<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: August 31, 2000
Commission file number: 1-15165
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 98-0208402
(State of incorporation) (IRS Employer Identification No.)
1177 WEST HASTINGS STREET, #1818, VANCOUVER BC, CANADA
(Address of principal executive offices)
(604) 602-1717
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of August 31, 2000:
<TABLE>
<CAPTION>
CLASS NUMBER OF SHARES
<S> <C>
Common Stock, $0.0001 par value 2,850,422
</TABLE>
TRADITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE)
Yes X No
<PAGE> 2
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly, Anglo-Sierra Resources Corp.)
INDEX
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Statements of Financial Condition -
August 31, 2000 and August 31, 1999
Statements of Operation - Three and Six Months
Ended August 31, 2000 and 1999
Statements of Changes in Stockholders'
Equity - Six Months Ended August 31, 2000
Statements of Comprehensive Income -
Three and Six Months Ended August 31, 2000 and 1999
Statements of Cash Flows - Six Months
Ended August 31, 2000 and 1999
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature
i
<PAGE> 3
PART I - FINANCIAL INFORMATION
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(FORMERLY ANGLO-SIERRA RESOURCES CORP.)
ITEM 1. FINANCIAL STATEMENTS
The accompanying financial statements of BULLET ENVIRONMENTAL
TECHNOLOGIES, INC. (the "Company") are unaudited but, in the opinion of
management, reflect in all material respects, the Company's financial condition
and changes therein as of August 31, 2000, and the results of operations and
cashflows for the period, in conformity with generally accepted accounting
principles.
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
<CAPTION>
=============================================================================================================================
August 31, February 29,
2000 2000
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 676 $ 8,377
--------------- ----------------
TOTAL ASSETS $ 676 $ 8,377
=============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 234,622 $ 215,535
Note payable (Note 5) 20,165 -
--------------- ---------------
Total current liabilities 254,787 215,535
--------------- ---------------
STOCKHOLDERS' EQUITY
Capital stock (Note 6)
Authorized
30,000,000 Common shares, par value of $0.0001
5,000,000 Preference shares, par value of $0.0001 Issued
2,850,422 Common shares (February 29, 2000 - 2,850,422 common shares) 285 285
Additional paid-in capital 1,146,714 1,146,714
Deficit (316,562) (316,562)
Deficit accumulated during the development stage (1,086,970) (1,040,097)
Accumulative comprehensive other income 2,422 2,502
--------------- ---------------
(254,111) (207,158)
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 676 $ 8,377
=============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
1
<PAGE> 4
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
<CAPTION>
==============================================================================================================================
From Start of
Development
Stage on
March 1, Three Month Three Month Six Month Six Month
1999 to Period Ended Period Ended Period Ended Period Ended
August 31, August 31, August 31, August 31, August 31,
2000 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EXPENSES
Bank charges $ 581 $ 82 $ 82 $ 164 $ 99
Consulting fees 80,685 - 62,444 - 62,444
Interest 165 165 - 165 -
Management fees 53,421 9,631 - 22,391 -
Office and miscellaneous 2,527 259 471 978 471
Printing 17,282 2,933 - 4,543 -
Professional fees 485,897 15,358 264,220 16,579 264,970
Rent 16,695 - 6,481 - 7,918
Stock-based compensation 385,700 - - - -
Transfer agent and registrar 5,047 250 750 1,009 2,288
Travel 38,970 - 35,955 1,044 35,955
--------------- --------------- --------------- --------------- ---------------
LOSS FOR THE PERIOD $ (1,086,970) $ (28,678) $ (370,403) $ (46,873) $ (374,145)
==============================================================================================================================
BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.17) $ (0.02) $ (0.20)
==============================================================================================================================
WEIGHTED AVERAGE NUMBER OF
SHARES OF COMMON STOCK
OUTSTANDING 2,850,422 2,150,475 2,850,422 1,878,736
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
2
<PAGE> 5
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
<CAPTION>
==============================================================================================================================
Deficit
Accumulated Accumulative
Number of Additional During the Comprehen-
Common Paid-in Development sive
Shares Amount Capital Deficit Stage Other Income Total
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT
FEBRUARY 28, 1999 150,475 $ 15 $ 311,284 $ (316,562) $ - $ 3,604 $ (1,659)
Common stock issued for cash 2,000,000 200 99,800 - - - 100,000
Common stock issued for cash 700,000 70 349,930 - - 350,000
-
Return of common stock to
Treasury for cancellation (53) - - - - - -
Stock-based compensation
For options issued to
Consultants and
Non-employees - - 385,700 - - - 385,700
Loss for the period - - - - (1,040,097) - (1,040,097)
Translation adjustment - - - - - (1,102) (1,102)
----------- ----------- ----------- ----------- ----------- ------------ -----------
BALANCE AT
FEBRUARY 29, 2000 2,850,422 285 1,146,714 (316,562) (1,040,097) 2,502 (207,158)
Loss for the period - - - - (46,873) - (46,873)
Translation adjustment - - - - - (80) (80)
----------- ----------- ----------- ----------- ----------- ------------ -----------
BALANCE AT
AUGUST 31, 2000 2,850,422 $ 285 $ 1,146,714 $ (316,562) $(1,086,970) $ 2,422 $ (254,111)
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
3
<PAGE> 6
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
<CAPTION>
==============================================================================================================================
From Start of
Development
Stage on
March 1, Three Month Three Month Six Month Six Month
1999 to Period Ended Period Ended Period Ended Period Ended
August 31, August 31, August 31, August 31, August 31,
2000 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LOSS FOR THE PERIOD $ (1,086,970) $ (28,678) $ (370,403) $ (46,873) $ (374,145)
OTHER COMPREHENSIVE INCOME
Foreign currency translation
Adjustments (1,182) (153) (3,447) (80) 1,358
--------------- --------------- --------------- --------------- ---------------
COMPREHENSIVE LOSS FOR
THE PERIOD $ (1,088,152) $ (28,831) $ (373,850) $ (46,953) $ (372,787)
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
<PAGE> 7
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
From Start of
Development
Stage on
March 1, Six Month Six Month
1999 to Period Ended Period Ended
August 31, August 31, August 31,
2000 2000 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (1,086,970) $ (46,873) $ (374,145)
Adjustments to reconcile loss to net cash used in
Operating activities:
Stock-based compensation 385,700 - -
Interest 165 165 -
Changes in other operating assets and liabilities:
Increase in prepaid expense - - -
Increase in accounts payable and accrued liabilities 232,636 19,087 283,602
--------------- --------------- ---------------
Net cash used in operating activities (468,469) (27,621) (90,543)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock for cash 450,000 - 100,000
Note payable 20,000 20,000 -
--------------- --------------- ---------------
Net cash provided by financing activities 470,000 20,000 100,000
--------------- --------------- ---------------
CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 1,531 (7,621) 9,457
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (1,182) (80) 1,358
--------------- --------------- ---------------
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 349 (7,701) 10,815
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 327 8,377 327
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 676 $ 676 $ 11,142
==============================================================================================================================
CASH PAID DURING THE PERIOD FOR:
Interest expense $ - $ - $ -
Income taxes - - -
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
<PAGE> 8
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
AUGUST 31, 2000
(Unaudited)
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated in Delaware on December 18, 1997. In
March 1999, the Company changed its name from Anglo-Sierra Resources
Corp. to Bullet Environmental Technologies, Inc. and is considered a
development stage company in accordance with Statement of Financial
Accounting Standards No. 7, "Accounting and Reporting by Development
Stage Enterprises".
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 C0ompany for
the year ended February 29, 2000. The results of operations for the
six months ended August 31, 2000 are not necessarily indicative of the
results to be expected for the year ending February 28, 2001.
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 equity
financings.
<TABLE>
<CAPTION>
August 31, February 29,
2000 2000
==============================================================================================================
<S> <C> <C>
Deficit accumulated during the development stage $ (1,086,970) $ (1,040,097)
Working capital (deficiency) (254,111) (207,158)
============================================================================== ================ ==============
</TABLE>
3. SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include highly liquid investments with
original maturities of three months or less.
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.
6
<PAGE> 9
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
AUGUST 31, 2000
(Unaudited)
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, "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 stockholders' equity. Exchange gains and losses resulting
from foreign currency transactions are included in income for the
year.
STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards No. 123 ("SFAS 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.
The Company accounts for stock-based compensation issued to
non-employees in accordance with the provisions of SFAS 123 and the
Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF
96-18"), "Accounting for Equity Instruments that are Issued to Other
Than Employees for Acquiring or in Conjunction with Selling, Goods or
Services".
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("SFAS
133"),"Accounting for Derivative Instruments and Hedging Activities"
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. In June
1999, FASB issued SFAS 137 to defer the effective date of SFAS 133 to
fiscal quarters of fiscal years beginning after June 15, 2000. The
Company does not anticipate that the adoption of the statement will
have a significant impact on its financial statements.
INCOME TAXES
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 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
The Company has adopted Statement of Financial Accounting Standards
No. 130 ("SFAS 130"), "Reporting Comprehensive Income". This
statement establishes rules for the reporting of comprehensive income
and its components.
7
<PAGE> 10
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
AUGUST 31, 2000
(Unaudited)
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd...)
REPORTING ON COSTS OF START-UP ACTIVITIES
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. The Company has adopted SOP 98-5.
LOSS PER SHARE
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" requires basic and diluted earnings per share to be presented.
Basic earnings per share is computed by dividing income available to
common shareholders by the weighted average number of shares of common
stock outstanding during the period. Diluted earnings per share takes
into consideration shares of common stock outstanding (computed under
basic earnings per share) and potentially dilutive shares of common
stock.
DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
Statement of Financial Accounting Standards No. 131 ("SFAS 131"),
"Disclosure About Segments of an Enterprise and Related Information"
requires use of the "management approach" model for segment reporting.
The management approach model is based on the way a company's
management organizes segments within the company for making operating
decisions and assessing performance. Reportable segments are based on
products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a
company. Currently, SFAS 131 has no effect on the Company's financial
statements as substantially all of the Company's operations are
conducted in one industry segment in the United States.
4. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash
equivalents, accounts payable and note payable. 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.
5. NOTE PAYABLE
<TABLE>
<CAPTION>
August 31, February 29,
2000 2000
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Principal amount $ 20,000 $ -
Accrued interest 165 -
------------- ---------------
$ 20,165 $ -
===========================================================================================================
</TABLE>
The note payable bears interest at 6% per annum, is unsecured and is
due on demand. The fair value of the note payable is not determinable
as it has no specific terms of repayment.
8
<PAGE> 11
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
AUGUST 31, 2000
(Unaudited)
6. CAPITAL STOCK
COMMON STOCK
In December 1997, the Company issued 100 shares of common stock for
cash proceeds of $10.
In December 1997, the Company issued 175,456 shares of common stock at
a deemed value of $175 pursuant to a share exchange with Innovin Inc.
In December 1997, the Company issued 2,000,000 shares of common stock
for cash proceeds of $5,000.
In January 1998, the Company issued 3,000,000 shares of common stock
for cash proceeds of $300.
In March 1998, the Company issued 600,000 shares of common stock at a
deemed value of $21,182 for the acquisition of resources properties.
In October 1998, the Company issued 275,000 shares of common stock for
cash proceeds of $44,985.
In November 1998, the Company issued 216,200 shares of common stock
for cash proceeds of $35,111.
In November 1998, the Company issued 800,000 shares of common stock at
a deemed value of $130,000 for the acquisition of mineral properties.
In December 1998, the Company issued 272,000 shares of common stock
for cash proceeds of $44,092.
In January 1999, the Company issued 185,000 shares of common stock for
cash proceeds of $30,444.
In March 1999, the Company implemented a 50:1 reverse stock split.
Fractional shares totalling 53 shares of common stock were returned to
treasury for cancellation in conjunction with the reverse stock split.
In March 1999, the Company issued 2,000,000 shares of common stock for
cash proceeds of $100,000.
In February 2000, the Company issued 700,000 shares of common stock
for cash proceeds of $350,000.
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
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.
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.
NON-VESTED STOCK OPTIONS
During the year ended February 29, 2000, the Company issued options to
consultants and non-employees to acquire up to 84,504 shares of common
stock of the Company at an exercise price of $0.50 per share. The
options are exerciseable for a period of five years from the date that
is 366 days after the completion of a public share offering by the
Company.
9
<PAGE> 12
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
AUGUST 31, 2000
(Unaudited)
7. STOCK BASED COMPENSATION EXPENSE
SFAS 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 quoted market price of the Company's stock at the
date of grant over the option price.
The Company accounts for stock issued to non-employees in accordance
with the provisions of SFAS 123 and the Emerging Issues Task Force
consensus in Issue No. 96-18, "Accounting for Equity Instruments that
are Issued to Other Than Employees for Acquiring or in Conjunction
with Selling, Goods or Services".
Following is a summary of the stock option activity:
<TABLE>
<CAPTION>
==============================================================================================================
Weighted
Average
Number Exercise
of Shares Price
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at February 28, 1999 - $ -
Granted 84,504 0.50
Forfeited - -
Exercised - -
-------------
Outstanding at February 29, 2000 and August 31, 2000 84,504 0.50
==============================================================================================================
</TABLE>
Following is a summary of the status of options outstanding at August
31, 2000:
<TABLE>
<CAPTION>
==============================================================================================================
Outstanding Options Exercisable Options
-------------------------------------------- --------------------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Contractual Exercise Exercise
Exercise Price Number Life Price Number Price
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 0.50 84,504 5.00 $ 0.50 - $ 0.50
==============================================================================================================
</TABLE>
COMPENSATION
The Company granted 84,504 options to consultants and non-employees
during the year ended February 29, 2000 which are accounted for under
SFAS 123 and EITF 96-18. Accordingly, using the Black-Scholes option
pricing model, the options are marked to fair value through charges to
operations as stock-based compensation. Stock-based compensation
recognized during the year ended February 29, 2000 was $385,700. This
amount can be allocated to the other expense categories in the
accompanying statements of operations as consulting fees of $255,600
and professional fees of $130,100.
10
<PAGE> 13
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
AUGUST 31, 2000
(Unaudited)
7. STOCK BASED COMPENSATION EXPENSE (cont'd...)
The assumptions used in calculating the fair value of options granted
using the Black-Scholes option pricing model are as follows:
<TABLE>
<CAPTION>
============================================================================================================
August 31, February 29,
2000 2000
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Risk-free interest rate - 7.00%
Expected life of the options - 2 years
Expected volatility - 194%
Expected dividend yield - -
============================================================================================================
</TABLE>
8. RELATED PARTY TRANSACTIONS
During the six month period ended August 31, 2000, the Company paid or
accrued management fees of $22,391 (1999 - $Nil) to a company
controlled by a director of the Company.
Included in accounts payable as at August 31, 2000 is $12,008 of
accrued management fees due to a company controlled by a director of
the Company.
9. INCOME TAXES
The Company's total deferred tax asset is as follows:
<TABLE>
<CAPTION>
==============================================================================================================
August 31, February 29,
2000 2000
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Tax benefit of net operating loss carryforward $ 457,200 $ 436,500
Valuation allowance (457,200) (436,500)
------------- -------------
$ - $ -
==============================================================================================================
</TABLE>
The Company has a net operating loss carryforward of approximately
$1,016,000 (February 29, 2000 - $970,000). The valuation allowance
increased to $457,200 from $436,500 during the six month period ended
August 31, 2000 since the realization of the operating loss
carryforwards are doubtful. It is reasonably possible that the
Company's estimate of the valuation allowance will change.
The operating loss carryforwards expire as follows:
<TABLE>
<S> <C>
2005 $ 1,000
2006 315,000
2007 654,000
2008 46,000
----------------
$ 1,016,000
================
</TABLE>
11
<PAGE> 14
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
AUGUST 31, 2000
(Unaudited)
10. ACCUMULATED COMPREHENSIVE OTHER INCOME
Total comprehensive loss for the six month periods ended August 31,
2000 and August 31, 1999 is $(46,953) and $(372,787), respectively.
The only item included in other comprehensive income is foreign
currency translation adjustments in the amounts of $(80) and $1,358
for the six month periods ended August 31, 2000 and August 31, 1999,
respectively.
<TABLE>
<CAPTION>
=============================================================================================================
Foreign
Currency Accumulated
Translation Comprehensive
Adjustment Other Income
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Beginning balance, February 28, 1999 $ 3,604 $ 3,604
Change for the period (1,102) (1,102)
---------------- ----------------
Ending balance, February 29, 2000 2,502 2,502
Current period change (80) (80)
---------------- ----------------
Ending balance August 31, 2000 $ 2,422 $ 2,422
========================================================================= ================= =================
</TABLE>
12
<PAGE> 15
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion is based on our Consolidated Financial
Statements included in Item 1 of this filing. Such financial statements have
been prepared in accordance with generally accepted accounting principles.
FORWARD-LOOKING STATEMENTS. The statements contained in this filing
that are not historical fact are "forward-looking statements". These statements
can often be identified by the use of forward-looking terminology such as
"estimates," "projects," "believes," "expects," "may," "will," "should,"
"intends," or "anticipates" or the negative thereof or other variations thereon
or comparable terminology, or by discussions of strategy that involve risks and
uncertainties. Management wishes to caution the reader that these
forward-looking statements, such as the timing, costs and scope of its
acquisition of, or investments in, existing businesses, the revenue and
profitability levels of such businesses, and other matters contained above and
herein in this filing regarding matters that are not historical facts, are only
predictions. No assurance can be given that the future results indicated,
whether expressed or implied, will be achieved. While sometimes presented with
numerical specificity, these projections and other forward-looking statements
are based upon a variety of assumptions relating to our business which,
although considered reasonable our management, may not be realized. Because of
the number and range of the assumptions underlying our projections and
forward-looking statements, many of which are subject to significant
uncertainties and contingencies that are beyond the reasonable control of our
management, some of the assumptions inevitably will not materialize and
unanticipated events and circumstances may occur subsequent to the date of this
filing. These forward-looking statements are based on current expectations, and
we assume no obligation to update this information. Therefore, our actual
experience and results achieved during the period covered by any particular
projections or forward-looking statements may differ substantially from those
projected. Consequently, the inclusion of projections and other forward-looking
statements should not be regarded as a representation by us or any other person
that these estimates and projections will be realized, and actual results may
vary materially. There can be no assurance that any of these expectations will
be realized or that any of the forward-looking statements contained herein will
prove to be accurate.
OVERVIEW AND PLAN OF OPERATION. As of August 31, 2000, we are not
engaged in any business and have not earned any revenues. Having terminated our
negotiations for the acquisition of a financial services company during the
fourth quarter of fiscal year 1999, we are not currently engaged in any
business. We intend to explore the acquisition of one or more different
companies in the future and intend to raise additional funds in order to do so.
MATERIAL CHANGES IN FINANCIAL CONDITION. The only material changes to
our financial condition are reflected in the increase in current liabilities
due to our incurring additional expenses and our borrowing of funds pursuant to
certain promissory notes. On July 7, 2000, we borrowed $15,000 from ZMAX
Capital Corp. to be used as working capital. We executed a promissory demand
note payable to ZMAX Capital, bearing 6% interest. On August 8, 2000, we
borrowed an additional $5,000 from ZMAX Capital to be used as working capital.
This debt was also evidenced by a 6% demand promissory note payable to ZMAX
Capital.
For the three months ended August 31, 2000, we incurred expenses
totaling $28,678. These expenses were incurred primarily for management
services and for other professional services rendered in connection with the
securities reporting required pursuant to the Securities Exchange Act of 1934.
Such expenses include: $9,631 in management fees; $2,933 in printing expenses;
$15,358 in professional fees; and $250 in transfer agent fees. Additionally, we
incurred expenses during the quarter for interest expense ($165) office
expenses ($259), and bank charges ($82).
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YEAR 2000. All of our information technology ("IT") and non-IT systems
have continued to function beyond January 1, 2000 without any interruption. As
the Year 2000 progresses, however, we may experience IT problems associated
with the Year 2000 that have not yet been discovered. As we are not presently
engaged in any business, the risk of such occurrence is limited. We will
continue to monitor our equipment and systems as necessary.
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PART II - OTHER INFORMATION
BULLET ENVIRONMENTAL TECHNOLOGIES,INC.
(formerly Anglo-Sierra Resources, Inc.)
ITEM 1. LEGAL PROCEEDINGS - None.
ITEM 2. CHANGES IN SECURITIES - None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.
ITEM 5. OTHER INFORMATION - None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
27 Financial Data Schedule for the period ended August 31, 2000.
(b) REPORTS ON FORM 8-K - None.
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
Date: October ____, 2000 _________________________
G.W. Norman Wareham
President, Treasurer and
Chief Executive Officer
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