional paid-in capital 411,084 311,284
Deficit accumulated during the development stage (320,304) (316,562)
Accumulative comprehensive other income 8,409 3,604
------------------- ------------------
99,404 (1,659)
------------------- ------------------
$ 101,853 $ 327
===============================================================================================================
</TABLE>
HISTORY AND ORGANIZATION OF THE COMPANY (Note 1)
The accompanying notes are an integral part of these financial statements.
<PAGE> 28
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
=======================================================================================================================
Cumulative
From
Incorporation
on
December 18, Three Month Three Month
1997 to Period Ended Period Ended
May 31, May 31, May 31,
1999 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EXPENSES
Amortization of incorporation costs $ 5,310 $ - $ 266
Bank charges 163 17 24
Consulting fees 14,616 - -
Foreign exchange loss 344 - -
Management fees 84,455 - -
Office and miscellaneous 12,346 - -
Printing 2,424 - 2,424
Professional fees 19,698 750 -
Rent 1,437 1,437 -
Transfer agent and registrar 12,559 1,538 3,227
Travel 5,930 - -
Write-off of resource properties 160,847 - -
--------------------- --------------------- --------------------
LOSS BEFORE OTHER ITEM (320,129) (3,742) (5,941)
OTHER ITEM
Write-off of investment (175) - -
--------------------- --------------------- --------------------
LOSS FOR THE PERIOD $ (320,304) $ (3,742) $ (5,941)
=======================================================================================================================
LOSS PER SHARE $ (0.01) $ (0.05)
WEIGHTED AVERAGE SHARES OUTSTANDING 1,585,258 112,250
=======================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 29
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
=================================================================================================================================
Deficit
Accumulated
Number of Additional During the Cumulative
Common Paid-in Development Translation
Shares Amount Capital Stage Adjustment Total
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCEPTION, DECEMBER 18, 1997 - $ - $ - $ - $ - $ -
Shares issued for cash 60,002 6 5,304 - - 5,310
Share exchange with Innovin Inc. 43,509 4 171 - - 175
Loss for the period - - - (1,626) - (1,626)
----------- ------------- --------------- ------------- ------------- ------------
BALANCE AT FEBRUARY 28, 1998 103,511 10 5,475 (1,626) - 3,859
Shares issued for resource
properties 28,000 3 151,179 - - 151,182
Shares issued for cash 18,964 2 154,630 - - 154,632
Loss for the period - - - (314,936) - (314,936)
Accumulative comprehensive
other income - - - - 3,604 3,604
----------- ------------- --------------- ------------- ------------- ------------
BALANCE AT FEBRUARY 28, 1999 150,475 15 311,284 (316,562) 3,604 (1,659)
Shares issued for cash 2,000,000 200 99,800 - - 100,000
Loss for the period - - - (3,742) - (3,742)
Accumulative comprehensive
other income - - - - 4,805 4,805
----------- ------------- --------------- ------------- ------------- ------------
BALANCE AT MAY 31, 1999 2,150,475 $ 215 $ 411,084 $ (320,304) $ 8,409 $ 99,404
=================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 30
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
===========================================================================================================
Cumulative
From
Incorporation
on
December 18, Three Month Three Month
1997 to Period Ended Period Ended
May 31, May 31, May 31,
1999 1999 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LOSS FOR THE PERIOD $ (320,304) $ (3,742) $ (5,941)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments 8,409 4,805 -
--------------- ---------------- --------------
COMPREHENSIVE NET INCOME (LOSS) FOR THE PERIOD $ (311,895) $ 1,063 $ (5,941)
===========================================================================================================
NET INCOME (LOSS) PER SHARE $ 0.01 $ (0.05)
WEIGHTED AVERAGE SHARES OUTSTANDING 1,585,258 112,250
===========================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 31
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
=============================================================================================================================
Cumulative
From
Incorporation
on
December 18, Three Month Three Month
1997 to Period Ended Period Ended
May 31, May 31, May 31,
1999 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (320,304) $ (3,742) $ (5,941)
Adjustments to reconcile loss to net cash
used in operating activities:
Amortization of incorporation costs 5,310 - 266
Write-off of resource properties 160,847 - -
Write-off of investment 175 - -
Changes in other operating assets and liabilities
Increase in prepaid expenses (5,000) (5,000) -
Increase in accounts payable and accrued liabilities 2,449 463 5,651
--------------- -------------- -------------
Net cash used in operating activities (156,523) (8,279) (24)
-------------- -------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures on incorporation costs (5,310) - -
Acquisition of resource property (9,665) - -
-------------- -------------- -------------
Net cash used in investing activities (14,975) - -
-------------- -------------- -------------
CASH FLOWS FROM FINANCING ACTIVITY
Issuance of capital stock for cash 259,942 100,000 -
--------------- -------------- -------------
CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 88,444 91,721 (24)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 8,409 4,805 -
--------------- -------------- -------------
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 96,853 96,526 (24)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 327 -
--------------- -------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 96,853 $ 96,853 $ (24)
=============================================================================================================================
CASH PAID DURING THE YEAR FOR:
Interest expense $ - $ - $ -
Income taxes - - -
=============================================================================================================================
</TABLE>
SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING AND INVESTING
ACTIVITIES (Note 8)
The accompanying notes are an integral part of these financial statements.
<PAGE> 32
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
MAY 31, 1999
================================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated in Delaware on December 18, 1997 and is in the
development stage. On March 5, 1998, the Company changed its name from
Innovin Development Corporation to Anglo-Sierra Resources Corp. On March
15, 1999, the Company changed its name from Anglo-Sierra Resources Corp. to
Bullet Environmental Technologies, Inc.
In the opinion of management, the accompanying financial statements contain
all adjustments necessary (consisting only of normal recurring accruals) to
present fairly the financial information contained therein. These
statements do not include all disclosures required by generally accepted
accounting principles and should be read in conjunction with the audited
financial statements of the Company for the year ended February 28, 1999.
The results of operations for the three months ended May 31, 1999 are not
necessarily indicative of the results to be expected for the year ending
February 28, 2000.
2. GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the company has no current source
of revenue. Without realization of additional capital, it would be unlikely
for the Company to continue as a going concern. It is management's plan to
seek additional capital through a private placement.
<TABLE>
<CAPTION>
====================================================================================
1999 1998
------------------------------------------------------------------------------------
<S> <C> <C>
Deficit accumulated during the development stage $ (320,304) $ (7,567)
Working capital surplus (deficiency) 99,404 (7,080)
====================================================================================
</TABLE>
3. SIGNIFICANT ACCOUNTING POLICIES
INCORPORATION COSTS
Incorporation costs are carried at cost less accumulated amortization,
which is being calculated over sixty months on a straight-line basis.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with original
maturities of three months or less. These are recorded at cost which
approximates market.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE> 33
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
MAY 31, 1999
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents,
prepaid expenses, accounts payable and accrued liabilities. Unless
otherwise noted, it is management's opinion that the Company is not exposed
to significant interest, currency or credit risks arising from these
financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.
FOREIGN CURRENCY TRANSLATION
The Company has determined that the functional currency of its operations
is the local currency, the Canadian dollar. In accordance with Statement of
Financial Accounting Standards No. 52 ("SFAS 52"), "Foreign Currency
Translation", the assets and liabilities denominated in foreign currency
are translated into U.S. dollars at the year-end exchange rates. Revenue
and expenses are translated at the rates of exchange prevailing on the
dates such items are recognized in earnings. Related exchange gains and
losses are included in a separate component of shareholders' equity under
cumulative translation adjustment. Exchange gains and losses resulting from
foreign currency transactions are included in income for the year.
STOCK BASED COMPENSATION
FASB Statement No. 123, "Accounting for Stock-Based Compensation",
encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has
chosen to account for stock-based compensation using Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Accordingly, compensation cost for stock options is measured as the excess,
if any, of the quoted market price of the Company's stock at the date of
the grant over the amount an employee is required to pay for the stock.
NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133") which establishes
accounting and reporting standards for derivative instruments and for
hedging activities. SFAS 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. The Company does not anticipate that
the adoption of the statement will have a significant impact on its
financial statements.
ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO
BE DISPOSED OF
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of". In the event that facts and
circumstances indicate that the carrying amount of an asset may not be
recoverable and an estimate of future undiscounted cash flows is less than
the carrying amount of the asset, an impairment loss will be recognized.
<PAGE> 34
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
MAY 31, 1999
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
RESOURCE PROPERTIES
Exploration costs are charged to expense as incurred. After a project is
determined by management to be commercially feasible, such costs are
capitalized. Expenditures for mine development are capitalized until
production reaches a commercial level. Prior to achieving commercial
production, revenues relating to development ore, net of mining and
processing costs associated with its production, are applied to mine
development costs. Mine development costs incurred to access reserves on
producing mines are also capitalized.
Mining projects and properties are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of these
assets may not be recoverable. Events or circumstances that may indicate
that the carrying amount may not be recoverable include a significant
decrease in current or forward commodity prices, a significant reduction in
estimates of proven and probable reserves, and significant increases in
operating costs, capital requirements or reclamation costs. If estimated
future cash flows expected to result from the use of the mining project or
property and its eventual disposition are less than the carrying amount of
the mining project or property, an impairment is recognized based upon the
estimated fair value of the mining project or property. Fair value
generally is based on the present value of estimated future net cash flows
for each mining project or property, considering estimates of proven and
probable mineable reserves, future prices, operating costs, capital
requirements and reclamation costs.
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary differences
between financial and tax reporting and net operating loss carryforwards.
Deferred tax expenses (benefit) results from the net change during the year
of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all
of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130 "Reporting Comprehensive Income". SFAS No. 130 establishes
standards for the reporting and display of comprehensive income and its
components (revenue, expenses, gains and losses). The purpose of reporting
comprehensive income is to present a measure of all changes in
stockholders' equity that result from recognized transactions and other
economic events of the period, other than transactions with owners in their
capacity as owners.
REPORTING ON COSTS OF START-UP ACTIVITIES
In April 1998, the American Institute of Certified Public Accountant's
issued Statement of Position 98-5 "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") which provides guidance on the financial reporting
of start-up costs and organization costs. It requires costs of start-up
activities and organization costs to be expensed as incurred. SOP 98-5 is
effective for fiscal years beginning after December 15, 1998 with initial
adoption reported as the cumulative effect of a change in accounting
principle. The Company does not anticipate that the statement will have a
significant impact on its future financial statements.
<PAGE> 35
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
MAY 31, 1999
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd.....)
LOSS PER SHARE
Loss per share is computed based on the weighted average number of common
shares and common stock equivalents outstanding during each period, unless
the common stock equivalents are anti-dilutive.
4. SHARE EXCHANGE
On January 9, 1998, the Company merged with Innovin Inc. ("Innovin") by
issuing 43,509 common shares of the Company (after taking account for the
subsequent reverse-stock-split) for all of the 2,175,456 issued and
outstanding common shares of Innovin. Innovin held as its principal asset
175,456 Series K common shares of STB Corp. Innovin acquired the shares of
STB Corp. by exchanging 175,456 of its own common shares for the Series K
common shares of STB Corp. Innovin ceased to exist on January 9, 1998.
For accounting purposes, the share exchange is accounted for as a pooling
of interests by combining the net book values of the assets, liabilities
and shareholders' equity of the involved companies. The Share Exchange does
not result in a revaluation of the net assets and liabilities of the
involved companies since there is no overall change in control of the
companies involved.
These financial statements are based on the assumption that the companies
were combined for the period since incorporation of the Company on December
18, 1997 to May 31, 1999. Summarized results of operations of the separate
companies for the period from December 18, 1997 through January 9, 1998,
the date of acquisition, are as follows:
<TABLE>
<CAPTION>
================================================================
Anglo-Sierra
Resources
Corp. Innovin Inc.
----------------------------------------------------------------
<S> <C> <C>
Net sales $ - $ -
Net loss for the period - -
================================================================
</TABLE>
The summarized assets and liabilities of the separate companies on January
9, 1998, the date of acquisition, were as follows:
<TABLE>
<CAPTION>
==============================================================
Anglo-Sierra
Resources
Corp. Innovin Inc.
--------------------------------------------------------------
<S> <C> <C>
Incorporation costs $ 2,545 $ 2,544
Investment - 175
Current liabilities - -
==============================================================
</TABLE>
<PAGE> 36
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
MAY 31, 1999
================================================================================
5. INCORPORATION COSTS
<TABLE>
<CAPTION>
================================================================
May 31, May 31,
1999 1998
----------------------------------------------------------------
<S> <C> <C>
Incorporation costs $ - $ 5,310
Less: accumulated amortization - (487)
---------- -----------
$ - $ 4,823
================================================================
</TABLE>
6. RESOURCE PROPERTIES
<TABLE>
<CAPTION>
========================================================================
May 31, May 31,
1999 1998
------------------------------------------------------------------------
<S> <C> <C>
Gray Copper Property, British Columbia $ - $ 21,182
========================================================================
</TABLE>
GRAY COPPER PROPERTY, BRITISH COLUMBIA
The Company held a 100% interest in the mining rights for the Gray Copper
Property located in the Skeena Mining Division, British Columbia. The
Company acquired the Gray Copper Property mining rights by issuing 12,000
common shares valued at $21,182. During the final quarter of the year ended
February 28, 1999, management of the Company determined that it would not
proceed further with the development of mining operations on this property,
and all costs of acquisition were written-off to operations. The property
then transferred to a former director for $Nil consideration.
7. CAPITAL STOCK
ADDITIONAL PAID-IN CAPITAL
The excess of proceeds received for common shares over their value of
$0.0001, less share issue costs, is credited to additional paid-in capital.
REVERSE STOCK SPLIT
On March 15, 1999, the Company implemented a 50:1 reverse stock split.
Stockholders' equity has been restated to give retroactive recognition of
the reverse stock split for all periods presented by reclassifying from
common shares to additional paid-in capital the par value of converted
shares arising from the split. In addition, all references to number of
shares and per share amounts of common shares have been restated to reflect
the reverse stock split.
<PAGE> 37
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited - Prepared by Management)
MAY 31, 1999
================================================================================
8. SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING AND INVESTING
ACTIVITIES
There were no non-cash transactions for the three month period ended May
31, 1999. The significant non-cash transaction for the three month period
ended May 31, 1998 consisted of the Company issuing 12,000 common shares in
the amount of $21,182 as consideration for the acquisition of the Gray
Copper Property mining rights (Note 6).
9. INCOME TAXES
The Company's total deferred tax asset at May 31 is as follows:
<TABLE>
<CAPTION>
==============================================================================
1999 1998
------------------------------------------------------------------------------
<S> <C> <C>
Tax benefit of net operating loss carryforward $ 48,046 $ 1,135
Valuation allowance (48,046) (1,135)
----------- ----------
$ - $ -
==============================================================================
</TABLE>
The Company has a net operating loss carryforward of approximately $320,304
(1998 - $7,567). The valuation allowance increased to $48,046 from $46,340
during the three month period ended May 31, 1999 since the realization of
the operating loss carryforwards are doubtful. It is reasonably possible
that the Company's estimate of valuation allowance will change.
The operating loss carryforwards will expire as follows:
<TABLE>
<S> <C>
2005 $ 1,626
2006 314,936
2007 3,742
----------
$ 320,304
=========
</TABLE>
10. COMPREHENSIVE INCOME
Total comprehensive net income (loss) for the three month period ended May
31, 1999 and for the year ended February 28, 1999, was $1063 and
$(311,332), respectively. The only item included in other comprehensive
income is foreign currency translation adjustments in the amounts of $4,805
for the three month period ended May 31, 1999 and $3,604 for the year ended
February 28, 1999.
<TABLE>
<CAPTION>
=========================================================================
Foreign
Currency Accumulated
Translation Comprehensive
Adjustment Income (loss)
-------------------------------------------------------------------------
<S> <C> <C>
Beginning balance, February 28, 1998 $ - $ -
Change for the period 3,604 3,604
---------- ------------
Ending balance, February 28, 1999 3,604 3,604
Current period change 4,805 4,805
---------- ------------
Ending balancing, May 31, 1999 $ 8,409 $ 8,409
=========================================================================
</TABLE>
