<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT of 1934
For the year ended February 29, 2000
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------- --------------
Commission file number 1-15165
-----------------
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(Exact name of small business issuer
as specified in its charter)
DELAWARE 98-0208402
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
1177 West Hastings Street, #1818, Vancouver, BC, Canada V6E 2K3
(Address of principal executive offices)
(604) 602-1717
(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act:
NAME OF EACH EXCHANGE ON WHICH
TITLE OF EACH CLASS EACH CLASS IS REGISTERED
------------------- ------------------------
Common Stock, $0.0001 Par Value Pink Sheets
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
--- ---
Check if the disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the issuer's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this FORM 10-KSB
or any amendment to this FORM 10-KSB ( ).
The issuer's revenues for its most recent fiscal year were $ 0 .
----------------
The aggregate market value of the issuer's voting stock held as of February 29,
2000 by non-affiliates of the issuer, based upon the average of the closing bid
and asked prices on that date, was approximately $17,815,137.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
Yes No
------- -------
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer's common equity, as of the latest
practicable date: 2,850,422 AS OF FEBRUARY 29, 2000
Transitional Small Business Disclosure Format (check one): Yes No X
----- ----
<PAGE> 2
BULLET ENVIRONMENTAL TECHNOLOGIES, NC.
FORM 10-KSB
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ITEM 1. DESCRIPTION OF BUSINESS...............................................................................1
ITEM 2. DESCRIPTION OF PROPERTY...............................................................................2
ITEM 3. LEGAL PROCEEDINGS.....................................................................................2
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................................................2
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS....................................2
ITEM 6. PLAN OF OPERATIONS....................................................................................3
ITEM 7. FINANCIAL STATEMENTS..................................................................................4
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE..................4
ITEM 9. DIRECTORS, EXECUTIVES, OFFICERS, PROMOTERS, CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT...................................................................................4
ITEM 10. EXECUTIVE COMPENSATION................................................................................4
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT........................................6
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................................................7
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 10-KSB.............................................................7
SIGNATURES........................................................................................................7
</TABLE>
I
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Business Development
Bullet Environmental Technologies, Inc. was originally incorporated
under the laws of the State of Delaware on December 18, 1997 under the name of
"Innovin Development Corporation." We merged with Innovin, Inc., a Colorado
corporation effective March 5, 1998 with Innovin Development Corporation being
the surviving corporation. On March 5, 1998, in anticipation of going into the
mining business, we amended our Certificate of Incorporation to change our name
to, "Anglo-Sierra Resources Corp." On March 15, 1999, in order to reflect our
plan to market certain waste treatment technology under the trade name "Bullet,"
we again amended our Certificate of Incorporation to, among other things, change
our name to, "Bullet Environmental Technologies, Inc."
Business of Bullet Environmental Technologies, Inc.
We are a development stage company and are not presently engaged in any
business. Accordingly, the auditors report on our financial statements notes
that we will require additional financing or future profitability if we are
going to remain as a going concern. Since our formation, we have explored
entering into various businesses but did not commence operations in any of these
businesses. The particular businesses explored were:
- From December 18, 1997 until March 5, 1998, we explored the
possibility of developing and constructing wineries. Our
current management 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. Our current management 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, we intended to
develop mining properties. Mining rights in two mining
properties in British Columbia, Canada were acquired and we
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 our inability to raise additional
capital for these purposes, operation of these properties
never commenced and we disposed of the mining rights on
February 26, 1999.
- In March 1999, we explored developing waste and sewage
treatment systems. On March 25, 1999, we acquired a license to
use certain waste treatment technology utilizing the trade
name "Bullet". The license entitled us to commercially use a
patent-pending technology for dissolving gases into liquids at
low pressure. We intended to market the technology for certain
agricultural uses. Our 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.
Subsequently, the developer decided to focus his efforts on
applications of the technology in the petroleum industry, an
area not permitted by our license. Accordingly, our
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.
<PAGE> 4
- In May 1999, we 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, we entered into a second non-binding letter
of intent with Somerset Financial Partners, Inc. ("Somerset"),
a different financial services company. We subsequently
terminated our negotiations with Somerset, executing a Mutual
Termination and Release Agreement as of April 9, 2000. We are
not currently engaged in any business.
Reports to Securities Holders
We are a publicly reporting company, filing reports with the Securities
and Exchange Commission ("SEC") as required by Sections 13 an 15 of the
Securities Exchange Act.
A copy of the materials which we have filed 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.
ITEM 2. DESCRIPTION OF PROPERTY
We do not own any real estate, nor invest in any real estate
securities. We have no office facilities or real property holdings except that
we currently rent office space in Vancouver, British Columbia on a
month-to-month basis at a monthly rental of $2,000 Canadian.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which we, our director, or
our officer are a party. We have no knowledge of any pending legal proceedings
to which parties owning 5% of our common stock are a party. We do not know of
any legal proceedings contemplated or threatened by or against us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the quarter ended February 29,
2000.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Markets - Until July 31, 1999, our common stock was quoted on the OTC Bulletin
Board, a service maintained by the National Association of Securities Dealers,
Inc. under the symbol, "BLLE". Since August 1, 1999, our common stock has been
quoted on the "Pink Sheets," a service maintained by the National Quotation
Bureau, LLC. The approximate number of holders of the common stock as of
February 29, 2000 is 56. The approximate number of shares of our common stock
outstanding is 2,850,422.
2
<PAGE> 5
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
3/01/99-5/30/99......................................................... 7 1/4
6/01/99-8/30/99......................................................... 9 9/16 4
9/01/99-11/30/99........................................................ 5 1/4 2 1/2
12/01/99-2/29/00........................................................ 4 15/16 2 7/8
</TABLE>
**Our common stock was first quoted on February 24, 1999.
Dividends - During the last two years, we have not paid any dividends,
nor do we anticipate paying any cash dividends in the foreseeable future.
Although it is our intention to utilize all available funds for the development
of our business, no restrictions are in place which would limit or restrict our
ability to pay dividends.
Recent Sales of Unregistered Securities - We made the following sales
of unregistered common stock during the fiscal quarter ended February 29, 2000.
<TABLE>
<CAPTION>
DATE SHARES
OF ISSUE TITLE PURCHASER SOLD CONSIDERATION EXEMPTION
-------- ----- --------- ---- ------------- ---------
<S> <C> <C> <C> <C> <C>
01/20/00 Common Megan Holdings Limited 100,000 $ 50,000 Regulation D
01/20/00 Common Milner Finance Limited 200,000 100,000 Regulation D
01/20/00 Common Circuit Enterprise Limited 200,000 100,000 Regulation D
01/20/00 Common Mabey Investments Limited 200,000 100,000 Regulation D
</TABLE>
ITEM 6. PLAN OF OPERATIONS.
Having terminated our negotiations for the acquisition of Somerset, we
are not currently engaged in any business. We intend to explore the acquisition
of one or more different financial services companies.
We recently completed a financing through the private placement of our
common stock. In January 2000, we issued seven hundred thousand shares of our
common stock in consideration of the aggregate sum of $350,000. This amount was
primarily used to satisfy certain administrative and professional fees
previously incurred, including legal, accounting and management fees. Currently,
we have approximately $8,377 in cash to be applied toward our short-term
expenses. We anticipate that additional capital of approximately $200,000 will
be necessary during the next twelve months in order to meet our current
obligations. We plan to raise the necessary capital through one or more
additional private placements of our common stock. We have no contingency plans
developed in the event that we are not successful in raising additional funds
through private placement.
3
<PAGE> 6
We have no specific plans regarding sales of plant or significant
equipment, or for significant changes in the number of employees.
ITEM 7. FINANCIAL STATEMENTS
Our financial statements, as indexed in Item 13, are to be attached to
this filing and incorporated herein by reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We did not have any disagreements on accounting or financial
disclosures with our principal independent accountant during the previous two
years.
PART III.
ITEM 9. DIRECTORS, EXECUTIVES, OFFICERS, PROMOTERS, CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Our sole director and officer, who will serve until our next annual meeting, or
until his successors are elected or appointed and qualified, is as follows:
<TABLE>
<CAPTION>
YEAR
NAME AGE 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 our sole director on March 26,
1999. 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.
We have no other officers or employees. Given that we have only one
director and officer, no family relationships between such positions exists.
No legal proceedings have been instituted in the previous five years
against our sole director and officer, Mr. G.W. Norman Wareham. We have no
knowledge of any legal proceedings against any predecessor director, officer, or
promoter.
ITEM 10. EXECUTIVE COMPENSATION
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 29, 2000:
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Fiscal
Name and Principal Position* Year Ended* Salary* Bonus* Other Compensation*
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
G.W. Norman Wareham,
President and Sole Director 2/29/00 0 0 0
2/28/99 0 0 0
</TABLE>
* In addition, former officers and directors were paid management fee as
follows:
<TABLE>
<CAPTION>
Fiscal
Name And Principal Position Year Ended Salary Bonus Other Compensation
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tim Coupland,
Former President and Director 2/29/00 0 0 $ 685**
2/28/99 0 0 78,840**
Troy Adams, Former Director 2/29/00 0 0 0
2/28/99 0 0 4,930**
Rick Clemens, Former Director 2/29/00 0 0 0
2/28/99 0 0 5,016**
</TABLE>
** The services provided by Mr. Coupland, a trained geologist, included:
locating mining properties for possible acquisition, 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 our operations, including preparing offering
memoranda, subscription documents and administrative filings and stock issuances
in conjunction our legal counsel; investor relations; and day-to-day operations
and bookkeeping. In 1999, we also paid $4,762 to Mr. Coupland and $1,317 to Mr.
Adams to reimburse them for office and travel expenses. In February 1999, owners
of approximately 66% of the shares of our outstanding common stock, sold that
stock. The purchasers of that stock required removal of all of the directors who
had been on the board during our prior unsuccessful efforts to engage in the
mining business. Accordingly, Messrs. Coupland, Adams and Clemens were replaced
as directors.
Option/SAR Grants. We have not granted any options or stock appreciation rights
to our officers or directors during the last fiscal year.
Aggregate Option/SAR Exercises. No stock options or stock appreciation rights
have been exercised in the last fiscal year.
Long Term Incentive Plan Awards. No long term incentive plans have been awarded.
5
<PAGE> 8
Compensation of Directors. Our directors are to be compensated based upon the
fair market value of the services provided by such director to us, as approved
by the board of directors from time to time. No director compensation was paid
or authorized by our board of directors during the fiscal year ended February
29, 2000.
Employment Contracts And Termination Of Employment. We have not entered any
employment contracts. No compensation plan or arrangement exists which provide
for compensation in the event of a termination or resignation of our president.
Report on Repricing of Options/SARS. No options or stock appreciation rights
have been granted to our directors or officers.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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 February 29, 2000 % of Class
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Cede & Co. 140,728 4.94
Box 20
Bowling Green Station
New York, NY 10274
Common Affaires Financiales S.A. 200,000 7.02
c/o Eugen Curti
Seestrasse 5 CH-8002
Zurich, Switzerland
Common Milner Finance Limited 200,000 7.02
c/o EBC Trust Corporation
6 Boulevard Des Moulins
Monaco, 98000
Common Circuit Enterprises Limited 200,000 7.02
c/o EBC Trust Corporation
6 Boulevard Des Moulins
Monaco, 98000
Common Mabey Investments Limited 200,000 7.02
c/o EBC Trust Corporation
6 Boulevard Des Moulins
Monaco, 98000
</TABLE>
Our sole director and officer does not own any shares of our common stock.
No arrangements presently exist which would result in a change in control.
6
<PAGE> 9
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended February 29, 2000, we paid $31,030 to
Wareham Management, Ltd., a company controlled by our president, Mr. G.W. Norman
Wareham, for management services provided. Payment of these management fees was
approved by our board of directors.
On February 26, 1999, we entered into an Assignment and Assumption
Agreement ("Assignment Agreement") with Mr. Tim Coupland. Mr. Coupland had
served as our promoter, and at the time of the Assignment Agreement, was our
president and a director. Pursuant to the Assignment Agreement, all of our
assets, consisting primarily of mining claims in two mining properties, which we
had determined that we could not develop economically and could not afford to
maintain, were assigned to Mr. Coupland. Mr. Coupland assumed all of our
liabilities and obligations as of January 31, 1999. At the time, we were not
aware of any actual liabilities. However, the Assignment Agreement was designed
to protect us 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 our shareholders.
Our promoters were Mr. Tim Coupland and Mr. Andrew Hromyk who provided
services in exchange for shares of our common stock.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 10-KSB
F-1 Audited Financial Statements as of February 29, 2000,
including audited balance sheet, and audited statements of
income, cash flows, and changes in stockholders' equity.
3(i)(a) Certificate of Incorporation. (incorporated by reference to
the Form 10-SB filed on September 20, 1999)
(b) Amendment to Certificate of Incorporation dated February 20,
1998. (incorporated by reference to the Form 10-SB filed on
September 20, 1999)
(c) Certificate of Amendment of Certificate of Incorporation
dated March 15, 1998. (incorporated by reference to the Form
10-SB filed on September 20, 1999)
3(ii) Bylaws. (incorporated by reference to the Form 10-SB filed
on September 20, 1999)
27 Financial Data Schedule
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
issuer caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
Date: June 13, 2000 /s/ G.W. Norman Wareham
---------------------------------------
G.W. Norman Wareham, President
7
<PAGE> 10
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(FORMERLY ANGLO-SIERRA RESOURCES CORP.)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
(EXPRESSED IN UNITED STATES DOLLARS)
FEBRUARY 29, 2000
<PAGE> 11
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of
Bullet Environmental Technologies, Inc.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
We have audited the accompanying balance sheets of Bullet Environmental
Technologies, Inc. (formerly Anglo-Sierra Resources Corp. ) as at February 29,
2000 and February 28, 1999 and the related statements of operations,
stockholders' equity and cash flows for the years ended February 29, 2000 and
February 28, 1999 and for the period from the start of development stage on
March 1, 1999 to February 29, 2000. 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 29, 2000 and
February 28, 1999 and the results of its operations and its cash flows for the
years ended February 29, 2000 and February 28, 1999 and for the period from the
start of development stage on March 1, 1999 to February 29, 2000 in conformity
with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming that Bullet
Environmental Technologies, Inc. (formerly 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
May 24, 2000
<PAGE> 12
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
=============================================================================================================================
February 29, February 28,
2000 1999
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 8,377 $ 327
----------- --------
TOTAL ASSETS $ 8,377 $ 327
=============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 215,535 $ 1,986
----------- --------
STOCKHOLDERS' EQUITY
Capital stock (Note 5)
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 (1999 - 150,475 common shares) 285 15
Additional paid-in capital 1,146,714 311,284
Deficit (316,562) (316,562)
Deficit accumulated during the development stage (1,040,097) --
Accumulative comprehensive other income 2,502 3,604
----------- --------
(207,158) (1,659)
----------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,377 $ 327
=============================================================================================================================
</TABLE>
HISTORY AND ORGANIZATION OF THE COMPANY (Note 1)
ON BEHALF OF THE BOARD:
/s/ G. W. Norman Wareham Director
----------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
====================================================================================================================================
From Start of
Development
Stage on
March 1,
1999 to Year Ended Year Ended
February 29, February 29, February 28,
2000 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EXPENSES
Amortization of incorporation costs $ -- $ -- $ 5,089
Bank charges 417 417 146
Consulting fees 80,685 80,685 14,616
Foreign exchange loss -- -- 344
Management fees 31,030 31,030 84,455
Office and miscellaneous 1,549 1,549 12,346
Printing 12,739 12,739 2,424
Professional fees 469,318 469,318 17,543
Rent 16,695 16,695 --
Stock-based compensation 385,700 385,700 --
Transfer agent and registrar 4,038 4,038 11,021
Travel 37,926 37,926 5,930
Write-off of resource properties -- -- 160,847
----------- ----------- ---------
LOSS BEFORE OTHER ITEM (1,040,097) (1,040,097) (314,761)
OTHER ITEM
Write-off of investment -- -- (175)
----------- ----------- ---------
LOSS FOR THE PERIOD $(1,040,097) $(1,040,097) $(314,936)
====================================================================================================================================
BASIC AND DILUTED LOSS PER SHARE $ (0.48) $ (2.52)
====================================================================================================================================
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING 2,148,831 125,073
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development 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 Development Translation
Shares Amount Capital Deficit Stage Adjustment Total
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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
Shares issued for cash 700,000 70 349,930 -- -- -- 350,000
Return of shares 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)
Accumulative comprehensive
other income -- -- -- -- -- (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)
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
============================================================================================================
From Start of
Development
Stage on
March 1,
1999 to Year Ended Year Ended
February 29, February 29, February 28,
2000 2000 1999
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LOSS FOR THE PERIOD $(1,040,097) $(1,040,097) $(314,936)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments (1,102) (1,102) 3,604
----------- ----------- ---------
COMPREHENSIVE LOSS FOR THE PERIOD $(1,041,199) $(1,041,199) $(311,332)
============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 16
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
==============================================================================================================================
From Start of
Development
Stage on
March 1,
1999 to Year Ended Year Ended
February 29, February 29, February 28,
2000 2000 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $(1,040,097) $(1,040,097) $(314,936)
Adjustments to reconcile loss to net cash
used in operating activities:
Amortization of incorporation costs -- -- 5,089
Write-off of resource properties -- -- 160,847
Write-off of investment -- -- 175
Stock-based compensation 385,700 385,700 --
Changes in other operating assets and liabilities
Increase in accounts payable and accrued liabilities 213,549 213,549 581
----------- ----------- ---------
Net cash used in operating activities (440,848) (440,848) (148,244)
----------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of resource property -- -- (9,665)
----------- ----------- ---------
Net cash used in investing activities -- -- (9,665)
----------- ----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock for cash 450,000 450,000 154,632
----------- ----------- ---------
Net cash provided by financing activities 450,000 450,000 154,632
----------- ----------- ---------
CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 9,152 9,152 (3,277)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (1,102) (1,102) 3,604
----------- ----------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 8,050 8,050 327
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 327 327 --
----------- ----------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,377 $ 8,377 $ 327
==============================================================================================================================
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> 17
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 29, 2000
================================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated in Delaware on December 18, 1997. The
Company was considered in the exploration stage until February 1999 at
which time it ceased being an exploration stage Company.
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".
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>
==================================================================================================================
February 29, February 28,
2000 1999
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deficit accumulated during the development stage $(1,040,097) $ --
Working capital (deficiency) (207,158) (1,659)
==================================================================================================================
</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.
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 shareholders' equity under cumulative translation adjustment.
Exchange gains and losses resulting from foreign currency transactions
are included in income for the year.
<PAGE> 18
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 29, 2000
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd...)
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 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.
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.
<PAGE> 19
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 29, 2000
================================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd...)
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 and accounts 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. 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.
<PAGE> 20
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 29, 2000
================================================================================
5. CAPITAL STOCK (cont'd...)
COMMON STOCK (cont'd...)
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 current year, 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.
6. 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.
<PAGE> 21
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 29, 2000
================================================================================
6. STOCK BASED COMPENSATION EXPENSE (cont'd.....)
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, 1998 and 1999 -- $ --
Granted 84,504 $0.50
Forfeited -- $ --
Exercised -- $ --
------
Outstanding at February 29, 2000 84,504 $0.50
===============================================================================================================
</TABLE>
The weighted average fair value of options granted to non-employees
during the current year is approximately $4.56 per share.
Following is a summary of the status of options outstanding at February
29, 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 current period 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.
<PAGE> 22
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 29, 2000
================================================================================
6. STOCK BASED COMPENSATION EXPENSE (cont'd.....)
COMPENSATION (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>
==================================================================================================================
February 29, February 28,
2000 1999
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Risk-free interest rate 7.00% --
Expected life of the options 2 years --
Expected volatility 194% --
Expected dividend yield -- --
==================================================================================================================
</TABLE>
7. RELATED PARTY TRANSACTIONS
During the year ended February 29, 2000, the Company entered into the
following transactions with related parties:
a) Paid management fees of $31,030 (1999 - $Nil) to a company
controlled by a director of the Company.
b) Paid or accrued management fees of $Nil (1999 - $84,455) to a
former director or a company controlled by the former director of
the Company.
c) Paid consulting fees of $685 (1999 - $5,016) to a former director of
the Company.
8. SUPPLEMENTAL DISCLOSURE FOR NON-CASH OPERATING, FINANCING AND INVESTING
ACTIVITIES
There were no significant non-cash transactions for the year ended
February 29, 2000.
Significant non-cash transactions for the year ended February 28, 1999
included:
a) The Company issuing 12,000 shares of common stock in the amount of
$21,182 as consideration for the acquisition of resource properties.
b) The Company issuing 16,000 shares of common stock in the amount of
$130,000 as part consideration for the acquisition of resource
properties.
<PAGE> 23
BULLET ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Anglo-Sierra Resources Corp.)
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FEBRUARY 29, 2000
================================================================================
9. INCOME TAXES
The Company's total deferred tax asset is as follows:
<TABLE>
<CAPTION>
==================================================================================================================
February 29, February 28,
2000 1999
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Tax benefit of net operating loss carryforward $ 436,500 $ 46,340
Valuation allowance (436,500) (46,340)
--------- --------
$ -- $ --
==================================================================================================================
</TABLE>
The Company has a net operating loss carryforward of approximately
$970,000 (1999 - $316,000). The valuation allowance increased to
$436,500 from $46,340 during the period ended February 29, 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
--------
$970,000
========
</TABLE>
10. ACCUMULATED COMPREHENSIVE OTHER INCOME
Total comprehensive loss for the year ended February 29, 2000, and the
year ended February 28, 1999 is $(1,041,199) and $(311,332),
respectively. The only item included in other comprehensive income is
foreign currency translation adjustments in the amounts of $(1,102) for
the year ended February 29, 2000 and $3,604 for the year ended February
28, 1999.
<TABLE>
<CAPTION>
===================================================================================================================
Foreign
Currency Accumulated
Translation Comprehensive
Adjustment Other 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
Current period change (1,102) (1,102)
------- -------
Ending balance, February 29, 2000 $ 2,502 $ 2,502
===================================================================================================================
</TABLE>
