FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT
OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2002.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________.
COMMISSION FILE NUMBER 0-32801
DATE OF REPORT: MAY 6, 2002
BERT LOGIC INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-2034750
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
UNIT 130 2188 NO. 5 RD
RICHMOND, BRITISH COLUMBIA V6X 2T1, CANADA
(604) 276 8324
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
The number of outstanding shares of the issuer's common stock, $0.0001 par
value, as of April 30, 2002 was 6,000,000.
TABLE OF CONTENTS
PART I
Item 1. Financial Statements........................................1
Item 2. Plan Of Operation............................................7
PART II
Item 6 Exhibits and Reports on Form 8-K..............................9
Signatures...........................................................9
[This Space Has Been Intentionally Left Blank]
PART I
ITEM 1. FINANCIAL STATEMENTS
Unaudited Interim Balance Sheet At April 30, 2002 And Audited Balance Sheet
At July 31, 2001..............................................................1
Unaudited Interim Statement Of Operations For The Three Months Ended
April 30, 2002 And 2001, For The Nine Months Ended April 30, 2002 And
2001 And For The Period May 31, 2000 (Date Of Inception) To April 30, 2002....2
Unaudited Interim Statement Of Cash Flows For The Nine Months Ended
April 30, 2002 And 2001.......................................................3
Notes To Unaudited Interim Financial Statements...............................4
[This Space Has Been Intentionally Left Blank]
BERT Logic Inc.
(A Development Stage Company)
Interim Balance Sheets
April 30, July 31,
2002 2001
$ $
(unaudited) (audited)
ASSETS
Current Assets
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,259 37,262
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . 2,225 1,850
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 285 -
Total Current Assets. . . . . . . . . . . . . . . . . . . . . . . . 11,769 39,112
License (Note 3)
Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 15,000
Accumulated amortization. . . . . . . . . . . . . . . . . . . . . . (17,014) (4,723)
22,986 10,277
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,755 49,389
LIABILITIES
Current Liabilities
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 1,104 4,588
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . 1,104 4,588
Notes Payable (Note 4). . . . . . . . . . . . . . . . . . . . . . . 18,474 -
Shareholder Loan (Note 5) . . . . . . . . . . . . . . . . . . . . . 2,442 15,000
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 22,020 19,588
STOCKHOLDERS' EQUITY
Stockholders' Equity
Common Stock: 100,000,000 common shares authorized with a par
value of $0.0001; 6,000,000 issued and outstanding. . . . . . . . . 600 600
Additional Paid-in Capital. . . . . . . . . . . . . . . . . . . . . 49,400 49,400
Donated Capital (Note 6). . . . . . . . . . . . . . . . . . . . . . 26,250 15,000
76,250 65,000
Preferred Stock: 20,000,000 preferred shares authorized with a par
value of $.0001; none issued. . . . . . . . . . . . . . . . . . . . - -
Deficit Accumulated During the Development Stage. . . . . . . . . . (63,515) (35,199)
Total Stockholders' Equity. . . . . . . . . . . . . . . . . . . . . 12,735 29,801
Total Liabilities and Stockholders' Equity. . . . . . . . . . . . . 34,755 49,389
Contingent Liability (Note 1)
The accompanying notes are an integral part of these interim financial
Statements
1
BERT Logic Inc.
(A Development Stage Company)
Interim Statements of Operations
(unaudited)
Accumulated from Three Months Nine Months
May 31, 2000 Ended Ended
(Date of Inception) April 30, April 30,
to April 30, 2002 2002 2001 2002 2001
$ $ $ $ $
-------------------- ---------------------------- ----------------------
Sales. . . . . . . . . . . . . . . . 89,041 4,250 - 75,041 -
Cost of Goods Sold . . . . . . . . . 43,925 2,025 - 37,275 -
-------------------- ---------------------------- ----------------------
Gross Margin . . . . . . . . . . . . 45,116 2,225 - 37,766 -
-------------------- ---------------------------- ----------------------
Expenses
Amortization . . . . . . . . . . . . 17,014 5,683 - 12,291 -
Communication. . . . . . . . . . . . 5,943 53 - 1,162 -
Consulting (Note 7). . . . . . . . . 38,000 3,000 - 24,000 1,000
Interest and bank charges. . . . . . 923 17 - 141 -
Professional fees. . . . . . . . . . 28,501 3,961 648 13,238 1,213
Marketing. . . . . . . . . . . . . . 13,000 - - 13,000 -
Rent . . . . . . . . . . . . . . . . 5,250 750 - 2,250 -
-------------------- ---------------------------- ----------------------
108,631 13,464 648 66,082 2,213
-------------------- ---------------------------- ----------------------
Net Loss for the Period. . . . . . . (63,515) (11,239) (648) (28,316) (2,213)
Deficit - Beginning of Period. . . . - (52,276) (4,784) (35,199) (3,640)
-------------------- ---------------------------- ----------------------
Deficit - End of Period. . . . . . . (63,515) (63,515) (5,432) (63,515) (5,853)
===================== ============================ =====================
Net Loss Per Share - Basic - - - -
===================== ============================ =====================
Weighted Average Shares Outstanding 6,000,000 5,000,000 6,000,000 5,000,000
===================== ============================ =====================
The accompanying notes are an integral part of these interim financial
Statements
2
BERT Logic Inc.
(A Development Stage Company)
Interim Statements of Cash Flows
(unaudited)
Nine Months
Ended
April 30,
2002 2001
$ $
Cash Flows To Operating Activities
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,316) (2,213)
Non-cash items
Amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . 12,291 -
Donated consulting services . . . . . . . . . . . . . . . . . . . 9,000 -
Donated rent. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,250 -
Adjustments to reconcile net loss to cash
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . (375) -
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . (285) -
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . (3,484) (4,228)
- ------------------------------------------------------------------------------------------
Net Cash Used In Operating Activities . . . . . . . . . . . . . . (8,919) (6,441)
- ------------------------------------------------------------------------------------------
Cash Flows From Financing Activity
Repayment of notes payable. . . . . . . . . . . . . . . . . . . . (6,526) -
Due to shareholder. . . . . . . . . . . . . . . . . . . . . . . . (12,558) -
- ------------------------------------------------------------------------------------------
Net Cash Provided By Financing Activity . . . . . . . . . . . . . (19,084) -
- ------------------------------------------------------------------------------------------
Net Decrease in Cash. . . . . . . . . . . . . . . . . . . . . . . (28,003) (6,441)
Cash - Beginning of Period. . . . . . . . . . . . . . . . . . . . 37,262 15,000
- ------------------------------------------------------------------------------------------
Cash - End of Period. . . . . . . . . . . . . . . . . . . . . . . 9,259 8,559
==========================================================================================
Non-Cash Financing Activities
Licenses were purchased pursuant to notes payable (Notes 3 and 4) 25,000 -
==========================================================================================
Supplemental Disclosures
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . - -
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . - -
==========================================================================================
The accompanying notes are an integral part of these interim financial
Statements
3
BERT Logic Inc.
(A Development Stage Company)
Notes to the Interim Financial Statements
For the Nine Months Ended April 30, 2002
(unaudited)
Development Stage Company
The Company was incorporated under the laws of the state of Washington on May
31, 2000. On May 31, 2000 the Company entered into a licensing agreement with
Reach Technologies, Inc. a Canadian Corporation. The agreement allows the
Company to sell a Bit Error Rate Tester product line on a world wide exclusive
basis.
The Company's principal business plan is to seek immediate earnings by
exploiting the license agreement with Reach Technologies, Inc. The Company has
started selling the Bit Error Rate Tester product line.
The Company is in the development stage. In a development stage company,
management devotes most of its activities in developing a market for its
products. Planned principal activities have not yet begun to produce significant
revenues. The ability of the Company to emerge from the development stage with
respect to any planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and/or attain profitable
operations. There is no guarantee that the Company will be able to raise any
equity financing or sell any of its products at a profit. There is substantial
doubt regarding the Company's ability to continue as a going concern.
The Company completed an SB-2 Registration Statement filed with the United
States Securities Exchange Commission April 30, 2001 and raised $40,000 and
issued 1,000,000 common shares.
2. Summary of Significant Accounting Principles
a) Year End
The Company's fiscal year end is July 31.
b) Use of 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.
c) Basic Earnings (Loss) Per Share
Basic earnings (loss) per share have been calculated in conformity with
Financial Accounting Standards Board Statement No. 128 "Earnings per Share". The
Company has a simple capital structure without potential common shares. Basic
earnings (loss) per share is calculated on the weighted average number of common
shares outstanding each year.
d) License
The cost to acquire a license was capitalized. The costs will be amortized on a
straight-line basis over three years.
The carrying value of the License is evaluated in each reporting period to
determine if there were events or circumstances which would indicate a possible
inability to recover the carrying amount. Such evaluation is based on various
analyses including assessing the Company's ability to bring the commercial
applications to market, related profitability projections and undiscounted cash
flows relating to each application which necessarily involves significant
management judgment. Where an impairment loss has been determined the carrying
amount is written-down to fair market value. Fair market value is determined as
the amount at which the license could be sold in a current transaction between
willing parties.
4
BERT Logic Inc.
(A Development Stage Company)
Notes to the Interim Financial Statements
For the Nine Months Ended April 30, 2002
(unaudited)
2. Summary of Significant Accounting Principles (continued)
e) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.
f) Revenue
Revenue from sales of the Bit Error Rate Testers will be recognized when goods
have been shipped and collectibility is reasonably certain.
g) Income Taxes
The Company has adopted the provisions of Financial Accounting Standards Board
Statement No. 109 (SFAS 109), Accounting for Income Taxes.
Pursuant to SFAS 109 the Company is required to compute tax asset benefits for
net operating loss carry forwards. Potential benefit of net operating losses has
not been recognized in the financial statements because the Company cannot be
assured that it is more likely than not that it will utilize the net operating
loss carry forwards in future years.
The Company has a tax loss of $24,859 to offset future years taxable income
expiring in fiscal 2015, 2016 and 2017.
The components of the net deferred tax asset, the statutory tax rate, the
effective tax rate and the elected amount of the valuation allowance are
scheduled below:
2002 2001 2000
$ $ $
Net Operating Losses . 9,383 11,248 4,228
Statutory Tax Rate . . 34% 34% 34%
Effective Tax Rate . . - - -
Deferred Tax Asset . . 3,190 3,824 1,438
Valuation Allowance. . (3,190) (3,824) (1,438)
Net Deferred Tax Asset - - -
h) Interim Financial Statements
These interim unaudited financial statements have been prepared on the same
basis as the annual financial statements and in the opinion of management,
reflect all adjustments, which include only normal recurring adjustments,
necessary to present fairly the Company's financial position, results of
operations and cash flows for the periods shown. The results of operations for
such periods are not necessarily indicative of the results expected for a full
year or for any future period.
5
BERT Logic Inc.
(A Development Stage Company)
Notes to the Interim Financial Statements
For the Nine Months Ended April 30, 2002
(unaudited)
3. License
The Company acquired the worldwide exclusive right to market and sell a Bit
Error Rate Tester product line (the "License"). The licensed product consists of
0 to 40 Megabit per second Bit Error Rate Testers that are configured for
laboratory and onsite use. Models consist of laboratory, rack mount and portable
versions. The licensor maintains the right to set the pricing of the licensed
products. An initial licensing agreement was acquired on May 31, 2000 with a
three year term and amendments have been made to expand the territory of the
license. All other terms of the License remain the same. The license was
purchased by the Company for $10,000 cash from Reach Technologies, Inc. On May
11, 2001 the Company paid $5,000 cash to amend the License to include the state
of Arizona. On October 15, 2001 the Company paid $5,000, by way of note payable,
to amend the License to include the State of Florida. On October 31, 2001 the
Company paid $20,000, by way of note payable, to amend the license to obtain a
worldwide exclusive right. The purchase price of the licenses were negotiated at
arms-length.
4. Notes Payable
Principal Amount. Interest Principal and Interest
.. . . . . . . . Rate Due Date
- ----------------- --------- ----------------------
5,000 . . . . . . 7% October 15, 2002
20,000. . . . . . 7% April 30, 2003
These notes were consideration given for the purchase of the licenses referred
to in Note 3. The principal and interest on the notes payable are due on the
dates above or earlier on demand. If repayment is defaulted on, Reach
Technologies Inc., the vendor, shall have the right to terminate the licensing
agreement. The $5,000 note and $1,526 of the $20,000 note were repaid in January
2002.
5. Shareholder Loan
The loan is unsecured, non-interest bearing and will not be demanded during the
next fiscal year.
6. Common Stock
1,000,000 common shares were issued at $0.04 per share for cash proceeds of
$40,000 during fiscal 2001 pursuant to an SB-2 Registration Statement filed with
the SEC April 30, 2001. During the period ended July 31, 2000 the Company issued
5,000,000 common shares at $0.002 per share for cash proceeds of $10,000.
7. Related Party Transactions
The President of the Company has donated consulting services valued at $1,000
per month and rent valued at $250 per month. These amounts have been charged to
operations and classified as "donated capital" in stockholders' equity.
6
ITEM 2. PLAN OF OPERATION
This quarterly report on Form 10-QSB contains forward-looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from the
forward-looking statements. You should not place undue reliance on
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expects", "plans",
"anticipates", "believes", "estimated", "predicts", "potential", or "continue"
or the negative of such terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties, and
other factors that may cause BERT Logic Inc.'s actual results, levels of
activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievements expressed or
implied by such forward-looking statements. These factors include, among other
things, those discussed in this quarterly report on Form 10-QSB and in BERT
Logic Inc.'s other filings with the SEC. Although BERT Logic Inc. believes that
the expectations reflected in the forward-looking statements are reasonable,
forward-looking statements are inherently uncertain, and BERT Logic Inc. cannot
guarantee future results, levels of activity, performance, or achievements. BERT
Logic Inc. is under no duty to update any of the forward-looking statements in
this quarterly report on Form 10-QSB to conform forward-looking statements to
actual results. All forward-looking statements should be considered in light of
these risks and uncertainties.
BERT Logic Inc. was incorporated under the laws of the State of Washington on
May 31, 2000. To date, BERT Logic Inc.'s activities toward the selling of its
bit error rate tester product line. BERT Logic Inc. has commenced commercial
operations.
BERT Logic Inc. principal business, at present, is the marketing of its licensed
product line consisting of high-tech instruments that are used to test the
integrity and reliability of the communications channel used to transfer data
from one source to another. Specifically, the instruments test the bit error
rate in a stream of data between to points. This helps companies' better
monitor the performance of their digital communications equipment. BERT Logic
Inc.'s products can allow companies keep their production lines running and
maintain the quality of their products, which may be adversely affected by
improperly functioning production equipment. BERT Logic Inc.'s products can
also help companies in the development if high-tech equipment used in
communications systems.
The bit error rate tester software resides on a single printed circuit board
that can be easily installed any personal computer. The licensed product line
consists of bit error rate testers capable of testing at speeds up to 40
Megabits per second. Models can be configured as laboratory, rack mount and
portable versions.
7
BERT Logic Inc.'s plan of operation for the next twelve months is to continue
marketing the licensed product line. The market for the product includes
aircraft and spacecraft manufacturers, both private and government, involved in
both military and nonmilitary applications and it is anticipated that these will
be the focus of selling efforts. BERT Logic Inc. will begin marketing the
product to new target companies as they are identified.
RESULTS OF OPERATIONS
SALES
BERT Logic Inc. has generated $75,041 in sales revenues during the period
covered by this Form 10-QSB.
LOSSES
Net losses for the nine months ended January 31, 2002, were $28,316. The losses
are primarily attributable to the costs associated with BERT Logic Inc.'s
marketing study , tradeshow participation and with consulting and rent expenses
charged to operations and classified as "donated capital" in shareholders'
equity.
BERT Logic Inc. expects to continue to incur losses at least through fiscal year
2002 and there can be no assurance that BERT Logic Inc. will achieve or maintain
profitability, generate revenue or sustain future growth.
LIQUIDITY AND CAPITAL RESOURCES
BERT Logic Inc. has funded its cash needs over the periods covered by this Form
10-QSB with cash on hand and revenues. It is anticipated that the cash on hand
of $9,259 will be sufficient to satisfy cash requirements over the next twelve
months.
PRODUCT RESEARCH AND DEVELOPMENT
BERT Logic Inc. plans no product research and development over the next twelve
months.
CAPITAL EXPENDITURES
On October 15, 2001, BERT Logic Inc. agreed to pay $5,000 in the form of a note
payable, due October 15, 2002, to amend the License agreement to include the
State of Florida On October 30, 2001, BERT Logic Inc. agreed to pay $20,000 in
the form of a note payable, due April 30, 2003, to amend the License agreement
to a worldwide exclusive license. There are no planned capital expenditure in
the next twelve months. A Form 8K with respect to the October 30th 2001
transaction was filed on November 6, 2001.
EMPLOYEES
Other than hiring one commission sales staff, BERT Logic Inc. expects no
significant changes in its number of employees.
8
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
NONE
(B) REPORTS ON FORM 8-K.
NONE
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BERT Logic Inc.
Date: 05/07/02
/s/ Lance Rudelsheim
- ----------------------
Lance Rudelsheim
President & Director
9
