4
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________to
___________________
Commission File Number: 000-26953
BACH-HAUSER, INC.
(Exact name of Registrant as specified in its Charter)
Nevada 88-0390697
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or organization)
3675 Pecos-McLeod, Suite 1400, Las Vegas, NV 89121
(Address of principal executive offices)
(702) 866-2500
(Registrant's telephone number)
(Former Name, Former Address and Former Fiscal Year, if changed
since last Report)
Check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes No X
As of September 30, 1999, 19,500,000 shares of the issuer's
common stock were outstanding.
Transitional Small Business Disclosure Format (check one): Yes
No X
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements and supplemental data required by this
Item follow the index of financial statements appearing at Item 6
of this Form 10Q-SB.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, those expectations reflected in forward-looking
statements contained in this Statement.
Plan of Operation
Originally the Company's primary focus was to seek a viable
company or companies with whom it could merge or acquire. On
September 3, 1999, the Company announced that it had entered into
a licensing agreement with TCR Environmental Corp, a corporation
incorporated under the laws of the Province of Ontario, Canada.
TCR is engaged in the design, construction, the equipping and
operation of waste management facilities for the recycling,
composting and disposing of municipal and institutional solid
waste, and the sale or other disposition of the resultant compost
and recycled products. TCR currently operates a waste-processing
facility in the Town of Aylmer, in the Province of Ontario,
Canada, which will serve as a model for the turn-key waste-
processing facility proposed by TCR to be manufactured and
marketed throughout the world.
Under the terms of the agreement, the Company was granted the
exclusive license to distribute, use and sell the products
throughout the world, with the exception of Canada, and to use
the information and knowledge of TCR in conjunction with the
products. The agreement also grants the Company the exclusive
rights to use and exploit the information and knowledge in the
distribution of the products. The agreement is to remain in full
force and effect for a period of 25 years, with an option to
extend the term for a period of 25 years. As consideration for
the license, the Company issued 4,500,000 shares of its common
stock to TCR.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below. The
Company is still in its development stage and has not generated
any revenues.
The Company's plan of operation is to provide customers with the
highest quality service to meet their specific needs for the cost-
effective processing, recycling and disposal of municipal,
industrial, commercial and institutional solid waste and to meet
landfill reduction goals.
Through the licensing agreement, the Company, through the TCR
Total Recycling System, is able to offer municipalities and
counties with a population of 100,000 or more an affordable
environmental solution to waste disposal, including a waste
management plant which incorporates the collection and processing
of waste into three streams:
1. recyclables
2. organic compostables
3. residuals (for landfill or waste-to-energy recovery)
The TCR Total Recycling System is a two-bag system. It differs
from conventional waste management and recycling methods in that
the custom-built recovery facility receives mixed loads of
municipal, commercial and industrial sold waste contained in both
Blue and Black Bags. The use of a two-bag system provides a
simple, efficient and cost-effective solution to waste
management. Blue Bags (recyclable items) allow easy
identification and total recovery of assets, while the opening
and sorting of Black Bag contents (balance of the waste stream)
ensures total recovery of recyclable items which would otherwise
be lost to landfill.
Municipal waste is received in the materials recovery facility
and is separated into two processing categories - recyclables and
household waste. Blue Bag contents (recyclables) are sorted and
conveyed to a baler further processing, then internally brokered
to end users. Black Bag contents (wet waste) are sorted to
recover any recyclable material and processed to remove non-
compostable contaminants.
Any organic material retrieved from sorting Black Bag contents is
conveyed to a low speed, high torque shredder. The organic
material, cut to optimize size for composting, is then conveyed
to a high speed composting unit. Computerized control and
monitoring of the compost, by a computer-controlled robot which
turns and irrigates the material, ensures specific conditions are
maintained throughout the 28-day composting process. The Company
monitors moisture content, temperature, pH, oxygen, and carbon to
nitrogen ratios to ensure optimum conditions for anaerobic
decomposition and the elimination of human/plant pathogens.
Water that comes into contact with any stage of the compost
process (ie. Storm water from curing pad) is kept onsite to
eliminate impacts, stored in a retention pond, and used back in
the process to ensure optimum moisture levels. Odor control is
maintained through the use of enzymatic mist, hygiene, and an
award winning bio-filter system. The stabilized compost is then
tested and stockpiled before being shipped to end users. The end
result is high quality compost which can be supplied to customers
at a very attractive price.
Management believes that the TCR Total Recycling System
dramatically increases the amount of recyclable material
recovered while eliminating the need for different collection
trucks, specialized equipment and Blue Boxes. With its potential
for an 80% diversion away from landfill, the Company's
alternative to the costly and ineffective Blue Box program
reduces long-term maintenance costs for existing landfill sites.
In conventional systems, many recyclable items and organic
compostables are lost when the traditional Black Bag goes
directly to landfill. The TCR Total Recycling System ensures
improperly disposed items are recovered.
Current Trends
Current trends show that stakeholder roles and responsibilities
are changing. As government budgets continue to be down-sized,
industry is increasingly being expected to contribute solutions
through stewardship initiatives. While corporations are re-
assessing their waste production and disposal attitudes, they are
looking for opportunities to divert waste away from landfill and
towards more responsible alternatives. In addition, there is a
more informed, concerned and involved public which is also
playing a key role in the evolution of the waste management
industry.
The most obvious reasons for recycling are the environmental
benefits. Using recycled rather than virgin materials uses less
energy, emits less pollution and reduces the use of non-renewable
resources. Producing compost reduces pollution and provides a
capable soil amendment. Land uses have made soil susceptible to
processes that diminish its organic content.
A soil's organic content is essential for retaining moisture,
aiding water infiltration, retaining carbon, nutrient storage and
supply, cation exchange, and structural stability to combat
erosion and compaction. Compost from municipal waste has shown to
be a capable amendment. Furthermore, compost used on agricultural
land has shown to improve crop resistance to disease.
The demand for compost is high, with markets existing in
agriculture (mixed into the soil or as a mulch on farms, as a
peat substitute in greenhouses), nurseries, landscaping, land
reclamation, golf courses, and the gardening industry. A survey
conducted by the Composting Council in Canada showed that 70% of
respondents either agreed or strongly agreed that compost made
from municipal waste is an acceptable product.
The alternatives to landfill, recycling, and composting, is
incineration. With incineration, the left-over residue material
is classified as hazardous waste and must itself be dumped. At
the same time there is increasing public opposition to air
pollution associated with incineration. However recent
innovations have shown that with high enough temperatures and
improved scrubbing, incineration is potentially viable.
Another noticeable trend involves transportation issues. The
design of the next generation of waste collection vehicles and
systems is being studied carefully. The ability to use on vehicle
to collect more than one stream of waste materials simultaneously
(i.e., one truck to collect recyclables, organics and garbage) is
very attractive and represents considerable savings in fuel,
maintenance and other related costs. There are, of course,
additional environmental benefits associated with reduce fuel
consumption and lower levels of air pollution. Management
believes that the TCR Total Recycling System provides
municipalities with a foolproof method of meeting government
mandates for diverting from landfill by 50%, while converting
recyclable solid waste into marketable commodities. Management
believes that the system provides a solution to the environmental
problems that befall the traditional methods of waste disposal.
Competition
Most competitors either operate a blue box MRF and a centralized
compost facility or a wet-dry facility. Those that operate a blue
box MRF and centralized compost facility do not have the ability
to sort mixed waste. Those companies that operate a wet-dry
facility have demonstrated comparable processing volumes with
lesser diversion percentages, and cost taxpayers millions. As
most competitors have not constructed and/or operated facilities
that allow for a totally integrated system, management believes
the Company is left with a sales and marketing advantage.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company, and since the Company currently has no operating
business and does not use any computers, and since it has no
customers, suppliers or other constituents, it does not believe
that there are any material year 2000 issues to disclose in this
Form 10Q-SB.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities.
With respect to the issuances and transfers made, the Registrant
relied on Section 4(2) of the Securities Act of 1933, as amended.
No advertising or general solicitation was employed in offering
the shares. The securities were offered for investment only and
not for the purpose of resale or distribution, and the transfer
thereof was appropriately restricted.
During August 1999, the Company issued 4,500,000 shares of its
common stock pursuant to the terms of the licensing agreement
with TCR Environmental Corp. valued at $0.001 per share.
In general, under Rule 144 adopted pursuant to the Securities Act
of 1933, a person (or persons whose shares are aggregated) who
has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of
shares which does not exceed the greater of one percent of the
then outstanding Common Stock or the average weekly trading
volume during the four calendar weeks prior to such sale. Rule
144 also permits, under certain circumstances, the sale of shares
without any quantity limitation by a person who has satisfied a
two-year holding period and who is not, and has not been for the
preceding three months, an affiliate of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No such matters were submitted during the most recent quarter.
ITEM 5. OTHER INFORMATION
Subsequent Events
On April 24, 2000, the Company approved reorganizing the capital
structure by forward splitting the outstanding shares of the
corporation on a 2:1 basis. The forward split had a net result of
39,000,000 shares issued and outstanding.
On May 1, 2000 and May 10, 2000, the Board of Directors adopted
resolutions to issue 400,000 shares of common stock as partial
payments for legal services rendered to the Company. The stock
was issued pursuant to the filing of Forms S-8 with the
Securities and Exchange Commission.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
FINANCIAL STATEMENTS
Unaudited financial statements for the quarter ended
September 30, 1999.
BACH-HAUSER, INC.
(A Development Stage Company)
BALANCE SHEETS (UNAUDITED)
<TABLE>
<S> <C> <C>
September 30 December 31,
------------- ------------
1999 1998
ASSETS ------------ ------------
OTHER ASSETS
Intangible assets $ 4,500 $ -
------------ ------------
TOTAL ASSETS $ 4,500 $ -
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
CURRENT LIABILITIES - officers advances $ 1,075 $ 1,075
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, $.001 par value;
50,000,000 shares authorized;
shares issued and outstanding at
December 31, 1998 - 30,000,000 shares - 6,000
September 30, 1999 - 39,000,000 shares 10,500 -
Deficit accumulated during the development
stage (7,075) (7,075)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 3,425 (1,075)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $ 4,500 $ -
</TABLE> ============ ===========
The accompanying notes are an integral part of the financial
statements
-1-
BACH-HAUSER, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C> <C>
For the
Period from
October 10,
1995
(inception)
For the Nine Months For the Three Months to
Ended Ended September
September 30, September 30, 30,
----------------------- ----------------------- -----------
1999 1998 1999 1998 1999
---------- ------------ ------------ ---------- -----------
REVENUE $ - - $ - $ - $ -
GENERAL, SELLING AND ADMINISTRATIVE
EXPENSES - 1,075 - 725 7,075
---------- ---- ------- ------------ --------- -----------
LOSS BEFORE TAXES - (1,075) - (725) (7,075)
PROVISION FOR INCOME TAXES - - - - -
---------- -- --------- ------------ --------- -----------
NET LOSS $ - $ (1,075) $ - $ (725) $ (7,075)
========== =========== =========== ========== ===========
NET LOSS PER COMMON SHARE - basic and
diluted $ (.00) $ (.00) $ (.00) $ (.00) $ (.00)
========== =========== =========== ========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - basic and diluted 35,000,000 30,000,000 39,000,000 30,000,000 30,937,500
========== =========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-2-
BACH-HAUSER, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY) (UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
Deficit
Accumulated
Common Stock During
---------------------------- Development
Shares Amount Stage Total
------------- ------------- ------------ -----------
Balance at December 31,
1995 30,000,000 $ 6,000 $ (6,000) $ -
Net income (loss) - - - -
------------- ------------- ------------ ------------
Balance at December 31,
1996 30,000,000 6,000 (6,000) -
Net income (loss) - - - -
------------- ------------- ------------ ------------
Balance at December 31,
1997 30,000,000 6,000 (6,000) -
Net income (loss) - - (1,075) (1,075)
------------- ------------- ------------ ------------
Balance at December 31,
1998 30,000,000 6,000 (7,075) (1,075)
Stock issued for
intangibles 9,000,000 4,500 - 4,500
Net income (loss) - - - -
------------- ------------- ------------ ------------
Balance at September 30,
1999 39,000,000 $ 10,500 $ (7,075) $ 3,425
============ ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
-3-
BACH-HAUSER, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
For the
Period from
October
10, 1995
For the nine months ended (inception)
September 30, to
-------------------------- September 30,
1999 1998 1999
------------ ------------- ------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $ - $ (1,075) $ (7,075)
Changes in Assets and Liabilities
Increase in advances payable - 1,075 1,075
------------ ------------- ------------
Net Cash Used in Operating Activities - - 6,000
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Issuance of common stock for cash - - 6,000
------------ ------------- ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS
- beginning of period - - -
------------ ------------- ------------
CASH AND CASH EQUIVALENTS
- end of period $ - $ - $ -
============ ============ ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year -
Interest paid $ - $ - $ -
============ ============ ===========
Income taxes paid $ - $ - $ -
============ ============ ===========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCIAL ACTIVITIES:
During the nine months ended September 30, 1999:
Common stock totaling 4,500,000 shares were issued to
acquire the worldwide rights to TCR Environmental Corp.'s
proprietary waste management /conversion system.
The accompanying notes are an integral part of the financial
statements.
-4-
BACH-HAUSER, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING
POLICIES
a) Nature of Operations
Bach-Hauser, Inc.
("Company") is currently a development stage company
under the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 7. The Company
was incorporated under the laws of the State of
Nevada on October 10, 1995.
b) Basis of Presentation
The accompanying financial statements have be
en prepared in conformity with generally accepted
accounting principles, which contemplate
continuation of the Company as a going concern.
However, the Company has no established source of
revenue. This factor raises substantial doubt about
the Company's ability to continue as a going
concern. Without realization of additional capital,
it would be unlikely for the Company to continue as
a going concern. The financial statements do not
include any adjustments relating to the
recoverability and classification of recorded asset
amounts, or amounts and classification of
liabilities that might be necessary should the
Company be unable to continue in existence.
c) Earnings Per Share
The computation of primary earnings per share
is based on the weighted average number of
outstanding common shares during the period.
On April 24, 2000, the Company effected a 2 f
or 1 stock split. All share and per share amounts
presented in the financial statements give
retroactive effect to this stock split.
NOTE 2 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or
personal property. A director provides office
services without charge. Such costs 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 the future, become
involved in other business opportunities. If a
business opportunity becomes available for the
Company, such persons may face a conflict in
selecting between the Company and their other
business interests. The Company has not formulated a
policy for the resolution of such conflicts.
- 5 -
BACH-HAUSER, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
NOTE 3 - INCOME TAXES
The reconciliation of the effective income tax rate
to the federal statutory rate is as follows:
<TABLE>
<S> <C> <C> <C>
For the
Period from
October 10,
1995
(inception)
September 30, to
------------------------ September 30,
1999 1998 1999
----------- ----------- ------------
Federal Income Tax Rate 34.00 % 34.00 % 34.00 %
Effect of Valuation Allowance (34.00)% (34.00)% (34.00) %
----------- ----------- ------------
Effective Income Tax Rate 0.00 % 0.00 % 0.00 %
=========== =========== ==========
</TABLE>
Deferred tax assets and liabilities reflect the net
effect of temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes and amounts used for income tax
purposes. Significant components of the Company's
deferred tax assets and liabilities are as follows:
<TABLE>
<S> <C> <C> <C>
For the
Period from
October 10,
1995
(inception)
September 30, to
------------------------ September 30,
1999 1998 1999
----------- ----------- ------------
Net operating loss
carry forward $ 2,406 $ 2,406 $ 2,406
Valuation allowance (2,406) (2,406) (2,406)
----------- ----------- ------------
Net deferred tax asset $ - $ - $ -
=========== =========== ==========
</TABLE>
At September 30, 1999, the Company has provided a
valuation allowance for the deferred tax asset since
management has not been able to determine whether
that asset is realizable. The net change in the
valuation allowance for the nine months ended
September 30, 1999 and 1998 increased by $-0- and
$365, respectively. Net operating loss carryforwards
expire in various amounts in 2015 and 2019.
-6-
BACH-HAUSER, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998
NOTE 4 - INTANGIBLE ASSETS
Intangible assets consist of property rights which
will be amortized over an estimated useful life of ten
years.
NOTE 5 - STOCKHOLDERS' EQUITY (DEFICIENCY)
Year 1999 Forward Stock Split
On April 29, 1999, the Board of the Company authorized
an amendment to the Company's Articles of
Incorporation approving a forward stock split of the
outstanding shares of the Common Stock on the basis of
two-and-a-half new shares of Common Stock for each
share of outstanding Common Stock. The Amendment was
approved at the Special Meeting of the Board of
Directors held on April 29, 1999. This action did not
change the par value of the common Stock of $.001 per
share or the number of authorized shares of the Common
Stock from 50,000,000.
Recent Issuances of Common Stock
On April 29, 1999, the Board of Directors approved the
issuance of 4,500,000 shares to purchase the worldwide
(excluding Canada) rights to TCR Environmental Corp.'s
proprietary waste management/conversion system.
NOTE 6 - SUBSEQUENT EVENTS
Legal Consulting Plans
On May 1, 2000 and May 10, 2000, the Board of
Directors adopted resolutions to issue 400,000 shares
of common stock as partial payments for legal
services rendered to the Corporation. The stock will
be issued pursuant to the filing of Form S-8 with the
Securities and Exchange Commission.
Stock Split
On April 24, 2000, the Board of Directors authorized
a 2 for 1 stock split.
-7-
EXHIBITS
a) The exhibits, consisting of the Company's Articles of
Incorporation are attached to the Company's amended Form 10-SB,
filed on August 13, 1999. These exhibits are incorporated by
reference to that Form.
b) The exhibits, consisting of the Company's Bylaws are
attached to the Company's amended Form 10-SB, filed on August 13,
1999. These exhibits are incorporated by reference to that Form.
c) The report on Form 8-K regarding the resignations of the
officers and directors, filed on June 22, 2000.
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.
Dated June 16, 2000
BACH-HAUSER, INC.
By:
Peter Preston
President
