<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 2
TO
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA n/a
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
30 Wertheim Court
Suite 24, 2nd Floor
Richmond Hill, Ontario
L4B 1B9 Canada
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
(905) 763-3799
(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12 (b) OF THE ACT:
NONE
SECURITIES TO BE REGISTERED UNDER SECTION 12 (g) OF THE ACT:
COMMON STOCK, $0.001 PAR VALUE
(TITLE OF CLASS)
This Registration Statement contains forward-looking statements which involve
risks and uncertainties. When used in this Registration Statement, the words
"believe", "anticipate", "expects" and similar expressions are intended to
identify such forward-looking statements. The Company's actual results may
differ significantly from the results discussed in the forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
<PAGE>
ITEM 1 - BUSINESS
THE COMPANY
GENERAL. Environmental Solutions Worldwide, Inc. was formed in 1987
under the name BBC Stock Market, Inc. as a "blank check" or development stage
company for the purpose of seeking to acquire viable businesses. Through
January, 1999, the Company was not engaged in any business. In February
1999, the Company acquired all the issued and outstanding shares of BBL
Technologies Inc., a private company incorporated in Ontario, Canada ("BBL"),
and changed its name to Environmental Solutions Worldwide, Inc. BBL is the
owner of a Canadian patent covering catalytic converter technology for
automotive and non-automotive uses. BBL also has patents pending on spark
plug/fuel injector technology for automotive use. For purposes hereof,
references to the "Company" shall be deemed to be references to Environmental
Solutions Worldwide, Inc., and BBL, its wholly-owned subsidiary.
The Company's catalytic converter technology is under development.
The technology involves the manufacture of catalytic converters without the
use of precious metals, thus reducing the cost of the converter. The Company
also believes that catalytic converters produced with its technology will (i)
operate with fuels in addition to those with which current catalytic
converters operate, and (ii) have a longer life than existing catalytic
converters. A prototype has been produced, and has been subjected to
preliminary testing. The Company is now in the process of establishing a
small manufacturing operation to begin producing additional prototypes for
further testing and refinement.
The Company's spark plug/fuel injector technology is in the concept
stage. There are U.S. and Canadian patent applications pending on the
technology, but the Company has not yet constructed prototypes or conducted
testing. The spark plug/fuel injector technology is a mechanism combining the
functions of a spark plug and a fuel injector in a single device. The primary
advantage of that technology is that the Company believes that combining the
devices will produce greater fuel efficiencies, since the devices are
synchronized, but that belief has not been confirmed by tests. A disadvantage
of the technology is that the combined device will likely cost significantly
more than either current spark plugs or fuel injectors (but is likely to be
less expensive than both devices combined).
The Company believes that its current cash resources will be
sufficient to fund its operations through the end of 1999, and will be
insufficient to fully develop its technology and sustain the Company until
its operating cash flow is positive. The Company presently expects to raise
between one and two million dollars (before fees and expenses) through a
private placement of its common stock (the "Private Placement"), and
anticipates the Private Placement will be effected prior to the end of 1999.
The Company believes that, if the Private Placement is successful, the
proceeds of the offering is likely to be sufficient to sustain the Company's
operating expenses through the end of 2000, and that the Company will have
developed its catalytic converter technology to the point of commercial
viability prior to the end of 2000. However, there is no assurance that the
Private Placement will be successful, or that the Company will not deplete
its current cash resources prior to the date the proceeds of the Private
Placement, or any other financing, become available. Furthermore, there is no
assurance that the Private Placement, if successful, will provide sufficient
funds to sustain the Company until its cash flow is positive, and therefore
the Company may be required to seek additional external financing, which may
include the issuance of additional debt or equity securities.
THE ANTICIPATED BUSINESS OF THE COMPANY. Although the technology
underlying catalytic converters has improved significantly since its
inception in the 1950's, their effectiveness in reducing toxic emissions from
internal combustion engines remains limited. There are many variables that
negatively affect performance of a catalytic converter including temperature,
various chemical compounds in the fuel, and the age of the converter.
Existing converters also contain expensive "rare earth" metals such as
platinum, palladium and rhodium, making them expensive to manufacture and
subject to price volatility.
The Company holds a Canadian patent covering its catalytic converter
technology. However, there can be no assurance that this patent, combined
with any patents or trade secret protection we may seek in the future, would
survive any legal challenge, or provide meaningful levels of protection for
the Company's technology. In addition, the Canadian patent only affords
protection against the manufacture, use or sale of the patented technology
within Canada; the Company is in the process of preparing patent applications
to protect its technology within the United States and other countries.
The Company believes that its technology will permit the manufacture
of catalytic converters less expensively than current technologies, since it
requires no precious metals in the manufacturing process. In addition, the
Company believes that catalytic converters produced with its technology will
(i) operate with fuels in addition to those with which current catalytic
converters operate; and (ii) have a longer life than existing catalytic
converters. Those beliefs are based upon (i) internal testing in which the
prototype catalytic converter performed satisfactorily with a engine using
diesel fuel; and (ii) the longevity of the prototype catalytic converter in
the testing process.
The Company believes that it has satisfactorily completed the first
stage of its research and development stage, comprised of initial feasibility
testing of its prototype catalytic converter. The Company's prototype
catalytic converter technology was compared to both baseline emissions and to
a new conventional catalytic converter for nitrogen oxide, carbon dioxide,
and hydrocarbons reductions. The results for the Company's prototype and the
conventional catalytic converter are discussed in detail below under the
heading "The Company's Technology." The Company is now engaged in the second
phase, which will entail setting up a small manufacturing operation to
produce additional prototypes for further testing and refinement. The Company
is in the process of negotiations for the acquisition of manufacturing
facilities and equipment in Toronto, and expects to begin the manufacture of
additional prototype catalytic converters in January 2000.
The initial business plan will focus on the North American market,
due to its proximity and size. The Company expects to initially produce
catalytic converters for automobiles using unleaded and diesel fuels, with
additional applications, including leaded fuels, to follow.
The Company's present plan of operations for the next twelve months
calls for the following estimated expenditures:
Staff Costs $ 435,000
Plant and Equipment 819,000
Office and General 204,000
Professional Fees and
Marketing 252,000
----------
$1,710,000
Expenses for staff costs include salaries and benefits for the
Company's technical director, his assistants, officers of the Company and
other personnel. Plant and equipment costs include the cost of a mixer, an
extruder, a laboratory extruder, dies, cut off equipment, electronic drier,
furnace, testing costs, raw materials, casings, plant space rental,
consulting fees and other costs. Office and general costs include general
office costs, equipment, insurance and travel. Professional fees and
marketing include patent, SEC and general legal fees, accounting fees, and
marketing expenses.
The catalytic converter technology is expected to reach the point of
commercial viability by the end of 2000. Once commercial viability has been
achieved, the Company intends to seek to partner with one or more major
automobile component manufacturers to produce and sell catalytic converters
incorporating the Company's technology.
The Company presently has four employees, and Company's staffing
plan anticipates the expansion of the Company's staff to seven employees in
the near future.
THE EXISTING TECHNOLOGY. The catalytic converter was originally
developed in the late 1950's as a device to reduce the level of toxic
emissions in automobile exhausts, including hydrocarbons ("HC"), nitrogen
oxides ("NOx") and carbon dioxide ("CO"). Over time, the catalytic converter
has become standard equipment on vehicles sold in the North American
marketplace. The introduction of catalytic converters in Europe began in
1993. There has been substantial resistance in the used car and retrofit
markets, based upon price.
To date, catalytic converters have generally used nonprecious metals
and precious metals supported on pellets or monoliths of ceramic, usually
known as "cakes" or "honeycombs". The honeycomb effect provides a larger
surface area for contact with the various molecules of the engine exhaust
gases. The most significant toxic emissions from a combustion engine are HC,
CO and NOx.
There are two types of converters presently used in automotive
application; namely, "Oxidation" and "Three Way". Oxidation converters remove
CO and HC, leaving NOx unchanged. For Oxidation converters, air is pumped
into the engine exhaust upstream of the catalyst to ensure the presence of
O2. Platinum and palladium are primarily used as reactants. Three Way
converters remove all three components simultaneously. A chemically correct
environment is required, where the engine is operated very close to optimal
fuel-air ratio at all times. Feedback controls must be in place to ensure
that oxidizing or reducing atmospheres do not form in the exhaust. Platinum,
palladium and rhodium combined with non-precious metals are used. No sulfur,
lead or ammonia may be present in the fuel, since lead and sulfur poison the
converter. High temperature is also a detriment that can be caused by engine
misfiring. The present converters are generally ineffective at cold start-up
temperature (most pollutants are discharged while the engine is warming up
during the first 5-10 minutes of vehicle operation) and are limited in their
useful life span. Current catalytic converters operate only on unleaded
fuels, not diesel or leaded fuels.
THE COMPANY'S TECHNOLOGY. The Company's technology uses raw materials
that are a combination of metals and non-metallic compounds, without precious
metals. The Company believes that this technology will permit the manufacture of
catalytic converters which (i) cost significantly less to produce, (ii) work on
leaded, unleaded and diesel fuels, rather than only unleaded fuel, and (iii)
will not be readily contaminated, and will therefore maintain their efficiency
in extended vehicle operation.
1
<PAGE>
The Company recently conducted testing of its prototype and a new
conventional catalytic converter (an "OEM Converter") in an independent emission
testing lab based in Chicago, Illinois recognized by the EPA. The results for
the tests are shown below.
<TABLE>
<CAPTION>
Without Using the Using
Converter Company's OEM
(BASELINE)(1) CONVERTER(1) CONVERTER
----------- ---------- ---------
<S> <C> <C> <C>
NOx 3.62 0.14 0.14
CO 23.79 5.84 5.46
HC 2.27 1.12 0.43
MPG 19.35 20.47 20.36
</TABLE>
(1)FTP weighted grams per mile
NOx = Nitrogen Oxides
CO = Carbon Monoxide
HC = Hydrocarbons MPG = Miles per Gallon
While the test results show average NOx emissions as comparable between
the Company's converter and the OEM, or conventional, catalytic converter, and
average HC emissions as higher with the Company's converter than with the OEM
converter, the tests were comprised of three runs, and in each case the results
for the Company's converter showed a trend toward increased efficiency over
time, while the OEM converter showed a trend toward decreased efficiency, as
follows:
<TABLE>
<CAPTION>
NOx
COMPANY CONVERTER OEM CONVERTER
----------------- -------------
<S> <C> <C>
Run 1 0.175 0.128
Run 2 0.138 0.158
Run 3 0.121 0.156
<CAPTION> HC COMPANY CONVERTER
OEM CONVERTER ----------------- -------------<S>
<C> <C>Run 1 1.790 0.418
Run 2 1.082 0.449 Run 3 0.481
0.438
</TABLE>
Further, the OEM converter used in the testing was new, while the
prototype used had already been run for a substantial period of time. The
Company believes that the use of precious metals in conventional converter
manufacturing may result in those metals becoming contaminated over time,
leading to lower levels of efficiency in reducing NOx and HC emissions. An
EPA study published in the spring of 1998 showed that NOx comprises about
7.2 percent of all greenhouse gases, with cars equipped with catalytic
converters producing nearly half of that NOx. Since the Company's technology
does not utilize precious metals, the Company's converter technology may be
more effective in reducing total NOx and/or HC emissions by providing greater
efficiency over time. However, the Company cannot predict whether such
beliefs will be confirmed or disproved by further testing. The possibility
that the Company's converter may have no advantage over existing converter
technology, or may be less efficient than existing technology, in reducing
some or all noxious emissions may limit the market acceptance of the
Company's technology, and adversely affect the Company's ability to
successfully exploit the technology.
In July, 1999, the Company released a press release stating, in
part, that the Company believed that its technology was the only catalytic
converter technology in the world that reduces NOx. That press release was
predicated on preliminary testing that showed a significant reduction in NOx
emissions over a baseline, and was not supported by the independent testing
described above.
The Company's tests have heretofore been limited, and there can be
no assurance that further testing and limited production may not reveal
problems with the technology. At this time, the Company is aware that the
testing has shown that the converter may create increased back pressure in
exhaust systems, which may require reengineering of the converter, and result
in additional costs and delays in the introduction of the Company's
technology.
The primary raw materials used in the manufacture of the Company's
converters include molybdenum, copper, nickel and ceramics, all of which are
generally available in the marketplace. The Company does not anticipate any
material shortage of any raw material in the foreseeable future.
THE MARKET. The automotive/combustion engine marketplace itself is
vast, including automobiles, trucks, outboard marine vehicles, specialty
vehicles and equipment. There are currently 700 million automobiles and 250
million trucks on the road worldwide. Currently there are 40 million new
vehicles and 10 million new trucks being produced each year. The Company
intends to focus its efforts specifically on the North American market in the
first three years of operation. The North American market represents 30% of
the world market (200 million vehicles on the road) with an additional 12
million new vehicles produced each year.
The manufacture of "honeycombs" or "cakes," which act as the filter
of pollution in the catalytic converter, is dominated by two companies: (i)
Corning Glass ("Corning"), which currently holds 70% of the world market, and
NGK of Japan ("NGK") with the remaining 30% of the market. Corning has
licensed NGK to produce the "cakes", using the same equipment and formulas as
Corning. The Company expects to manufacture its cakes utilizing the same
extrusion technology currently utilized by Corning and NGK, but extruding its
own proprietary formulas, which the Company currently possesses. The Company
will not be required to secure a license from Corning in connection with such
manufacturing.
COMPETITION. Direct competition for the Company are other companies
involved in the manufacturing process of the existing catalytic converter,
including Corning and NGK. Corning and NGK are the presently the only two
manufacturers of "cakes" for the catalytic converter.
The Company will also face indirect competition in the form of
alternative fuel consumption vehicles, such as those using methanol,
hydrogen, ethanol and electricity. Currently, those technologies have
shortcomings in range of operation, reliability, and availability of the
technology and fuels at reasonable price points. The Company believes that
alternative power will not rival the internal combustion engine in the near
to medium-term future. In addition, the Company believes that it may face
resistance in customer acceptance of a new technology, particularly since
conventional converters have been the norm in the industry for the last 30
years. The Company will also be required to overcome long-standing
contractual and other obligations and relationships between catalytic
converter suppliers and the large automotive manufacturers.
PRICING. A finished catalytic converter currently sells to U.S. auto
manufacturers for approximately $85. A finished exhaust pipe, with converter
and muffler, currently sells to the U.S. auto manufacturers for about $250.
In Europe, the finished exhaust pipe, with converter and muffler, sells to
auto manufacturers for $500 to $700. The Company's current business plan
provides for a sales price for a finished catalytic converter of
approximately $70.
ITEM 2 - FINANCIAL INFORMATION
2
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth certain financial data for, and as of
the end of, the five years ended December 31, 1994, 1995, 1996, 1997 and
1998, and for the six month period ending June 30, 1999:
<TABLE>
<CAPTION>
Six
months Year Year Year Year Year
ended ended ended ended ended ended
June 30, Dec. 31, Dec. 31, Dec. 31., Dec. 31, Dec. 31,
1999 1998 1997 1996 1995 1994
-------------------------------------------------------------
<S> <C> <C>
Results of Operation
Total Revenue -- -- -- -- -- --
Net Operating Expenses 451,216 151,939 -- -- -- --
-------------------------------------------------------------
Net earnings (loss) (451,216) (151,939) -- -- -- --
-------------------------------------------------------------
-------------------------------------------------------------
Net earning per loss
per common share (0.02) (0.15) -- -- -- --
-------------------------------------------------------------
-------------------------------------------------------------
Balance Sheets
Total current assets 379,901
Long term assets 2,327
Current liabilities 179,806 151,939 -- -- -- --
Long term liabilities -- -- -- -- -- --
Shareholders' equity (deficiency) 202,422 (151,939) -- -- -- --
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION & RESULTS OF
OPERATIONS
GENERAL
The Company is a development stage company. Prior to January 1999, the Company
had no material operations, and there are no accordingly no meaningful
comparisons with operating results from prior periods.
THE BBL ACQUISITION
On January 29, 1999, the Company acquired 100% of the common shares of BBL
Technologies, Inc., an Ontario, Canada corporation, by issuing 11,048,000
common shares. BBL holds the Canadian patent to the Company's catalytic
converter technology. The Company acquired BBL in order to develop the
technology into a commercial product.
The Company owns the only shares with voting and participating rights in BBL.
The original holder of the patented technology, Next Catalytic Converter
Corporation ("NCCC"), an Ontario, Canada corporation, which is related to BBL
due to common shareholders, transferred the technology to BBL on December 14,
1998 in return for 700,000 special shares with a fixed value of $453,900
which are non-voting, non-participating and are redeemable only at the
discretion of BBL. For accounting purposes, no value is attributed to those
shares.
The acquisition has been accounted for by using the purchase method of
accounting. In determining the value of the purchase of BBL, it is
appropriate to use the quoted market price of the shares of the Company at
the time of acquisition if the shares reflected the fair value of the
Company. As the Company was a "shell company" at the time of acquisition, the
fair value of the Company was nominal and thus the use of the market value of
the shares of the Company in determining the purchase price would not be
appropriate. As a result, the purchase price was determined based upon the
fair value of the net assets of BBL, comprised of the patented technology.
Since the technology was acquired in a non-arm's length transaction between
BBL and NCCC, the original cost of the patented technology, as determined by
NCCC, of $2,321, is deemed to be the acquisition price.
The Company's business plan calls for expenditures of approximately $1.7
million over the next twelve months, and the catalytic converter technology
is expected to reach the point of commercial viability on or prior to the end
of that period.
From inception through June 30, 1999, the Company expended approximately
$212,000 in professional fees and expenses. Those fees included legal fees
(including general corporate, securities and intellectual property counsel);
audit fees; consulting fees (including the services of Teodosio V. Pangia and
Dr. Liber). From inception through June 30, 1999, the Company expended
approximately $373,000 in development costs, which costs included development
and production of the prototype catalytic converter, general research, and
testing.
LIQUIDITY AND CAPITAL RESOURCES
SIX MONTHS ENDED JUNE 30, 1999
3
<PAGE>
During the six month period ended June 30, 1999, the Company's cash and cash
equivalents increased by $379,901, comprised of an increase of $653,250 from the
issuance of common shares and an increase in loans payable of $18,567, offset by
cash utilized in operating activities of $291,916.
The Company has no present source of revenue, and does not anticipate
generating any revenues until the catalytic converter technology is developed
to the point of commercial viability. The Company believes that this
commercial viability will occur on or before the end of 2000, but there is no
assurance that such commercial viability will not be delayed, or that such
commercial viability will ever be attained. Accordingly, the successful
completion of the Private Placement and/or other financing will be essential
for the Company to continue in operation until such time as the Company will
be able to generate revenue.
The Company believes that its current cash resources will be sufficient to
fund its operations through the end of 1999, and will be insufficient to
fully develop its technology and sustain the Company until its operating cash
flow is positive. The Company presently expects to raise between one and two
million dollars (before fees and expenses) through the Private Placement, and
anticipates the Private Placement will be effected prior to the end of 1999.
The Company believes that, if the Private Placement is successful, the
proceeds of the offering are likely to be sufficient to sustain the Company's
operating expenses through the end of 2000. However, there is no assurance
that the Private Placement will be successful, or that the Company will not
deplete its current cash resources prior to the date the proceeds of the
Private Placement, or any other financing, become available. Furthermore,
there is no assurance that the Private Placement, if successful, will provide
sufficient funds to sustain the Company until its cash flow is positive, and
therefore the Company may be required to seek additional external financing,
which may include the issuance of additional debt or equity securities.
If the Company is unable to secure the required financing, it may be forced
to take steps to curtail its expenses, such as reducing its staff or its
research and development efforts. Any such action, however, may result in an
inability to develop the catalytic converter technology to the point of
commercial viability. In such event, the Company may be forced to cease
operations.
YEAR 2000
The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any computer program that
is not year 2000 compliant and has date sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000.
The computer hardware and software being utilized by the Company is largely
"off-the-shelf" technology, of a word processing, data base or scientific
research nature. The Company believes that all such hardware and software is
year 2000 compliant, based on information made publicly available by the
manufacturers of such hardware and software. The Company's operations are
presently limited to research and development, and manufacturing of catalytic
converter prototypes is not expected to begin until January 2000. That
manufacturing operation will be of limited scope, and will require only small
amounts of raw materials and finished products from third party suppliers.
The nature of the raw materials and finished products required for such
manufacturing operation is such that they are available from multiple
sources, and the Company believes that a Year 2000-related failure by third
parties will result in, at worst, delays. Under these circumstances, the
Company has determined that further Year 2000 compliance investigations with
regard to its anticipated suppliers are not warranted.
ITEM 3 - DESCRIPTION OF PROPERTY
The Company does not presently lease or own any real property. Office
services, including telephone reception, mail, and office space, are provided
by Zoya Financial, the Company's public relations agency, and the Company
anticipates securing its own office space shortly.
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 15, 1999, the ownership of the
Company's Common Stock by (i) each director of the Company, (ii) all
executive officers and directors of the Company as a group, and (iii) all
persons known by the Company to own more than 5% of the Company's Common
Stock.
BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
Number of
Name and Address (1) Common Shares % (2)
- -------------------- ------------- --
<S> <C> <C>
Bengt George Odner (3) 650,000 *
Jervaulx Hall
Jervaulx, North Yorkshire
United Kingdom HG4 4PH
Adam Michael Oliver - -
Dr. Bruno Liber 5,000,000 17.9%
#804-165 LaRose Avenue
Etoicoke, Ontario
Canada
Teodosio V. Pangia (4) 3,170,975 11.3%
All Directors and Officers
as a group (2 persons) 650,000 *
</TABLE>
*Less than 5% of the outstanding shares of Common Stock.
4
<PAGE>
(1) All addresses are c/o the Company, at 30 Wertheim Court, Suite 24, 2nd
Floor, Richmond Hill, Ontario, Canada unless otherwise noted.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities & Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Common Stock subject to options or
warrants currently exercisable or convertible, or exercisable or convertible
within 60 days of October 15, 1999, are deemed outstanding for computing the
percentage of the person holding such option or warrant but are not deemed
outstanding for computing the percentage of any other person. Except as
indicated in the footnotes to this table and pursuant to applicable community
property laws, the persons named in the table have sole voting and investment
power with respect to all shares of Common Stock beneficially owned.
(3) The shares listed as beneficially owned by Mr. Odner include 400,000 shares
held by Crystal Fund Ltd., a Bermuda mutual fund, of which Mr. Odner is a
director.
(4) The shares beneficially owned by Mr. Pangia are held of record by Tyler
Dylan Corp., an Ontario corporation in which Mr. Pangia is the sole stockholder.
ITEM 5 - DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS; OFFICERS AND SIGNIFICANT STOCKHOLDERS
Bengt George Odner is the Chief Executive Officer of the Company. He was
appointed Chief Executive Officer by the Company's sole director in August,
1999. Mr. Odner has been a director of Crystal Fund Ltd., a Bermuda mutual
fund, and a director of Crystal Fund Managers, Ltd. since 1996. From 1990
through 1995, Mr. Odner was the Chairman of Altus Nord AB, a property holding
company specializing in Scandinavian properties and a wholly-owned subsidiary
of Credit Lyonais Bank Paris. As of August 30, 1999, Mr. Odner was 46 years
old.
Adam Michael Oliver is President and the sole director of the Company. Mr.
Oliver was elected director by the written consent of the majority
shareholder of the Company in October, 1998 and became President of the
Company in October, 1998. For more than the past five years, Mr. Oliver has
been a Barrister and Soliciter with the firm of White, Coach, Kapusts &
Oliver, a law firm specializing in real estate, corporate, commercial and
estate law. Mr. Oliver is also the sole director and President of BBL, the
Company's wholly-owned subsidiary. As of August 30, 1999, Mr. Oliver was 45
years old.
Dr. Bruno Benjamin Liber has been the technical director for the Company
since January, 1999. He is the inventor of the catalytic converter technology
that forms the basis for the Company's anticipated business. From 1997
through 1999, Dr. Liber was a technical director for Next Catalytic Converter
Corporation, and previous to that Dr. Liber was an independent inventor. As
of August 30, 1999, Mr. Liber was 77 years old.
Mr. Teodosio V. Pangia is the principal of TVP Consulting Services, which has
provided consulting services to the Company since November, 1997. Those
consulting services consisted of meetings with suppliers and vendors to
coordinate the production of the Company's prototype and proposed
manufacturing activities; overseeing testing activities; meetings and
discussions with the Company's potential business partners; and acting as
liaison between investors and the Company. From 1994 through 1997, Mr. Pangia
was director and Chief Executive Officer of Ecology Pure Air International, a
Canadian company engaged in the business of developing an automobile fuel
catalyst. In 1997, a petition in bankruptcy was brought against Mr. Pangia in
the Ontario Court of Justice. That petition, and a related order, were
dismissed. As of August 30, 1999, Mr. Pangia was 40 years old.
ITEM 6 - COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Mr. Oliver, the President of the Company, received a total of $4,100 in
compensation for his services to the Company during the six months ended June
30, 1999. Mr. Oliver currently serves without compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Name Year Salary Bonus Other Stock Awards Other
Compensation Compensation
<S> <C> <C> <C> <C> <C> <C>
Adam Michael 1999 0 0 4,100 None 0
Oliver
</TABLE>
5
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
There were no grants of options or other rights to acquire stock to employees of
the Company in the past fiscal year.
EMPLOYMENT AGREEMENTS
The Company does not presently have formal employment agreements with any
employees or officers.
COMPENSATION OF DIRECTORS
The Company does not presently compensate its sole director for his attendance
at meetings of the Board of Directors.
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AGREEMENTS WITH AFFILIATED PARTIES
In June, 1999, the Company paid consulting fees of approximately $64,000 to
TVP Consulting Services, a company in which Teodosio Pangia, a beneficial
owner of approximately 11.3% of the Company's stock, is the principal.
ITEM 8 - LEGAL PROCEEDINGS
None
ITEM 9 - MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS' COMMON EQUITY AND
RELATED MATTERS
The Company's Common Stock was been quoted on the Over-the-Counter
Bulletin Board ("OTCBB") through January, 1999 under the symbol "BBSM", and
since January, 1999 has been quoted under the symbol "ESWW."
In January, 1999, the National Association of Securities Dealers, Inc.
("NASD") amended NASD Rule 6530 and 6540 to limit quotations on the OTCBB to the
securities of issuers that report their current financial information to the
Securities and Exchange Commission, or to banking or insurance regulators. The
Company is required to become compliant with such amended rules no later than
September 2, 1999 (after taking into effect the benefit of a thirty-day grace
period pursuant to the NASD Rule 6530 and 6540 amendments). The Company did
not become so compliant by such date, and trading of the Common Stock of the
Company will be limited to the so-called "pink sheets," until such time as
the Company can again qualify for trading on the OTCBB. It therefore may be
more difficult to dispose of or to obtain accurate price quotations on the
Common Stock. In August, 1999, the Company's symbol was changed to "ESWEE" as
a result of the Company's failure to become compliant with the amendments to
NASD Rule 6530 and 6540.
The following table sets forth the high and low bid prices for the
Common Stock for the quarters indicated, as reported by the Bloomberg
Reporting Service. Such market quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not necessarily represent
actual transactions:
<TABLE>
<CAPTION>
March 31, 1999 June 30, 1999 September 30, 1999
-------------- ------------- ------------------
<S> <C> <C> <C>
High 4.5625 3.0 4.875
Low 0.85 0.5625 1.25
</TABLE>
At June 30, 1999, there were approximately 50 holders of record of the Common
Stock.
6
<PAGE>
SHARES ELIGIBLE FOR SALE
Sales in the market of substantial amounts of currently outstanding Common Stock
could have an adverse effect on the price of the Common Stock. As of August 30,
1999 16,154,542 shares of Common Stock are freely trading shares, with the
remainder of 11,847,996 shares of Common Stock currently subject to restrictions
as to their resale.
DIVIDENDS
The Company anticipates that for the foreseeable future, earnings will be
retained for the development of its business. Accordingly, the Company does not
anticipate paying dividends on the Common Stock in the foreseeable future. The
payment of future dividends will be at the sole discretion of the Company's
Board of Directors and will depend upon, among other things, future earnings,
capital requirements, the general financial condition of the Company and general
business conditions.
ITEM 10 - RECENT SALES OF UNREGISTERED SECURITIES
In January, 1999, the Company issued 15,000,000 shares of Common
Stock in settlement of indebtedness of $150,000. The shares were issued in
reliance on Rule 504 of the Securities Act, which provides an exemption from
registration under the Securities Act for certain limited offering and sales
of securities.
In January 1999, the Company issued 11,048,000 shares to Canadian
residents in connection with the acquisition of the stock of BBL in a
transaction not subject to the registration requirements of the Securities
Act. At the time of the acquisition of BBL, there were no relationships
between the Company and BBL, other than was that an officer and director of
BBL was providing legal services to the Company. Dr. Bruno Liber, the
original holder of the catalytic converter technology, was a significant
stockholder in BBL.
In April, 1999, the Company issued 954,538 shares of Common Stock
for gross proceeds of $790,000 in cash. The shares were sold in reliance on
Rule 504 of the Securities Act, which provides an exemption from registration
under the Securities Act for certain limited offering and sales of securities.
ITEM 11 - DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The Company has authorized for issuance 50,000,000 shares of common stock, par
value $0.001 per share. Each holder of Common Stock is entitled to one vote for
each share held of record on all matters submitted to a vote of the
stockholders. The quorum for any meeting of shareholders is the presence, in
person or by proxy, of the holders of at least one-third of the outstanding
shares. In all matters other than the election of directors, when a quorum is
present at any stockholders' meeting, the affirmative vote of 50.01% of the
outstanding shares is required to approve any action of shareholders. Directors
are elected by a plurality of the votes of the shares present in person or
represented by proxy at a stockholders' meeting. The Board of Directors of the
Company currently consists of one member, and the By-Laws of the Company provide
that the Board shall consist of no fewer than one but no more than seven
members. The holders of Common Stock are not entitled to cumulative voting
rights with respect to the election of directors, and, as a consequence,
minority stockholders will not be able to elect directors on the basis of their
votes alone. Holders of Common Stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors out of funds legally
available therefor.
In the event of a liquidation, dissolution or winding up of the Company, holders
of the Common Stock would be entitled to share ratably in all assets remaining
after payment of liabilities and the satisfaction of any liquidation preference
of any then outstanding series of preferred stock. Holders of Common Stock have
no preemptive rights and no right to convert their Common Stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are fully paid and
nonassessable.
As of August 30, 1999, there were 28,002,538 shares of Common Stock
outstanding held of record by approximately 50 stockholders. The Company has
granted an option to purchase 90,000 shares of Common Stock at a price of
$2.00 per share, expiring December 31, 2000, and an option to purchase 15,000
shares at $2.00 per share, expiring June 21, 2000, to two public relations
firms. There are warrants outstanding to purchase 122,500 shares of Common
Stock at prices from $2.50 to $3.00 per share, which expire five years from
the date of issue.
7
<PAGE>
TRANSFER AGENT
The Transfer Agent and Registrar for the Company's Common Stock is Interwest
Transfer Co., Inc.
ITEM 12 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
In accordance with the Florida Corporation Act (the "Act"), the Company's
Articles of Incorporation (the "Articles") contain provisions which state that,
to the fullest extent permitted by law, no director or officer shall be
personally liable to the Company or its shareholders for damages for breach of
any duty owned to the Corporation or its shareholders. The Company also has the
power, by a by-law provision or a resolution of its stockholders or directors,
to indemnify the officers and directors against any contingency or peril as may
be determined to be in the Company's best interests and in connection therewith
to secure policies of insurance.
ITEM 13 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information with respect to Item 13 is contained in the Company's financial
statements and is set forth herein beginning on page F-1.
ITEM 14 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL MATTERS
There have been no disagreements with the Company's independent
accountants on accounting and financial matters within the three year period
ended December 31, 1998, or in any period subsequent to that date.
In 1998, the Board of Directors determined to engage a new audit
firm. The former auditor, James E. Scheifley & Associates, P.C., did not
issue a report within the last two years containing an adverse or qualified
opinion. There were no disagreements between the former auditor and Daren,
Martenfeld, Carr, Testa and Company LLP, the Company's current auditors.
ITEM 15 - FINANCIAL STATEMENTS AND EXHIBITS
a. Each of the following items are contained in the Company's financial
statements and are set forth herein beginning on page F-1.
(i) Auditor's Report of Daren, Martenfeld, Carr, Testa and Company LLP,
Chartered Accountants
(ii) Balance Sheet as of December 31, 1998 and December 31, 1997
(iii) Statement of Operations for the years ended December 31, 1998, 1997,
1996 and 1995, and for the period October 15, 1987 (inception) to December
31, 1998
(iv) Statement of Changes in Shareholders' Deficiency from inception
through December 31, 1998
(v) Statement of Cash Flows for the years ended December 31, 1998, 1997,
1996 and 1995, and for the period October 15, 1987 (inception) to December
31, 1998
(vi) Notes to Financial Statements
(vii) Consolidated Balance Sheet as at June 30, 1999 and December 31, 1998
(unaudited)
(viii) Consolidated Statement of Operations for the six month period ended
June 30, 1999, and for the year ended December 31, 1998, and for the period
from October 15, 1987 (inception) to June 30, 1999 (unaudited)
(ix) Consolidated Statement of Changes in Shareholders' Deficiency from
inception through June 30, 1999 (unaudited)
(x) Consolidated Statement of Cash Flows for the six month period ended June
30, 1999, and for the year ended December 31, 1998, and for the period
from October 15, 1987 (inception) to June 30, 1999 (unaudited)
(xi) Notes to Financial Statements
(xii) Report of James C. Scheifly & Associates, P.C. dated August 19, 1998
8
<PAGE>
(xi) Balance sheet as of August 3, 1998, December 31, 1997 and December 31,
1996.
(xii) Statements of Operation for periods ended August 31, 1998, December 31,
1997, December 31, 1996 and inception through August 3, 1998
(xiii) Statement of Changes in Stockholders' Equity for the period from
inception to August 3, 1998
(ix) Statement of Cash Flows for the periods ended August 3, 1998, December
31, 1997, December 31, 1996 and inception through August 3, 1998
(x) Notes to Financial Statements
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
b. Exhibits
3.1 Articles of Incorporation of the Company, as amended*
3.2 By-laws of the Company*
4.1 Warrant Certificate*
10.1 Agreement dated January 29, 1999 by and between the shareholders of BBL
Technologies Inc.. and the Company*
10.2 Consulting Agreement dated March 31, 1999 by and between May Davis Group
and the Company*
10.3 Commission Agreement dated March 31, 1999 by and between May Davis Group
and the Company*
10.4 Option Agreement dated June 21, 1999, between David Coates o/a Fifth
Business and the Company*
10.5 Option Agreement dated June 21, 1999, between Zoya Financial Corp. and the
Company*
21.1 List of Subsidiaries*
Financial Data Schedule
* previously filed
9
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: October 22, 1999
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
By: /s/ Bengt Odner
-------------------------------
Bengt Odner
Chief Executive Officer
10
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
(U.S. DOLLARS)
FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1998
<PAGE>
DAREN, MARTENFELD, CARR, TESTA AND COMPANY LLP
CHARTERED ACCOUNTANTS
20 Eglinton Avenue West Telephone: 416-480-0160
Suite 2100 Facsimile: 416-480-2646
Toronto, Ontario
M4R 1K8
AUDITORS' REPORT
To the Shareholders' and Board of Directors of BBC Stock Market, Inc.
(A Development Stage Company)
We have audited the balance sheet of BBC STOCK MARKET, INC. (a development stage
company) as at DECEMBER 31, 1998 and the statement of operations, cash flows and
changes in shareholders' deficiency for the year ended December 31, 1998. 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 audit. The financial statements of BBC Stock Market, Inc. (a development
stage company) from inception (October 15, 1987) to December 31, 1997 were
audited by another auditor whose report which expressed a going concern as
described below issued an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance 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 significant estimates made by management, as well
as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of BBC Stock Market, Inc. (a development stage
company) as at December 31, 1998 and the results of its operations, cash flows
and changes in shareholders' deficiency for the period August 4, 1998 to
December 31, 1998 in accordance with generally accepted accounting principles in
the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue, which raise substantial doubts about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
DAREN, MARTENFELD, CARR, TESTA AND COMPANY LLP
Toronto, Ontario
August 16, 1999
A Member Firm of 1.
Midsnell International
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 151,939 $ 0
- ---------------------------------------------------- --------- ---------
SHAREHOLDERS' DEFICIENCY
Common shares, $.001 par value,
50,000,000 shares authorized, 1,000,000
shares issued and outstanding 1,000 1,000
(Deficit) accumulated during development stage (152,939) (1,000)
- ---------------------------------------------------- --------- ---------
(151,939) -
- ---------------------------------------------------- --------- ---------
$ - $ -
- ---------------------------------------------------- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTES.
APPROVED BY Director
--------------------------------------
2.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
OCT. 15, 1987
(INCEPTION) TO
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1998 1997 1996 1995 1998
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Professional fees $ 150,000 $ -- $ -- $ -- $ 150,000
Operating expenses 1,939 -- -- -- 2,939
- ---------------------------------------- ----------- --------- --------- --------- -----------
Net loss $ (151,939) $ -- $ -- $ -- $ (152,939)
- ---------------------------------------- ----------- --------- --------- --------- -----------
Per share information:
Basic loss per common
shares $ (0.15) $ -- $ -- $ -- $ (0.15)
- ---------------------------------------- ----------- --------- --------- --------- -----------
Weighted average shares
outstanding 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
- ---------------------------------------- ----------- --------- --------- --------- -----------
</TABLE>
SEE ACCOMPANYING NOTES.
3.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIENCY
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
DEFICIT
ADDITIONAL ACCUMULATED
COMMON SHARE PAID-IN DURING DEVELOP-
ACTIVITY SHARES AMOUNT CAPITAL MENT STAGE TOTAL
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares issued at inception for
services 1,000,000 $ 1,000 $ - $ - $ 1,000
Net loss for the period ended
December 31, 1987 - - - (1,000) (1,000)
- ------------------------------- --------- ------- ------- ---------- ----------
Balance, December 31, 1987
to December 31, 1997 1,000,000 1,000 - (1,000) -
Net loss for the year ended
December 31, 1998 - - - (151,939) (151,939)
- ------------------------------- --------- ------- ------- ---------- ----------
Balance, December 31, 1998 1,000,000 $ 1,000 $ - $ (152,939) $ (151,939)
- ------------------------------- --------- ------- ------- ---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES.
4.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
OCT. 15, 1987
(INCEPTION) TO
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1998 1997 1996 1995 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net loss $ (151,939) $ - $ - $ - $ (152,939)
Adjustment to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Common stock issued for
services - - - - 1,000
Changes in assets and
liabilities
Increase in accounts payable and
accrued liabilities 151,939 - - - 151,939
- --------------------------------------- ----------- ------ ----- ----- ----------
Net cash from operating activities - - - - -
Cash flows from investing activities - - - - -
Cash flows from financing activities - - - - -
- --------------------------------------- ----------- ------ ----- ----- ----------
Increase (decrease) in cash - - - - -
Cash and cash equivalents at
beginning of period - - - - -
- --------------------------------------- ----------- ------ ----- ----- ----------
Cash and cash equivalents at
end of period $ - $ - $ - $ - $ -
- --------------------------------------- ----------- ------ ----- ----- ----------
</TABLE>
SEE ACCOMPANYING NOTES.
5.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
1. ORGANIZATION
The Company was incorporated on October 15, 1987, in the State of Florida.
The Company is in the development stage and its intent is to locate
suitable business ventures to acquire. The Company has had no significant
business activity to date and has chosen December 31st as a fiscal year
end.
2. SIGNIFICANT ACCOUNTING POLICIES
ESTIMATES
The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's short-term financial instruments consists of accounts
payable. The carrying amounts of the Company's financial instruments
approximates fair value because of their short-term maturities. The Company
does not hold or issue financial instruments for trading purposes nor does
it hold or issue interest rate or leveraged derivative financial
instruments.
3. SHAREHOLDERS' EQUITY
On July 22, 1998, the Company's Board of Directors approved an amendment to
the Company's Articles of Incorporation whereby the authorized capital was
increased to 50,000,000 of $.001 par value common stock. Additionally, a
forward stock split of 10,000 shares to 1 share was approved. All share and
per share data included in these financial statements has been restated to
reflect the effect of the stock split.
At inception, the Company issued 1,000,000 shares of common stock to an
officer for services provided in connection with the organization of the
Company. The value of the services had been charged to operations for the
period ended December 31, 1987.
4. BASIS OF PRESENTATION
The accompanying financial statements have been prepared on a "going
concern" basis which contemplates the realization of assets and the
liquidation of liabilities in the ordinary course of business.
The Company has no established source of revenue and has incurred operating
losses since its inception aggregating $152,939 and has negative working
capital at December 31, 1998 of $151,939. There can be no assurance that
profitable operations will be attained or that management will be
successful in raising additional equity capital for the Company.
Management plans to seek an operating company as a merger partner for the
Company which would provide a base of operations and additional capital.
6.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
5. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer. The cost of such
services are immaterial to the financial statements and, accordingly, have
not been reflected therein. The officers and directors of the Company are
involved in other business activities and may, in future, become involved
in other business opportunities. If a specific business opportunity becomes
available, such persons may face a conflict of interest in carrying out
their specific duties with respect to the Company. The Company has not
established a policy for the resolution of such potential conflicts.
6. INCOME TAXES
At December 31, 1998, the Company has net loss carry forwards for income
tax purposes of approximately $153,000 which expires in various years to
2012.
7. YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems, which use certain dates in 1999 to
represent something other than a date. 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.
8. SUBEQUENT EVENTS
i. On January 21, 1999 the Company satisfied $150,000 of the accounts
payable and accrued liabilities by the issuance of 15,000,000 common
shares.
ii. On January 29, 1999, the Company acquired 100% of the common shares
of BBL Technologies Inc., an Ontario, Canada Corporation by issuing
11,048,000 common shares. BBL Technologies Inc. ("BBL") holds the
Canadian patent to a catalytic converter/muffler technology. The Company
acquired BBL in order to develop the technology into a commercial
product.
The Company owns the only shares with voting and participating rights of
BBL. The original holder of the patented technology Next Catalytic
Converter Corporation ("NCCC"), an Ontario, Canada corporation, which is
related to BBL due to common shareholders, transferred the technology to
BBL on December 14, 1998 in return for 700,000 special shares with a
fixed value of $453,900 which are non-voting, non-participating and are
only retractable by BBL. As the special shares are retractable only at
the discretion of BBL, no value will be attributed to those shares.
7.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
8. SUBEQUENT EVENTS (Cont'd.)
The acquisition has been accounted for by using the purchase method of
accounting. In determining the value of the purchase of BBL, it is
appropriate to use the quoted market price of the shares of the Company at
the time of acquisition if the shares reflected the fair value of the
Company. As the Company was a "shell company" at the time of acquisition,
the fair value of the Company was nominal and thus the use of the market
value of the shares of the Company in determining the purchase price would
not be appropriate.
As a result the purchase price was determined based upon the fair value of
the net assets of BBL, being the patented technology. Since the technology
was acquired in a non-arm's length transaction between BBL and NCCC the
original cost of the patented technology, as determined by NCCC, being
$2,327 is deemed to be the acquisition price.
<TABLE>
<S> <C>
Patented technology $ 2,327
Special shares -
----------
$ 2,327
----------
----------
</TABLE>
iii The Company changed its name to Environmental Solutions Worldwide, Inc.
on February 19, 1999.
iv. The Company issued 954,538 common shares for net proceeds of $653,250.
8.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
AS AT JUNE 30, 1999
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
NOTE 1999 1998
- ---------------------------------------------- ---- --------- -----------
<S> <C> <C> <C>
ASSETS
CURRENT
Cash $ 379,901 $ --
- ---------------------------------------------- ---- --------- ---------
PATENTED TECHNOLOGY 4 2,327 --
- ---------------------------------------------- ---- --------- ---------
$ 382,228 $ --
LIABILITIES
CURRENT
Accounts payable $ 161,230 $ 151,939
Loan payable, shareholder, non-interest
bearing and due on demand 18,576 --
- ---------------------------------------------- ---- --------- ---------
179,806 151,939
- ---------------------------------------------- ---- --------- ---------
SHAREHOLDERS' EQUITY (DEFICIENCY)
Special shares, no par value, unlimited
shares authorized, 700,000 shares
issued and outstanding 4 -- --
Common shares, $.001 par value,
50,000,000 shares authorized, 28,002,538
shares issued and outstanding 5 50,000 1,000
Additional paid-in capital 756,577
(Deficit) accumulated during development stage (604,155) (152,939)
- ---------------------------------------------- ---- --------- ---------
202,422 (151,939)
- ---------------------------------------------- ---- --------- ---------
$ 382,228 $ --
- ---------------------------------------------- ---- --------- ---------
- ---------------------------------------------- ---- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTES.
1.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTH
PERIOD OCTOBER 15, 1987
ENDED YEAR ENDED (INCEPTION) TO
JUNE 30, DECEMBER 31, JUNE 30,
1999 1998 1999
- --------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
EXPENSES
Development costs $ 373,110 $ -- $ 373,110
Professional fees 62,371 150,000 212,371
Office and general 11,635 1,939 14,574
Director fees 4,100 -- 4,100
- --------------------------- ------------ ------------ ------------
Net loss $ (451,216) $ (151,939) $ (604,155)
- --------------------------- ------------ ------------ ------------
Loss per share information:
Basic $ (0.02) $ (0.15) $ (0.025)
- --------------------------- ------------ ------------ ------------
Weighted average shares
outstanding 23,890,728 1,000,000 23,890,728
- --------------------------- ------------ ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
2.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIENCY
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING
COMMON SHARE PAID-IN DEVELOP-
ACTIVITY SHARES AMOUNT CAPITAL MENT STAGE TOTAL
- -------------------------------- ---------- -------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Shares issued at inception for
services 1,000,000 $ 1,000 $ -- $ -- $ 1,000
Net loss for the period ended
December 31, 1987 -- -- -- (1,000) (1,000)
Net loss for the period ended
December 31, 1998 -- -- -- (151,939) (151,000)
- -------------------------------- ---------- -------- --------- ---------- ---------
Balance, December 31, 1987
to December 31, 1998 1,000,000 1,000 -- (152,939) (151,939)
Net loss for the period ended
June 30, 1999 -- -- -- (451,216) (451,216)
Shares issued in settlement of
debt 15,000,000 49,000 101,000 -- 150,000
Shares issued for cash, net
of issuance costs of $136,750 954,538 -- 653,250 -- 653,250
Shares issued on acquisition
of BBL Technologies, Inc. 11,048,000 -- 2,327 -- 2,327
- -------------------------------- ---------- -------- --------- ---------- ---------
Balance, June 30, 1999 28,002,538 $ 50,000 $ 756,577 $ (604,155) $ 202,422
- -------------------------------- ---------- -------- --------- ---------- ---------
- -------------------------------- ---------- -------- --------- ---------- ---------
</TABLE>
SEE ACCOMPANYING NOTES.
3.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTH
PERIOD OCTOBER 15, 1987
ENDED YEAR ENDED (INCEPTION) TO
JUNE 30, DECEMBER 31, JUNE 30,
1999 1998 1999
- --------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Net loss $(451,216) $(151,939) $(604,155)
Adjustment to reconcile net
loss to net cash provided by
(used in) operating activities:
Changes in assets and liabilities
Increase in accounts payable 159,300 151,939 312,239
- --------------------------------------------- --------- --------- ---------
Net cash provided by (used in)
operating activities (291,916) -- (291,916)
Cash flows from financing activities:
Issue of common shares, net of
Issuance costs 653,250 -- 653,250
Increase in loan payable 18,567 -- 18,567
- --------------------------------------------- --------- --------- ---------
Increase in cash 379,901 -- 379,901
Cash and cash equivalents at
beginning of period -- -- --
- --------------------------------------------- --------- --------- ---------
Cash and cash equivalents at
end of period $ 379,901 $ -- $ 379,901
- --------------------------------------------- --------- --------- ---------
Supplemental disclosures
Non-cash investing and financing activities
Conversion of accounts payable into equity $ 150,000 -- $ 150,000
Acquisition of BBL 2,327 -- 2,327
- --------------------------------------------- --------- --------- ---------
- --------------------------------------------- --------- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTES.
4.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION - DEVELOPMENT STAGE COMPANY
Environmental Solutions Worldwide, Inc. ("the Company") is considered to be
in the development stage, and the accompanying financial statements,
represent those of a development stage enterprise. The successful
completion of the company's business plan and, ultimately, the attainment
of profitable operations is dependent upon future events, including
obtaining adequate financing to fulfil its business plan.
2. BUSINESS
The Company was incorporated on October 15, 1987 in the state of Florida
and was inactive until January 29, 1999 when it acquired 100% of the issued
and outstanding common shares of BBL Technologies Inc. ("BBL"), a private
Ontario, Canada corporation.
BBL, a wholly owned subsidiary of the Company holds the Canadian patent to
a catalytic converter/muffler technology.
As the technology is in its development phase, the Company is still
considered to be a development stage company.
3. SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary. All significant intercompany transactions
are eliminated.
ESTIMATES
The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates. Estimates that are particularly susceptible to change
in the near term include the evaluation of the recoverability of the
patented technology.
FINANCIAL INSTRUMENTS
The Company's short-term financial instruments consists of accounts
payable. The carrying amounts of the Company's financial instruments
approximates fair value because of their short-term maturities. The Company
does not hold or issue financial instruments for trading purposes nor does
it hold or issue interest rate or leveraged derivative financial
instruments.
NET LOSS PER SHARE
The basic loss per share is computed by dividing the net loss for the
period by the weighted average number of common shares outstanding for the
period. When present, common stock equivalents are excluded from the
computation if their effect would be antidilutive. Shares issued at
inception are considered to be outstanding for the entire period presented.
5.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
3. SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
CASH AND CASH EQUIVALENTS
Cash and cash equivalent consist of cash and other highly liquid debt
instruments with an original maturity of less than three months.
PATENTED TECHNOLOGY
The patented technology is carried at cost less amounts amortized.
Amortization will be provided once the product has begun its test marketing
phase and will be based on an estimate of the time required for the Company
to cover its initial investment.
RECENT PRONOUNCEMENTS
SFAS N. 120, "Reporting Comprehensive Income", establishes guidelines for
all items that are to be recognized under accounting standards as
components of comprehensive income to be reported in the financial
statements. The statement is effective for all periods beginning after
December 15, 1997 and reclassification of financial statements for earlier
periods will be required for comparative purposes. To date, the Company has
not engaged in transactions which would result in any significant
difference between its reported net loss and comprehensive net loss as
defined in the statement.
4. ACQUISITON
On January 29, 1999, the Company acquired 100% of the common shares of BBL
Technologies Inc., an Ontario, Canada Corporation by issuing 11,048,000
common shares. BBL Technologies Inc. ("BBL") holds the Canadian patent to a
catalytic converter/muffler technology. The Company acquired BBL in order
to develop the technology into a commercial product.
The Company owns the only shares with voting and participating rights of
BBL. The original holder of the patented technology Next Catalytic
Converter Corporation "(NCCC"), an Ontario, Canada corporation, which is
related to BBL due to common shareholders, transferred the technology to
BBL on December 14, 1998 in return for 700,000 special shares with a fixed
value of $453,900 which are non-voting, non-participating and are only
retractable only at the discretion of BBL, no value will be attributed to
those shares.
The acquisition has been accounted for by using the purchase method of
accounting. In determining the value of the purchase of BBL, it is
appropriate to use the quoted market price of the shares of the Company at
the time of acquisition if the shares reflected the fair value of the
Company. As the Company was a "shell company" at the time of acquisition,
the fair value of the Company was nominal and thus the use of the market
value of the shares of the Company in determining the purchase price would
not be appropriate.
6.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
4. ACQUISITION (Cont'd.)
As a result, the purchase price was determined based upon the fair value of
the net assets of BBL, being the patented technology. Since the technology
was acquired in a non-arm's length transaction between BBL and NCCC, the
original cost of the patented technology, as determined by NCCC, being
$2,327 is deemed to be the acquisition price.
<TABLE>
<S> <C>
Patented technology $2,327
Special shares --
------
$2,327
</TABLE>
5. SHAREHOLDERS' EQUITY
On July 22, 1998, the Company's Board of Directors approved an amendment to
the Company's Articles of Incorporation whereby the authorized capital was
increased to 50,000,000 of $.001 par value common stock. Additionally, a
forward stock split of 10,000 shares to 1 share was approved. All share and
per share data included in these financial statements has been restated to
reflect the effect of the stock split.
At inception, the Company issued 1,000,000 shares of common stock to an
officer for services provided in connection with the organization of the
Company. The value of the services had been charged to operations for the
period ended December 31, 1987.
On January 21, 1999, the Company satisfied $150,000 of the accounts
payable and accrued liabilities by the issuance of 15,000,000 common
shares.
6. DEVELOPMENT COSTS
The Company through its wholly owned subsidiary has commenced the
development phase of its patented technology. The development costs
incurred up to June 30, 1999 are summarized as follows:
<TABLE>
<S> <C>
Product Development $279,585
Consulting 93,525
--------
$373,110
</TABLE>
7.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
7. OPTIONS AND WARRANTS
I) WARRANTS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
ISSUED AMOUNT DUE DATE EXERCISED CANCELLED OUTSTANDING
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
60,000 $2.50/warrant April 9, 2004 -- -- 60,000
62,500 $3.00/warrant April 9, 2004 -- -- 62,500
</TABLE>
II) OPTIONS
The Company granted options to consultants of the Company. The options can
be exercised any time up to December 31, 2000.
Activity of Stock Options is summarized below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
WEIGHTED
OPTIONS LOW HIGH AVERAGE
----------------------------------- ------- ------ ------ ------
<S> <C> <C> <C> <C>
Options outstanding January 1, 1998 - - - -
Granted during period 105,000 $ 2.00 $ 2.00 $ 2.00
----------------------------------- ------- ------ ------ ------
Options outstanding June 30, 1999 105,000 $ 2.00 $ 2.00 $ 2.00
----------------------------------- ------- ------ ------ ------
Weighted average remaining life of
options 1.41 years
----------------------------------- ---------- ------ ------ ------
</TABLE>
STOCK-BASED COMPENSATION
The Company applies APB 25 and related interpretations in accounting for
its Stock Options. Accordingly, no compensation expense has been recognized
for its stock-based compensation plan. Had compensation costs for the Stock
Options granted been determined based on the fair value at the grant date,
consistent with the methodology prescribed under SFAS 123, the Company's
net loss and loss per share would have been increased to the following
pro-forma amounts.
8.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
7. OPTIONS AND WARRANTS (Cont'd.)
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED
JUNE 30, 1999
---------------------------------------- -------------
<S> <C>
Net loss, as reported $(451,216)
Estimated stock-based compensation costs (31,500)
---------------------------------------- ---------
Pro-forma net loss $(482,716)
---------------------------------------- ---------
Basic pro-forma loss per share (0.02)
---------------------------------------- ---------
Fully diluted pro-forma loss per share (0.02)
---------------------------------------- ---------
</TABLE>
The weighted average fair value of all options granted during fiscal 1999
was estimated as of the date of grant using the Black-Scholes option
pricing model with the following and weighted average results and
assumptions.
<TABLE>
<CAPTION>
--------------------------------------------- -------------
SIX MONTH
PERIOD ENDED
JUNE 30, 1999
--------------------------------------------- -------------
<S> <C>
Weighted average fair value of options issued $ 0.30
Expected option life, in years 1.41
Volatility 75%
Risk free interest rate 4.9%
Dividend yield --
</TABLE>
The Black-Scholes model used by the Company to calculate option values, as
well as other currently accepted option valuation models, were developed to
estimate the fair value of freely tradable, fully transferable options
without vesting restrictions, which significantly differ from the Company's
stock option awards. These models also require highly subjective
assumptions, including future stock price volatility and expected time
until exercise, which greatly affect the calculated values. Accordingly,
Management believes that this model does not necessarily provide a reliable
single measure of the fair value of the Company's stock option awards.
8. RELATED PARTY TRANSACTIONS
i. The patented technology was acquired by the Company's wholly owned
subsidiary BBL for $2,327 from a company with the same common
shareholders (Note 4).
ii. Included in development costs are consulting fees of $25,390 which
were paid to Bruno Liber, a significant shareholder.
iii. Included in development costs are consulting fees of $64,234 which
were paid to TVP Consulting Services, a company which is related to a
shareholder of the Company.
9.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
9. YEAR 2000
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems, which use certain dates in 1999 to
represent something other than a date. 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.
10. INCOME TAXES
At June 30, 1999, the Company had net loss carry forwards for income tax
purposes of approximately $602,000 which expire at various years to 2013.
11. CHANGE OF NAME
On February 19, 1999, the Company changed its name to Environmental
Solutions Worldwide, Inc.
10.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
BBC Stock Market, Inc.
We have audited the accompanying balance sheet of BBC Stock Market, Inc. (a
development stage company) as of August 3, 1998 and December 31, 1997 and
1996 and the related statements of operations, stockholders' equity, and cash
flows for the period ended August 31, 1998 and the years ended December 31,
1997 and 1996. 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 audit.
We conducted our audits in accordance with generally accepted auditing
standards. 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
significant estimates 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, the financial statements referred to above present fairly,
in all material respects, the financial position of BBC Stock Market, Inc. (a
development stage company) as of August 3, 1998 and the results of its
operations, and its cash flows for the period ended August 31, 1998 and the
years ended December 31, 1997 and 1996 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from
operations and has no established source of revenue, which raise substantial
doubts about its ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 4. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ James E. Scheifley & Associates, P.C.
------------------------------------------
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
August 19, 1998
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
August 31, December 31, December 31,
ASSETS 1998 1997 1996
------ ---------- ------------ -----------
<S> <C> <C> <C>
Current Assets:
Cash $ -- $ -- $ --
---------- ------------ -----------
Total current assets -- -- --
Other assets -- -- --
---------- ------------ -----------
$ -- $ -- $ --
========== ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 1,939 $ -- $ --
---------- ----------- -----------
Total current liabilities 1,939 -- --
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized,
1,000,000 shares issued
and outstanding 1,000 1,000 1,000
Additional paid-in capital -- -- --
(Deficit) accumulated during
development stage (2,939) (1,000) (1,000)
---------- ----------- -----------
(1,939) -- --
---------- ----------- -----------
$ -- $ -- $ --
========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Period October 15, 1987
Ended Years Ended (Inception) to
August 3, December 31, December 31, August 3,
1998 1997 1996 1998
----------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Operating expenses 1,939 -- -- 1,000
----------- ------------ ------------ ---------------
Net (loss) $ (1,939) $ -- $ -- $ (1,000)
----------- ------------ ------------ ---------------
Per share information:
Basis (loss) per common share $ (0.00) $ -- $ -- $ (0.00)
----------- ------------ ------------ ---------------
Weighted average shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000
----------- ------------ ------------ ---------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (October 15, 1987) to August 3, 1998
<TABLE>
<CAPTION>
Deficit
Common Stock Additional Accumulated
---------- -------- Paid-in Development
ACTIVITY Shares Amount Capital Stage Total
---------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Balance at inception -- $ -- $ -- $ -- $ --
Shares issued at inception for services 1,000,000 1,000 -- 1,000
Net (loss) for the period
ended December 31, 1987 -- -- -- (1,000) (1,000)
---------- -------- ---------- ----------- --------
Balance, December 31, 1987 through 1997 1,000,000 1,000 -- (1,000) --
Net (loss) for the period
ended August 3, 1998 -- -- -- (1,939) (1,939)
---------- -------- ---------- ----------- --------
Balance, August 3, 1998 1,000,000 $ 1,000 $ -- $ (3,939) $ (2,939)
========== ======== ========== =========== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
Period October 15, 1987
Ended Years Ended (Inception) to
August 3, December 31, December 31, August 3,
1998 1997 1996 1998
----------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Net income (loss) $ (1,939) $ (2,939)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Common stock issued
for services -- -- -- 1,000
Changes in assets and liabilities:
(Increase) decrease in
accounts payable 1,939 -- -- 1,939
----------- ------------ ------------ ---------------
Net cash provided by (used in)
operating activities -- -- -- --
Cash flows from investing
activities -- -- -- --
Cash flows from financing
activities -- -- -- --
----------- ------------ ------------ ---------------
Increase (decrease) in cash -- -- -- --
Cash and cash equivalents,
beginning of period -- -- -- --
----------- ------------ ------------ ---------------
Cash and cash equivalents,
end of period $ -- $ -- $ -- $ --
=========== ============ ============ ================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
Note 1. ORGANIZATION
The Company was incorporated on October 15, 1987, in the State of Florida.
The Company is in the development stage and its intent is to locate suitable
business ventures to acquire. The Company has had no significant business
activity to date and has chosen December 31st as a fiscal year end.
SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
these estimates.
Fair Value of Financial Instruments
The Company's short-term financial instruments consists of accounts payable.
The carrying amounts of the Company's financial instruments approximates fair
value because of their short-term maturities. The Company does not hold or
issue financial instruments for trading purposes nor does it hold or issue
interest rate or leveraged derivative financial instruments
Net loss per share
In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings Per Share." SFAS No. 128 supersedes and simplifies
the existing computational guidelines under Accounting Principles Board
("APB") Opinion No. 15, "Earnings Per Share."
The statement is effective for financial statements issued for periods ending
after December 15, 1997. Among other changes, SFAS No. 128 eliminates the
presentation of primary earnings per share and replaces it with basic
earnings per share for which common stock equivalents are not considered in
the computation. it also revises the computation of diluted earnings per
share. The Company has adopted SFAS No. 128 and there is no material impact
to the Company's earnings per share, financial condition, or results of
operations. The Company's earnings per share have been restated for all
periods presented to be consistent with SFAS No. 128.
The basic loss per share is computed by dividing the net loss for the period
by the weighted average number of common shares outstanding for the period.
When present, common stock equivalents are excluded from the computation if
their effect would be anti-dilutive. Shares issued at inception are
considered to be outstanding for the entire period presented.
<PAGE>
Cash and cash equivalents
Cash and cash equivalents consist of cash and other highly liquid debt
instruments with an original maturity of less than three months.
Recent Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for
all items that are to be recognized under accounting standards as components
of comprehensive income to be reported in the financial statements. The
statement is effective for all periods beginning after December 15, 1997 and
reclassification of financial statements of financial statements for earlier
periods will be required for comparative purposes. To date, the Company has
not engaged in transactions which would result in any significant difference
between its reported net loss and comprehensive net loss as defined in the
statement.
Note 2. STOCKHOLDERS' EQUITY
On July 22, 1998, the Company's Board of Directors approved an amendment to
the Company's Articles of Incorporation whereby the authorized capital was
increased to 50,000,000 of $.001 par value common stock. Additionally, a
forward stock split of 10,000 shares to 1 share was approved. All share and
per share data included in these financial statements has been restated to
reflect the effect of the stock split.
At inception, the Company issued 1,000,000 shares of common stock to an
officer for services provided in connection with the organization of the
Company. The value of the services had been charged to operations for the
period ended December 31, 1987.
Note 3. INCOME TAXES
Deferred income taxes may arise from temporary differences resulting from
income and expense items reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified as current or
non-current, depending on the classifications of the assets and liabilities
to which they relate. Deferred taxes arising from temporary differences that
are not related to an asset or liability are classified as current or
non-current depending on the periods in which the temporary differences are
expected to reverse. The deferred tax asset related to the operating loss
carryforward has been fully reserved.
The Company has not provided current or deferred income taxes for the period
presented due to a loss from operations.
<PAGE>
The Company currently has a net operating loss carryforward aggregating
approximately $2,900 which expires $1,000 in 2002 and 1900 in 2013. The tax
benefit of the loss, estimated to be approximately $440, has been fully
reserved as its realization in future periods is not assured.
Note 4. Basis of presentation
The accompanying financial statements have been prepared on a "going concern"
basis which contemplates the realization of assets and the liquidation of
liabilities in the ordinary course of business.
The Company has no established source of revenue and has incurred operating
losses since its inception aggregating $2,939 and has negative working
capital at August 3, 1998 and $1,939. There can be no assurance that
profitable operations will be attained or that management will be successful
in raising additional equity capital for the Company.
Management plans to seek an operating company as a merger partner for the
Company which would provide a base of operations and additional capital.
Note 5. Related party transactions.
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer. The cost of such services
are immaterial to the financial statements and, accordingly, have not been
reflected therein. The officers and directors of the Company are involved in
other business activities and may, in future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict of interest in carrying out their specific
duties with respect to the Company. The Company has not established a policy
for the resolution of such potential conflicts.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC. (FORMERLY BBC STOCK MARKET, INC.)
AT JUNE 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 379,901
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 379,901
<PP&E> 2,327<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 382,228
<CURRENT-LIABILITIES> 179,806
<BONDS> 0
0
0
<COMMON> 50,000
<OTHER-SE> 152,422
<TOTAL-LIABILITY-AND-EQUITY> 382,228
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 451,216<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (451,216)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (451,216)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
<FN>
<F1>INTANGIBLE ASSET SEE NOTES 3 AND 4 TO FINANCIAL STATEMENTS.
<F2>INCLUDED IN OTHER EXPENSES DEVELOPMENT COSTS -- $373,110, PROFESSIONAL
FEES -- $62,371
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BBC
STOCK MARKET, INC. FINANCIAL STATEMENTS AT DECEMBER 31, 1998 AND 1997.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> DEC-31-1998 DEC-31-1997
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 151,939 0
<BONDS> 0 0
0 0
0 0
<COMMON> 1,000 1,000
<OTHER-SE> (152,939) (1,000)
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 151,939<F1> 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (15,939) 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (15,939) 0
<EPS-BASIC> (0.15) 0
<EPS-DILUTED> 0 0
<FN>
<F1>INCLUDED PROFESSIONAL FEES $150,000.
</FN>
</TABLE>
