UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER: 0-27523
BULLHIDE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Washington 91-1605108
------------------------- -----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
10 Fairway Drive, Suite 211
Deerfield Beach, Florida 33441
(Address of principal executive offices, including zip code)
(954) 571-2400
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
requirements for the past 90 days.
YES [X] NO [ ]
The number of issued and outstanding shares of the Registrant's Common Stock,
$0.001 par value, as of February 18, 2000 as 10,612,051.
<PAGE>
BULLHIDE CORPORATION.
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Item 1. Financial Statements:
Balance Sheet as of March 31, 1999 and December 31, 1999................................... 3-4
Statements of Operations for the Three Months and Nine Months
Ended December 31, 1999 and 1998............................................................ 5
Statements of Cash Flows for the Three Months and Nine Months Ended
December 31, 1998 and 1999.................................................................. 6
Notes to Consolidated Financial Statements.................................................. 7-18
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................................................. 19-23
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.......................................................................... 24
Item 2. Changes in Securities...................................................................... 24
Item 3. Defaults Upon Senior Securities............................................................ 25
Item 4. Submission of Matters to a Vote of Security Holders........................................ 25
Item 5. Other Information.......................................................................... 25
Item 6. Exhibits and Reports on Form 8-K........................................................... 25
Signatures................................................................................................... 26
</TABLE>
<PAGE>
THE BULLHIDE LINER CORPORATION
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 1999
------------ -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ - $ 2,875
Accounts receivable, Net of allowance for doubtful
accounts of $65,000 and $30,000, respectively 172,987 111,461
Inventory 18,749 49,219
Investments - -
Prepaid expenses and deposits 10,123 -
--------- ---------
Total current assets 201,859 163,555
--------- ---------
FURNITURE AND EQUIPMENT:
Cost 24,805 147,483
Less accumulated depreciation 20,777 78,177
--------- ---------
4,028 69,306
--------- ---------
OTHER ASSETS:
Mississippi Franchise 10,000 10,000
Deposits 7,217
Systems development 46,830 46,830
Trademark 1,450 1,450
--------- ---------
65,497 58,280
Less accumulated amortization 29,554 25,954
--------- ---------
35,943 32,326
--------- ---------
$ 241,830 $ 265,187
========= =========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
THE BULLHIDE LINER CORPORATION
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 1999
--------------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 282,592 $ 195,582
Checks issued in excess of bank balance 22,387 15,930
Accrued taxes - 72,487
Accrued payroll and employee benefits 24,000 4,144
Accrued expenses 17,437 95,960
Accrued interest 28,394 31,825
Royalty payable 123,090 73,628
Customer deposits 22,000 22,650
Current obligations under capital lease - 7,508
Current maturities of long-term debt 40,052 259,000
----------- -----------
Total current liabilities 559,952 778,714
OBLIGATIONS UNDER CAPITAL LEASE - 12,119
LONG-TERM DEBT, LESS CURRENT MATURITIES 100,803 172,921
----------- -----------
Total liabilities 660,755 963,754
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock - 50,000,000 shares,$.002 par value, authorized;
9,985,218 and 7,875,451 shares issued and outstanding, respectively 21,224 15,751
Preferred stock - 1,000,000 shares, $1.00 par value,
authorized; 60,000 shares issued and outstanding 60,000 60,000
Additional paid-in capital 2,164,633 1,552,872
Retained earnings (deficit) (2,664,782) (2,327,190)
----------- -----------
Total stockholders' equity (deficit) (418,925) (698,567)
----------- -----------
$ 241,830 $ 265,187
=========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
THE BULLHIDE LINER CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
QUARTER ENDED DECEMBER 31, ENDED DECEMBER 31,
1999 1998 1999 1998
---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
SALES $ 194,553 $ 321,331 $ 989,245 $ 1,358,352
COST OF SALES 185,704 253,914 659,905 1,057,331
---------- ----------- ------------- -----------
---------- ----------- ------------- -----------
GROSS PROFIT 8,849 67,417 329,340 301,021
---------- ----------- ------------- -----------
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Advertising 25,782 32,959 58,825 66,041
Trade shows and exhibits - 6,506 - 11,887
Marketing - (3,172) - 30,662
Travel 1,552 563 3,602 35,555
Postage and shipping 2,929 5,099 8,701 18,953
Salaries and wages 39,786 104,406 262,681 399,200
Payroll taxes 4,148 9,202 20,298 30,816
Employee benefits - 13,734 12,994 27,984
Taxes and Licenes 2,295 3,017 2,161 10,407
Vehicle expense 574 1,517 1,318 3,568
Dues and subscriptions 189 161 537 1,480
Legal and professional fees 15,441 9,494 73,467 35,963
Office supplies 272 4,092 2,991 12,408
Shop supplies - 7,929 2,316 28,131
Rent 6,610 4,321 31,350 47,122
Utilities 2,575 10,772 16,734 38,644
Depreciation 900 4,500 3,900 13,500
Amortization 1,200 1,200 3,600 3,600
Royalties 9,728 16,640 49,462 66,654
Other (1,135) 86,149 17,722 105,622
Bad Debts 30,000 8,277 45,000 8,277
---------- ----------- ------------- -----------
142,846 327,366 617,659 996,474
---------- ----------- ------------- -----------
LOSS FROM OPERATIONS (133,997) (259,949) (288,319) (695,453)
GAIN ON THE SALE OF INVESTMENTS - - - 5,000
GAIN ON THE SALE OF SPOKANE SHOP ASSETS - - 7,312 -
LOSS ON ABANDONMENT OF SPOKANE FACILITY - - (47,681) -
OTHER EXPENSE, INTEREST (2,040) (7,076) (8,904) (14,502)
---------- ----------- ------------- -----------
NET LOSS $ (136,037) $ (267,025) $ (337,592) $ (704,955)
========== ========== ========== ===========
BASIC AND DILUTED LOSS PER SHARE $ (0.0142) $ (0.0349) $ (0.0352) $ (0.0921)
========== ========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
THE BULLHIDE LINER CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999 AMD 1998
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (337,592) $ (704,955)
Adjustments to reconcile net loss to net cash
used in operating activities:
Net loss on sale and disposition of fixed assets 40,369 -
Bad debts 45,000 8,277
Depreciation and amortization 7,500 17,100
Sale of master distributorship for debt reduction (75,000) -
(Increase) decrease in assets:
Receivables (106,526) (105,849)
Inventory 30,470 (15,647)
Prepaid expenses and deposits (10,123) 322
Security deposits (7,217) -
Increase (decrease) in liabilities:
Accounts payable 57,010 26,220
Accrued taxes (72,487) 64,997
Accrued payroll and employee benefits 19,856 2,797
Accrued expenses (18,115) -
Accrued interest 8,189 9,100
Royalty payable 49,462 33,153
Customer deposits (650) (17,634)
---------- --------------
Net cash used in operating activities (369,854) (682,119)
---------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment - (1,418)
Checks issued in excess of bank balance 6,457 (14,233)
Sale of property and equipment 6,470 -
Abandonment of leasehold improvements - -
Proceeds from sale of investment - 5,000
---------- --------------
Net cash used by investing acrtivities 12,927 (10,651)
---------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 348,831 506,190
Stock offering costs paid (513) -
Borrowings on long term debt and lease obligations 7,253 24,322
Principal payments on long-term debt and lease obligations (1,519) 155,162
---------- --------------
Net cash provided by financing activities 354,052 685,674
---------- --------------
NET INCREASE IN CASH (2,875) (7,096)
CASH AT THE BEGINNING OF THE PERIOD 2,875 7,595
---------- --------------
CASH AT THE END OF THE PERIOD $ - $ 499
========== ==============
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 714 $ 2,754
Cash paid for income taxes - -
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITY:
Debt converted to common stock 196,888 -
Accrued expenses and interest converted to common stock 72,028 -
Shop assets sold for assumption of notes payable 44,539 -
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION:
The Company has granted franchises for the operation of pickup truck bed liner
spray application shops initially targeted for the pickup truck bed liner
market. In July 1996, the Company discontinued the sale of franchises for the
operation of pickup truck bed liner spray application shops. Subsequent to July
1996, the Company commenced selling dealerships under exclusive licensing
agreements and expanded into the industrial flooring market. As of December 31,
1999, the Company has sold sixty dealerships and has three operating franchises.
The Company grants credit to customers for sales of equipment and materials
throughout the United States. In addition, the Company operates a pickup truck
bed liner spray application shop in Spokane, Washington.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. METHOD OF ACCOUNTING - The Company prepares its financial statements
on the accrual method of accounting, recognizing income when earned
and expenses when incurred.
b. ACCOUNTS RECEIVABLE - The Company provides an allowance for doubtful
accounts based upon historical experience and a review of current
receivables.
c. INVENTORY - Inventory is stated at the lower of cost (determined on
the first-in, first-out method) or market.
D. FURNITURE AND EQUIPMENT - Furniture and equipment are stated at cost.
Depreciation is computed using the straight-line method for financial
reporting purposes. For federal income tax purposes, accelerated
methods are used.
e. INTANGIBLE ASSETS - Intangible assets subject to amortization include
system development costs and logo/trademark development costs. System
costs are being amortized using the straight-line method over the
estimated life of 10 years. Logo/trademark costs are being amortized
on a straight-line basis over 40 years.
f. ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
g. SALES - Spray application equipment is manufactured to customer
specifications and is recorded as a sale when the equipment is shipped
and customer acceptance is received.
(continued)
7
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(CONTINUED)
h. ADVERTISING COSTS - Advertising (marketing) costs are expensed as
incurred. Advertising expense was $58,825 and $66,041 for the nine
months ended December 31, 1999 and 1998, respectively.
i. LOSS PER SHARE - Loss per share is calculated based on the weighted
average of common shares outstanding. Diluted loss per share, based on
potential common stock such as warrants, options or contingent stock
agreements is not presented as such items are antidilutive.
j. RESEARCH AND DEVELOPMENT - Research and development costs are expensed
as incurred.
k. ROYALTY EXPENSE - Royalty expenses are recognized concurrently with
the recognition of the related revenue.
l. TRAINING AND SUPPORT - The Company provides training in the field and
ongoing support to licensed dealers. Costs are expensed and/or billed
as incurred.
NOTE 2 - INVENTORIES: DECEMBER 31, MARCH 31,
------------ ---------
1999 1999
---- ----
Inventories consisted of the following:
Raw materials $ 15,338 $ 37,991
Machine parts
1,179 6,398
Dealer marketing materials 2,232 4,830
-------- --------
$ 18,749 $ 49,219
======== ========
The Company's raw materials consist of polyurethane resins. There was no work in
process production of materials at December 31, 1999. Production of spray
application equipment was outsourced during the nine months ended December 31,
1999.
NOTE 3- FRANCHISING OPERATIONS:
a. SIGNIFICANT COMMITMENTS AND OBLIGATIONS - The Company is obligated in
accordance with the terms of each franchisee's respective franchise
agreement to provide the following supervision assistance and services:
site location, spray application training, operations manual, and
advertising literature. In addition, franchisees are required to
purchase inventory from the Company.
b. FRANCHISE ACTIVITY - The number of franchises sold and in operation
during the nine months ended December 31, 1999 and 1998 was three.
Current active franchises are located in Colorado, Canada, and Saudi
Arabia.
(continued)
8
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 3 - FRANCHISING OPERATIONS: (CONTINUED)
c. FRANCHISE FEES - Initial franchise fees and master dealership fees are
recorded as revenue when all the significant services relating to the
franchise and dealership sales have been performed by the Company.
d. ROYALTY - Each franchisee is required to pay a monthly royalty based on
sales, commencing one year after the franchise opens for business. The
Company has waived its right to receive royalties from franchisees
through December 31, 1999.
NOTE 4- FURNITURE AND EOUIPMENT:
<TABLE>
<CAPTION>
A summary of furniture and equipment follows: DECEMBER 31, MARCH 31,
----------- ---------
1999 1999
--------- ---------
<S> <C> <C>
Leasehold improvements $ - $ 20,231
Office furniture - 11,194
Computer 2,064 10,171
Vehicles - 28,200
Equipment 22,741 77,687
--------- ---------
24,805 147,483
Less accumulated depreciation 20,777 78,177
Total $ 4,028 $ 69,306
========= ========
NOTE 5- LONG-TERM DEBT:
Long-term debt consisted of the following: DECEMBER 31, MARCH 31,
1999 1999
--------- ---------
Note payable to bank, due in monthly installments
of $817 including variable interest;
collateralized by substantially all assets
and personally guaranteed by a stockholder* $ - $ 25,303
Note payable to bank, due in monthly installments
of $367 including interest at 10%, maturing
June 20, 1999; collateralized by vehicle and
personally guaranteed by a stockholder - 1,128
Note payable to ex-franchisee, due in monthly installments
of $1,350 including interest at 8.5%, maturing
July 31, 1999, including a $13,000 remaining balance
of the down payment on the franchise repurchase, with
no stated interest rate, and which was due and payable
October 15, 1997 (see notes 8 and 15) 38,450 33,450
</TABLE>
(continued)
9
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 5 - LONG-TERM DEBT: (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 1999
---- ----
<S> <C> <C>
Note payable to stockholders, interest at 12% of the
principal balance. Principal and interest due on
June 30, 2000; unsecured - 39,129
Note payable to stockholders, interest at 12% of the
principal balance. Principal and interest due on
June 28, 2000; unsecured
- 20,000
Note payable to related party (see notes 6 and 8). Principal
and interest are to be repaid with 85,500 shares of the Company's
common stock on or before February 28, 1999, for the 78,000
shares previously received; unsecured. Balance was paid in
full on April 13, 1999 - 37,744
Note payable to stockholders. Principal and interest are to be
repaid with 85,500 shares of the Company's common stock for
the 78,000 shares received. Balance was paid in full on
April 13, 1999 - 36,158
Note payable to stockholders. Principal and interest are to
be repaid with 47,850 shares of the Company's common stock for
the 43,500 shares received. Balance was paid in full
on April 13, 1999
- 14,387
Note payable to an unrelated party. Principal and interest are to
be repaid by 211,428 shares of the Company's stock for the
192,207 shares received. Balance was paid in full - 106,346
on April 13, 1999
Note payable to stockholders, interest at 8% and 10% of the
principal balance annually on March 31; unsecured 102,405 118,276
--------- --------
140,855 431,921
Less current maturities 40,052 259,000
--------- --------
Total $ 100,803 $172,921
========= ========
</TABLE>
* The Small Business Administration has guaranteed 90 percent of the
original amount ($50,000) of the note payable.
Total interest expense for the notes payable to stockholders was $8,904 and
$14,502 for the nine months ended December 31, 1999 and 1998, respectively.
(continued)
10
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 5 - LONG-TERM DEBT: (CONTINUED)
Maturities of long-term debt are as follows:
NINE MONTHS ENDING
DECEMBER 31, AMOUNT
------------ ------
2000 $ 60,923
2001 79,932
2002 -
---------
$ 140,855
NOTE 6- TRANSACTIONS WITH RELATED PARTIES:
During December 1998 the Company borrowed 78,000 shares of the Company's common
stock from Poly Chem Corporation which is 100% owned by a majority stockholder
of the Company. The Company sold the stock and received net proceeds of $37,744
(see note 5). The Company agreed to issue 85,800 shares of common stock as
repayment to Poly Chem Corporation no later than February 28, 1999. The shares
were issued April 13, 1999.
During May 1999, the Company sold a master dealership for the northwestern
United States and Western Canada to its' chairman (a majority stockholder) in
exchange for a reduction of $75,000 in the amount due him from the Company.
NOTE 7- PREFERRED STOCK:
Holders of the preferred stock have equal voting rights with the common
stockholders. The preferred stock is redeemable at the option of the Company at
$1 per share. As of the reporting date, the Company has not exercised the option
to redeem any of the preferred stock. Upon liquidation, the holders of the
preferred stock are entitled to receive, as a preferential distribution, the par
value of the preferred stock before any assets are distributed to the common
stockholders.
(continued)
11
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 8- COMMITMENTS:
On June 30, 1997, the Company purchased the technology rights from Poly Chem
Corporation for the materials used in the pickup bed liner and floor coating
processes as well as other polyurethane technology. Under the terms of the
purchase agreement, the Company will pay Poly Chem Corporation a royalty based
on five percent of total gross revenues of the Company to a maximum of $200,000.
As of December 31, 1999, $156,590 of royalties had been accrued, of which
$33,500 had been paid. Upon payment of the full $200,000 in royalties, Poly Chem
Corporation will transfer all of its interests in the formulation and technology
including, but not limited to, all patent rights therein, including the current
patent application 08/493858, and any and all future patent rights to Bullhide,
and shall have no further rights therein. The Company is in the process of
obtaining a patent for the materials used in the pickup bed liner process.
Future minimum royalty payments are as follows:
Year ending
DECEMBER 31, AMOUNT
------------ ------
2000 $166,500
========
On July 31, 1997, the Company repurchased the franchise rights together with
certain assets of an existing franchisee. Under the terms of the repurchase
agreement, the Company was obligated to pay the franchisee $88,700 under the
following terms:
Downpayment $ 2,500
Inventory 6,300
Monthly payments of $5,000 commencing October 15, 1997,
with no stated interest rate 38,200
Consulting services provided by the franchisee payable
at $1,000 per month commencing August 30, 1997 12,000
Remaining balance to be paid in monthly payments
of $1,350 including interest at 8.5%,
commencing August 30, 1997 29,700
--------
$ 88,700
========
To date, $50,250 has been paid (see note 5).
(continued)
12
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 9- INCOME TAXES:
The Company's deferred tax asset was as follows: DECEMBER 31, MARCH 31,
------------ ---------
1999 1999
---- ----
Deferred tax asset arising from net operating
loss carryforwards $ 906,000 $ 782,000
Valuation allowance (906,000) (782,000)
Net deferred income tax asset $ - $ -
========= =========
At December 31, 1999, the Company had approximately $2,665,000 in net operating
loss carryforwards which are available to reduce future taxable income. The
carryforwards begin to expire in 2011.
For the years presented, the income tax provision (benefit) differs from the
amount expected using statutory tax rates because of the effects of the deferred
tax asset valuation allowance.
NOTE 10- RECAPITALIZATION:
During the year ended March 31, 1997, the Company recapitalized its common and
preferred stock. Under the terms of the recapitalization, the par value of the
common and preferred stock were changed to $.002 and $1.00, respectively. The
number of authorized shares of common and preferred stock was increased to
50,000,000 and 1,000,000, respectively.
NOTE 11 - PRIVATE PLACEMENT:
On December 17, 1996, the Company was authorized to issue a private placement of
common stock. The Company is authorized to issue 10,000 units at $5.00 per unit.
As of July 10, 1998, all warrants were exercised (see note 12, paragraph 3).
Each unit consists of 50 shares of common stock and 95 redeemable stock purchase
warrants. The common stock purchase warrants are exercisable for one share of
common stock at $1.00 per share until December 17, 1998. The Company may redeem
the warrants at $.01 per warrant with 30-day prior written notice if the common
stock bid price equals or exceeds $2.50 per share for ten consecutive trading
days ending on the third day prior to or the date on which such notice was
given.
During the fiscal year ended March 31, 1998, all 10,000 units were sold, and
950,000 stock purchase warrants were exercised as of December 31, 1999 and
December 31, 1998.
(continued)
13
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 12 - SUBSCRIBED STOCK:
On April 1, 1999 an entity entered into an agreement with the Company to acquire
2,000,000 shares of free trading common stock at the stated price of $.50 per
share. The offering was completed on April 5, 1999 when the purchaser executed a
$1,000,000 promissory note payable to the Company with the stated interest rate
of twelve percent, and the unpaid principal and any earned interest due and
payable June 29, 1999. Subsequently, as the market price of the common stock
decreased, the agreement was periodically modified to amounts less than $.50 per
share. The remaining balance of the note was renegotiated for $412,000 as of
June 29, 1999 and extended until June 30, 2000.
Under Emerging Issues Task Force (EITF) Issue 85-1, notes receivable for
subscribed stock may not be recorded as an asset. If such notes were recorded as
of December 31, 1999, assets and stockholders' equity would be increased by
$218,536.
Sales of the subscribed stock have been recorded as the proceeds were received
through December 31, 1999.
NOTE 13- GOING CONCERN:
As shown in the Company's financial statements, the Company incurred net losses
of $322,593 for the nine months ended December 31, 1999. In addition, the
Company has negative working capital of $358,093 and stockholders' deficit of
$418,925. These conditions raise substantial doubt about the Company's ability
to continue as a going concern.
Management is committed to the future of the Company and has taken the following
actions to keep the Company viable and in existence as a going concern:
1. The Company has utilized long-term debt from the original stockholders to
fund the development of several key aspects of the national dealership
system including advertising for both the local and national promotion,
legal aspects such as state registrations, and improvements in application
equipment, as well as the employment and training of the needed personnel.
These developments are expected to benefit the organization in the future.
In addition, on June 30, 1997, the original stockholders of the Company
converted long-term debt plus accrued interest to common stock
2. On July 6, 1997 the Company hired an executive vice president of sales and
marketing. The vice president's responsibilities included hiring and
training a team of independent sales representatives and developing a
national marketing plan. He served as Bullhide's Chief Executive Officer
from October 1998 to October 1999 when he resigned as part of the
Company's efforts to reduce operating expense.
(continued)
14
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 13- GOING CONCERN (CONTINUED):
3. The Company completed a private placement of common stock during July 1997
which resulted in the issuance of 10,000 units at $5.00 per unit. Each
unit consisted of 50 shares of common stock and 95 redeemable stock
purchase warrants. The Company received its symbol to trade on the NASDAQ
Bulletin Board on December 17, 1997. A secondary market for the stock was
established. As of July 10, 1998 all warrants were exercised and the
company received a net total of $783,629. The Company has utilized this
investment capital to expand national advertising and exhibits at national
and regional trade shows. Research and engineering activities have also
been expanded to produce the next generation of application equipment and
coating and lining products.
4. Recent marketing efforts in the industrial flooring and chemical
containment markets have resulted in positive sales. Generally, jobs in
the flooring and chemical containment markets are much larger than the
truck bed liner market and may result in a higher sales volume of Bullhide
materials per order and per dealer.
5. During April 1999, the Company began the process of restructuring the
Company's operations and administration by moving its corporate office
from Spokane, Washington, to South Florida. A fifth master
distributorship, serving the Northwest region, has been established in
Spokane by the Company's founder. This restructuring will save the Company
in excess of $250,000 in annualized costs.
6. On May 6, 1999, the Company engaged a law firm to prepare a Registration
Statement on Form 10-SB for the registration of its securities with the
SEC. Beginning in January 1999, the NASD has required all prospective new
listing companies to become registered with the SEC in order to qualify
for listing on the OTC Bulletin Board exchange. Companies already on the
exchange were given deadlines to file a registration statement with the
SEC. The Company's deadline to complete its registration process with the
SEC was October 1999. As of December 31, 1999 the Company has filed Form
10-SB and one amendment in response to an SEC comment letter.
NOTE 14 - ISSUANCE OF COMMON STOCK ON CONVERSION OF DEBT:
On April 13, 1999, the following liabilities were converted to common stock:
Notes payable to stockholders and officers $122,986
(related parties)
Note payable to stockholders 36,158
Note payable to Poly Chem Corporation
(a related party) 37,744
$196,888
========
(continued)
15
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 15- PENDING LITIGATION:
On June 17, 1998, the holders of the note payable to ex-franchisee initiated
legal action to collect the remaining balance per the agreement. In addition,
the plaintiff has made a formal claim for compensation and lost opportunity to
pursue a successful business venture. The Company agrees to the note payable
liability and intends to vigorously defend the additional claims which the
Company considers groundless. The ultimate resolution of these matters is not
ascertainable at this time. No provision has been made in the financial
statements related to this claim.
On January 21, 1999, a Bullhide dealer initiated legal action for breach of
contract, fraud, and violation of the Tennessee Consumer Protection Act.
Plaintiff is seeking damages incurred. The Company intends to vigorously defend
the substantive claims in this case and is unable to estimate the success or the
amount or range of potential loss, if any.
NOTE 16- LEASE COMMITMENT:
The Company leases the building facilities in Spokane, Washington from an
unrelated third party. During May, 1999, the Company moved its administrative
and accounting offices from the leased facilities to South Florida. The third
party lessor, the Company's Spokane dealer and the Company's officer remaining
in Spokane are exerting their best efforts to locate a suitable replacement
lessee or sub-lease. The Company has accrued an expense, which management
believes is adequate to cover future payments related to this lease, during the
nine months ended December 31, 1999 as part of the loss on the abandonment of
the Spokane facility. Future minimum lease payments under the noncancellable
operating lease, with an option to renew, are as follows:
Year ended December 31, 2000 $46,645
(continued)
16
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 17 - EARNINGS (LOSS) PER SHARE:
Basic earnings (loss) per share are calculated by dividing earnings (loss) per
share by the weighted average number of common shares outstanding during the
period.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, 1999
---------------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
--------
<S> <C> <C> <C>
Income ( loss) from continuing operations $ (282,224) 9,597,134
Loss from sale/abandonment of Spokane facility $ ( 40,369) 9,597,134
Less preferred stock dividends - -
----------- ---------
Income (loss) available to common shareholders--
Basic earnings (loss) per share $ (322,593) 9,597,134 $ (.0336)
========== ========= ========
There were no dilutive securities, options or warrants at December 31, 1999.
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, 1998
---------------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
--------
<S> <C> <C> <C>
Income ( loss) from continuing operations $ (704,954) 7,656,141
Less preferred stock dividends - -
Income (loss) available to common shareholders -
Basic earnings (loss) per share $ (704,954) 7,656,141 $ (.0921)
========== ========= ========
</TABLE>
There were no dilutive securities, options or warrants at December 31, 1998.
(continued)
17
<PAGE>
THE BULLHIDE LINER CORPORATION
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(UNAUDITED)
NOTE 18 - REVENUES FROM CUSTOMERS:
Following is a summary of revenues from external customers for the Company's
product groups:
NINE MONTHS ENDED
DECEMBER 31,
-----------------------------------------
1999 1998
---------------- -------------------
AMOUNT Percent AMOUNT PERCENT
Product application sales $ 11,891 1.2% $ 154,544 11.4%
Chemical sales to dealers 610,992 61.7 531,614 39.1
Machines and machine parts 197,659 20.0 577,637 42.5
Dealer supply 5,804 0.6 49,467 3.7
Area development fees 162,899 16.5 45,000 3.3
-------- ----- ---------- -----
Other - - 90 0.0
Totals $989,245 100.0% $1,358,352 100.0%
======== ===== ========== =====
NOTE 19 - SUBSEQUENT EVENTS
The Company did not meet its October 6, 1999 deadline for registration with the
Securities and Exchange Commission (see NOTE 13 As a result of the delayed
registration, the Company's stock trading has been transferred from the NASD
O-T-C Bulletin Board to the O-T-C "pink sheets." The NASD will probably return
trading of the Company's stock to the Bulletin Board as soon as the Securities
and Exchange Commission registration is completed. As of February 14, 2000 the
registration had been completed and the Company has applied to resume listing on
the NASD O-T-C Bulletin Board exchange.
18
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF RESULTS OF OPERATIONS
In addition to historical information, this Quarterly Report contains
forward- looking statements. The forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those reflected in such forward-looking statements. Factors that
might cause such a difference include, but are not limited to, those discussed
in the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Factors That May Affect Future Results and
Market Price of Stock." Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's opinions only as of
the date hereof, Bullhide undertakes no obligation to revise or publicly release
the results of any revision to these forward-looking statements. Readers should
carefully review the risk factors described in other documents Bullhide files
from time to time with the SEC.
RESULTS OF OPERATIONS
Nine months ended December 31, 1999 ("first nine months of 1999")
compared with nine months ended December 31, 1998 ("first nine months of 1998")
the quarter ended December 31, 1999 ("third quarter of 1999") compared with the
quarter ended December 31, 1998 ("third quarter of 1998").
Total revenues were $989,245 in the first nine months of 1999 compared
with $1,358,352 in the first nine months of 1998, a decrease of 27.2%, and
$194,553 for the third quarter of 1999 compared with $321,331 for the third
quarter of 1998, a decrease of 39.5%. The decreases in revenue are attributable
to two factors: less equipment sales to new dealers, $197,659 in the first nine
months of 1999 compared to $577,637 in the first nine months of 1998 and $42,598
for the third quarter of 1999 compared to $141,681 in the third quarter of 1998,
and sale of the Company owned shop in Spokane, Washington on May 1, 1999, when
the Company moved its corporate office from Spokane to South Florida. Sales from
application of product in the Company owned shop were $154,544 for the nine
months ended December 31, 1998 and $11,891 for the nine months ended December
31, 1999, which consisted of one month of activity. However, revenue from
chemical sales to dealers was $610,992 for the nine months ended December 31,
1999 compared to $531,614 for the same period in 1998 and $151,741 for the third
quarter of 1999 compared to $146,163 for the third quarter of 1998. Revenue from
sales of master dealership was $162,899 for the nine months ended December 31,
1999 and $45,000 for the same period in 1998, with no master dealership sales in
the third quarter of either year. Management expects the trend of increased
chemical sales and sales of master dealership to continue as the dealer base
gets larger and the master dealership program continues.
Costs of sales was $659,905 in the first nine months of 1999 compared
with $1,057,331 in the first nine months of 1998, 66.7% and 77.8% of sales,
respectively. Costs of sales was $185,704 in the third quarter of 1999 compared
with $253,914 in the third quarter of 1998, 95.5% and 79.0% of sales,
respectively. The year-to-date decrease in cost of sales is due to the decreased
application of Bullhide's products by the Company owned shop during the first
nine months of 1999, more efficient operations and more advantageous chemical
pricing from a new supplier. The increase in cost of sales for the third quarter
of 1999 was predominately due to the delayed recording of the cost of a machine
which should have been recorded the prior fiscal year. Gross profit as a
percentage of sales increased from 22.2% in the first nine months of 1998 to
33.3% in the first nine months of 1999.
19
<PAGE>
Selling, General and administrative ("SG&A") expenses were $617,659
in the first nine months of 1999 compared with $996,474 in the first nine months
of 1998, a decrease of 38.0% and SG&A expenses were $142,846 for the third
quarter of 1999 compared to $327,366 for the same period in 1998, a decrease of
56.4%. All SG&A line item expenses decreased, except legal and professional fees
and bad debt expense increased. Legal and professional fees increased from
$35,963 in the first nine months of 1998 to $73,467 in the first nine months of
1999 and from $9,494 in the third quarter of 1998 to $15,441 in the third
quarter of 1999 as a result of the Company's legal & accounting fees to file
Form 10-QSB with the Securities and Exchange Commission and outsourcing
bookkeeping and accounting tasks which were performed by employees during 1998.
Management decided to increase the allowance for bad debts by $45,000 in first
nine months of 1999, while only $8,277 was deemed necessary in the first nine
months of 1998. Bad debt expenses are expected to remain high for the remainder
of the fiscal year. At December 31, 1999, accounts receivable 60 days past due
was approximately $121,000 and 90 days past due was approximately $84,000, while
the allowance for uncollectable accounts was approximately $65,000. All other
expenses decreased as a result of a reorganization including moving corporate
headquarters from Spokane, Washington to South Florida in May 1999.
Thus, Bullhide's loss from operations was $288,319 in the first nine
months of 1999 compared with a loss of $695,453 in the first nine months of 1998
and a loss from operations of $133,997 in the third quarter of 1999 compared to
a loss of $259,949 in the third quarter of 1998. Other income and expenses in
the first nine months of 1999 consisted of a $7,312 gain on the sale of certain
assets from the Bullhide shop in Spokane and a $47,681 loss on the abandonment
of the Spokane facility.
As a result of the forgoing, Bullhide's net loss in the first nine
months of 1999 was $337,592 compared with a net loss of $704,955 in the first
nine months of 1998 and a net loss of $136,037 for the third quarter of 1999
compared to a net loss of $267,025 for the third quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
Bullhide has financed it working capital requirements primarily with
sales of its common stock and by receiving loans from officers, directors and
shareholders. Bullhide had negative working capital of $358,093 at December 31,
1999, compared to negative working capital of $615,159 at March 31, 1999.
Bullhide's working capital deficit decreased as a result of converting $196,888
of debt and $72,028 of accrued interest and accrued expenses to common stock.
During fiscal 1999 and 1998, Bullhide raised approximately $1,000,000 of
net proceeds in private offerings. Bullhide has also received financing in the
form of loans from majority stockholders in the amount of $285,989 in fiscal
1999 and $373,600 in fiscal 1998.
Net cash used in operating activities decreased from $682,119 in the nine
months ended December 31, 1998 to $369,854 for the same period in 1999. This
decrease was primarily due to the improvement in net losses as a result of the
Company's move to South Florida. However, slow collections of accounts
receivable from dealers caused a cash use of $106,526 for the nine months ended
December 31, 1999. Net cash provided by investing activities was $12,927 for the
first nine months of 1999. Net cash provided by financing activities was
$354,052 for the first nine months of 1999, $348,831 of which was from the sale
of common stock.
Although the Company has relied on the sale of common stock to fund
operations, operating costs have been substantially decreased by moving the
corporate headquarters to South Florida. Additional funds received from the
proceeds from the Rule 504 Reg D stock sales should allow the
20
<PAGE>
Company to achieve some growth in sales and accounts receivable. The Company is
seeking additional capital from private sources to resume its previous rapid
growth plans.
FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK
Bullhide operates in a rapidly changing environment that involves
numerous risks, some of which are beyond Bullhide's control. The following
discussion highlights some of these risks.
HISTORY OF LOSSES AND GOING CONCERN QUALIFICATION. Bullhide has
incurred substantial losses since its inception, and may continue to incur
substantial losses in the future. In particular, Bullhide incurred losses of
$337,592 in the first nine months of fiscal 1999, $951,911 in fiscal 1999 and
$546,082 in fiscal 1998. The footnotes to our financial statements for the
fiscal 1999 and fiscal 1998, include an explanatory paragraph relating to the
uncertainty of Bullhide's ability to continue as a going concern. There is no
assurance that we will ever be profitable.
NEED FOR ADDITIONAL CAPITAL TO EXECUTE BULLHIDE'S BUSINESS STRATEGY.
Bullhide will need to raise additional funds for operations to execute its
business strategy. One of Bullhide's business strategies is to increase sales of
its master distributor agreements. There can be no assurances that any such
additional financing will be available to Bullhide on commercial reasonable
terms, or at all. In light of Bullhide's limited resources, its anticipated
expenses and the competitive environment in which it operates, any inability to
obtain additional financing, will slow down Bullhide's efforts to expand its
business. The sale of additional equity, convertible preferred securities or
convertible debt securities will result in additional dilution to Bullhide's
shareholders. If additional funds are raised through the issuance of debt
securities, these securities could have certain rights senior to holders of
Bullhide's common stock, and could contain covenants that restrict Bullhide's
operations.
NO ASSURANCES THAT BULLHIDE'S OPERATIONS WILL EVER BE PROFITABLE.
Bullhide's ability to become profitable largely depends on (1) its ability to
sell its master distribution agreements and dealerships, (2) the ability of its
distributors to sell Bullhide's products to end-users and (3) Bullhide's ability
to cut costs. However, there can be no assurances that Bullhide will be able to
identify persons who want to purchase master distribution and dealership
agreements and that Bullhide's distributors will be able sell Bullhide's
products to end-users. Moreover, there are no assurances that Bullhide will be
able to cut its operating expenses. The problems and expenses frequently
encountered in developing a business and the competitive industry in which
Bullhide operates will impact whether it is successful. Furthermore, Bullhide
may encounter substantial delays and unexpected expenses related to production,
marketing, regulatory matters or other unforeseen difficulties.
COMPETITIVE ENVIRONMENT IN THE SPRAY ON TRUCK BEDLINER MARKET AND FOR
INDUSTRIAL USES OF BULLHIDE'S PRODUCTS. Competition in the spray on truck
bedliner market is highly concentrated among a small number of suppliers.
Management believes there are four primary competitors - Rhino Linings, Linex,
Perma-Tech and Arma Coating. The rest of the market is fragmented among several
start-up companies, who in the opinion of management have either an inferior
product, application equipment and/or technique. All spray application
competitors combined have captured no more than 10% of the new truck market and
5% of the used truck market. Bullhide's management does not believe that there
are any direct competitors for industrial uses of its products. However, there
are not many barriers to enter the spray-on-truck liner market or the industrial
product market. If new companies enter these markets and introduce new
21
<PAGE>
competitive products, it can have a material adverse effect on Bullhide's gross
revenues and net income.
CONCENTRATION OF STOCK OWNERSHIP. Bullhide's present officers and
directors beneficially own approximately 57.1% of the outstanding common stock
and 100% of the Bullhide's issued and outstanding preferred stock. The common
stock and preferred stock have one vote on each matter. As a result, current
management will be substantially able to exercise significant influence over all
matters requiring shareholder approval, including the election of directors and
approval of significant corporate transactions.
DEPENDENCE ON KEY MANAGEMENT. Bullhide's success largely depends on a
number of key employees. The loss of services or one or more of these employees
could have a material adverse effect on Bullhide's business. Bullhide is
especially dependent upon the efforts and abilities of certain of its senior
management, particular Ronald Grossman, its Chairman and Chief Technology
Officer. The loss of Mr. Grossman or any of its key executives could have a
material adverse effect on Bullhide and its operations and prospects. Bullhide
has no key man insurance on Mr. Grossman. Bullhide believes that its future
success will also depend, in part, upon its ability to attract, retain and
motivate qualified personnel. There is no assurance, however, that Bullhide will
be successful in attracting and retaining such personnel. See "Management."
NO DIVIDENDS. Bullhide expects that it will retain all available
earnings generated by our operations for the development and growth of our
business. Accordingly, Bullhide does not anticipated paying any cash dividends
on its common stock
DILUTION. Bullhide's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. As
of February 17, 2000, Bullhide has 10,612,051 shares of its common stock issued
and outstanding and 60,000 shares of preferred stock issued and outstanding.
Bullhide's Board has the ability, without further shareholder approval, to issue
up to 39,387,949 additional shares of common stock and up to 4,940,000 shares of
preferred stock, with preferences designed by the Board of Directors. Any such
issuance may result in a reduction of the book value or market price, if any of
the outstanding common or preferred shares. Issuance of the additional common
stock will reduce the proportionate ownership and voting power of the then
existing shareholders. In addition, Bullhide's preferred stock is issuable in
series which may vary as to voting power, preferential dividend rate, redemption
terms and policies, liquidation preferences, conversion rights and sinking fund
requirements. Issuance of additional preferred shares may have an adverse effect
on the value of Bullhide's outstanding common stock. See "Description of
Securities."
ANTI-TAKEOVER PROVISIONS. The foregoing provision in Bullhide's
Articles of Incorporation (namely the ability, without further shareholder
approval) to issue additional shares of common stock and/or preferred stock with
rights and preferences determined by the Board of Directors could be used as
anti-takeover measures. These provisions could prevent or discourage or delay a
non-negotiated change in control and result in shareholders receiving less for
their common stock than they otherwise might in the event of a takeover attempt.
See "Description of Securities."
TRADING ACTIVITY (IF ANY) MAY BE REDUCED IF "PENNY STOCK" RULES APPLY.
Bullhide's common stock is considered a low priced security under rules
promulgated under Securities Exchange Act of 1934 (the "Exchange Act"). Under
these rules, broker-dealers participating in transactions in low priced
securities must first deliver a risk disclosure document which describes risks
associated with such stocks, the broker-dealer's duties, the customer's rights
and remedies, certain market and other information, and make a suitability
determination approving the customer for low priced stock transactions based on
financial situation, investment
22
<PAGE>
experience and objectives. Broker-dealers must also disclose these restrictions
in writing, provide monthly account statements to the customer, and obtain
specific written consent of the customer. With these restrictions, the likely
effect of designation as a low priced stock is to decrease the willingness of
broker-dealers to make a market for the stock, to decrease the liquidity of the
stock and increase the transaction cost of sales and purchases of such stocks
compared to other securities.
NO ASSURANCE OF A LIQUID PUBLIC MARKET FOR THE SHARES. Bullhide's
common stock is quoted on the National Quotation Bureau Pink Sheets (the "Pink
Sheets"). The Pink Sheets are a highly limited market and are subject to
substantial restrictions and limitations. To date, there has not been an active
market in Bullhide's stock. Bullhide cannot predict the extent to which investor
interest in Bullhide will lead to the development of a trading market or how
liquid that trading market might become. If a trading market does not develop or
is not sustained, it may be difficult for investors to sell shares of Bullhide's
common stock at a price that is attractive. As a result, an investment in
Bullhide's common stock may be totally illiquid and investors may not be able to
liquidate their investment readily or at all when he/she desires to sell.
YEAR 2000 READINESS
Bullhide has completed an assessment of whether its systems and those
of third parties which could have a material impact on its business will
function properly with respect to dates in 2000 and thereafter. Bullhide has
determined that none of its systems require modification. Bullhide believes the
only third parties (which includes its customers and vendors) that could have a
material impact on its business are the major financial institutions that
process its collections of accounts receivables and monthly dues by the
electronic payment methods. Bullhide believes these financial institutions are
currently working on modifications to their internal systems to insure these
systems will function properly with respect to dates in 2000 and thereafter and
expects these modifications will be completed in 1999. Bullhide does not
anticipate that noncompliance, if any, with Year 2000 of any non-information
technology systems, such as embedded micro controllers, will materially or
adversely affect its business. Bullhide is currently undertaking an analysis of
worst-case scenarios and developing contingency plans to deal with these
scenarios.
As of February 17, 2000, Bullhide has not experienced any problems
association with Year 2000 issues.
23
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Bullhide is involved in a legal proceeding with a former franchisee
regarding an agreement for Bullhide to repurchase the franchise. Bullhide
stopped making payments under the agreement based upon an alleged breach of the
agreement by the former franchisee. When mediation of the dispute failed, the
former franchisee filed suit for payment and for certain consequential damages.
Bullhide is defending the suit and believes that, while Bullhide may be
ultimately liable for the payments required under the agreement, the claims for
damages are without merit.
Bullhide is involved in another legal proceeding with a former dealer
whose business failed. The former dealer has brought suit against Bullhide
alleging breach of contract, fraud and violation of the Tennessee Consumer
Protection Act. Bullhide believes the allegations to be without merit and is
vigorously defending the lawsuit.
ITEM 2. CHANGES IN SECURITIES
24
<PAGE>
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
A. Exhibits
27.1 Financial Data Schedule
B. Reports on Form 8-K
None
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 18, 2000 BULLHIDE CORPORATION
By /s/ RONALD GROSSMAN
---------------------------------
Ronald Grossman
Chairman and Chief Technology Officer
26
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 237,987
<ALLOWANCES> 65,000
<INVENTORY> 18,749
<CURRENT-ASSETS> 201,859
<PP&E> 24,805
<DEPRECIATION> 20,777
<TOTAL-ASSETS> 241,830
<CURRENT-LIABILITIES> 559,952
<BONDS> 0
0
60,000
<COMMON> 21,224
<OTHER-SE> (337,701)
<TOTAL-LIABILITY-AND-EQUITY> 241,830
<SALES> 989,245
<TOTAL-REVENUES> 989,245
<CGS> 659,905
<TOTAL-COSTS> 617,659
<OTHER-EXPENSES> 8,904
<LOSS-PROVISION> 45,000
<INTEREST-EXPENSE> 8,904
<INCOME-PRETAX> (337,592)
<INCOME-TAX> 0
<INCOME-CONTINUING> (337,592)
<DISCONTINUED> (40,369)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (337,592)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
