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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from: __________ to ___________.
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Commission file number 0-26909
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REWARD ENTERPRISES INC.
(Exact name of Registrant as specified in its charter.)
NEVADA 98-0203927
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12880 Railway Avenue
Unit No. 35
Richmond, British Columbia
Canada V6C 2G8
(Address of principal executive offices, including zip code.)
(604) 664-5139
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 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 filing requirements for the past 90 days.
YES [ x ] NO [ ]
The number of shares outstanding of the Registrant's Common Stock, $0.01 par
value per share, at September 30, 2000 was 2,715,000 shares.
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<PAGE> 2
Reward Enterprises, Inc.
Vancouver, B.C.
Canada V6B 2R9
Independent Accountant's Review Report
We have reviewed the accompanying consolidated balance sheet of Reward
Enterprises, Inc. as of September 30, 2000 and the related consolidated
statements of operations, stockholders' equity and cash flows for the three
months ended September 30, 2000, and for the period from December 12, 1997
(inception) to September 30, 2000. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles.
The financial statements for the year ended June 30, 2000 were audited by us
and we expressed an unqualified opinion on them in our report dated August 4,
2000, but we have not performed any auditing procedures since that date.
As discussed in Note 2, the Company's realization of a major portion of the
assets is dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, WA
November 3, 2000
-1-
<PAGE> 3
REWARD ENTERPRISES INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
September 30, June 30,
2000 2000
(Unaudited) 1999
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 24,777 $ 26,261$
---------- ----------
TOTAL CURRENT ASSETS 24,777 26,261
---------- ----------
PROPERTY AND EQUIPMENT
Computer hardware 9,985 9,985
Website 10,000 10,000
Software license 50,000 50,000
Accumulated depreciation
and amortization (2,500) (1,997)
---------- ----------
TOTAL PROPERTY AND EQUIPMENT 67,485 67,988
---------- ----------
TOTAL ASSETS $ 92,262 $ 94,249$
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 55,500 $ 55,500$
Accrued expenses 194,000 155,000
Loans payable, related party 3,600 3,600
---------- ----------
TOTAL CURRENT LIABILITIES 253,100 214,100
---------- ----------
TOTAL LIABILITIES 253,100 214,100
---------- ----------
COMMITMENTS AND CONTINGENCIES - -
---------- ----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 200,000,000 shares
authorized, $0.01 par value;
2,715,000 shares issued and
outstanding 27,150 27,150
Additional paid-in capital 154,350 154,350
Subscriptions receivable - -
Accumulated deficit during
development stage (342,338) (301,165)
Accumulated other comprehensive income - (186)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (160,838) (119,851)
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 92,262 $ 94,249$
========== ==========
See accompanying notes and accountant's review report.
-2-
<PAGE> 4
REWARD ENTERPRISES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
12/12/97
Three Months Three Months (Inception)
Ended Ended Through
09/30/00 09/30/99 09/30/00
(unaudited) (unaudited) (unaudited)
R E V E N U E S $ - $ - $ -
--------- ---------- ----------
E X P E N S E S
Consulting fees 39,000 7,500 253,000
Commissions - 1,000
Legal and professional fees - 9,400 57,808
Travel and entertainment - 8,823 18,973
Office and administration 2,173 - 11,557
--------- ---------- ----------
TOTAL OPERATING EXPENSES 41,173 25,723 342,338
--------- ---------- ----------
LOSS FROM OPERATIONS (41,173) (25,723) (342,338)
PROVISION FOR TAXES - - -
--------- ---------- ----------
NET LOSS (41,173) (25,723) (342,338)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation
gain (loss) 186 61 -
--------- ---------- ----------
COMPREHENSIVE LOSS $ (40,987) $ (25,662) $ (342,338)
BASIC AND DILUTED
NET LOSS PER
COMMON SHARE $ (0.02) $ (0.01) $ (0.14)
========= ========= ==========
WEIGHTED AVERAGE NUMBER
OF BASIC AND DILUTED
COMMON STOCK SHARES
OUTSTANDING 2,715,000 2,715,000 2,428,750
========= ========= ==========
See accompanying notes and accountant's review report.
-3-
<PAGE> 5
REWARD ENTERPRISES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Accumulated
Accumulated Other
Deficit Compre- Total
Common Stock Additional Subscrip- During hensive Stock-
Number Paid-in tions Development Income holders
of Shares Amount Capital Receivable Stage (Loss) Equity
Issuance of common
stock in April 1998
for services valued
at $0.01 per
share 1,000,000 $ 10,000 $ - $ (10,000) $ - $ - $ -
Loss for period
ending
09/30/98 - - - - (10,000) - (10,000)
--------- -------- --------- --------- ---------- ----- --------
Balance,
09/30/98 1,000,000 10,000 - (10,000) (10,000) - (10,000)
Issuance of
common stock
in May 1999
for cash at
$0.01 per
share 1,400,000 14,000 - - - - 14,000
Issuance of
common stock
in May 1999
for cash at
$0.50 per
share 315,000 3,150 154,350 - - - 157,500
Loss for
year ending
06/30/99 - - - - (62,506) - (62,506)
Foreign translation
gain (loss) - - - - - (215) (215)
--------- -------- --------- --------- ---------- ---- --------
Balance,
06/30/99 2,715,000 27,150 154,350 (10,000) (72,506) (215) 98,779
Services
provided for
stock
subscription - - - 10,000 - - 10,000
Loss for
year ending
06/30/00 - - - - (228,659) - (228,659)
Foreign
translation
gain (loss) - - - - - 29 29
--------- -------- --------- --------- ---------- ---- --------
Balance,
06/30/00 2,715,000 27,150 154,350 - (301,165) (186)(119,851)
Loss for the three
months ended
09/30/00 - - - - (41,173) - (41,173)
Foreign
translation
gain (loss) - - - - - 186 186
--------- -------- --------- --------- ---------- ---- --------
Balance,
09/30/00
(unaudited)
2,715,000 $ 27,150 $ 154,350 $ - $ (342,338) $ - $(160,838)
========= ======== ========= ========= ========== ==== ==========
See accompanying notes and accountant's review report.
-4-
<PAGE> 6
REWARD ENTERPRISES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
12/12/97
Three Months Three Months (Inception)
Ended Ended Through
09/30/00 09/30/99 09/30/00
(unaudited) (unaudited) (unaudited)
Cash flows from operating activities:
Net loss $ (40,987) $ (25,723) $ (342,123)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation 503 - 2,500
Services provided in exchange
for stock subscriptions - - 10,000
Stock subscribed in exchange
for payables - - 10,000
Increase in:
Other assets - - (60,000)
Accounts payable - - 18,000
Accrued expenses 39,000 - 194,000
Decrease in:
Accounts payable - (10,000) 27,500
---------- ---------- ----------
Net cash (used) by operating
activities (1,484) (35,723) (140,123)
---------- ---------- ----------
Cash flows from investing activities:
Investment in subsidiary - (5,000) -
Purchase of property and equipment - - (9,985)
0 ---------- ---------- ----------
Net cash (used) by investing
activities - - (9,985)
---------- ---------- ----------
Cash flows from financing activities:
Proceeds from related party loans - 3,600 3,600
Issuance of stock - - 171,500
---------- ---------- ----------
Net cash provided by financing
activities - 3,600 175,100
---------- ---------- ----------
Net increase in cash and cash
equivalents (1,484) (37,123) 24,992
Foreign translation gain (loss) - 61 (215)
Cash and cash equivalents, beginning
of period 26,261 102,614 -
---------- ---------- ----------
Cash and cash equivalents,
end of period $ 24,777 $ 65,552 $ 24,777
========== ========== ==========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest and income taxes:
Interest $ - $ - $ -
========== ========== ==========
Income taxes $ - $ - $ -
========== ========== ==========
NON-CASH INVESTING AND FINANCING:
Services exchanged for
stock subscriptions $ - $ - $ 10,000
========== ========== =========
Stock subscribed in exchange
for payables $ - $ 10,000 $ 10,000
========== ========== =========
<PAGE> 7
REWARD ENTERPRISES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Reward Enterprises, Inc., formerly Sports Entertainment (hereinafter "the
Company"), was incorporated in December 1997 under the laws of the State
of Nevada primarily for the purpose of offering interactive online
Internet entertainment and game playing. The name change to Reward
Enterprises, Inc. was effective on July 28, 1998.
In July and August 1999, the Company incorporated two subsidiaries in the
eastern Caribbean. See Note 5. The Company is in the development stage
and as of September 30, 2000 had not realized any significant revenues
from its planned operations. The Company's year-end is June 30.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Reward Enterprises,
Inc. is presented to assist in understanding the Company's consolidated
financial statements. The consolidated financial statements and notes
are representations of the Company's management, which is responsible for
their integrity and objectivity. These accounting policies conform to
generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Development Stage Activities
The Company has been in the development stage since its formation on
December 12, 1997. It is primarily engaged in internet entertainment and
the business of gaming.
Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company incurred a
net loss of and $41,173 and $25,723 for the three months ended September
30, 2000 and 1999, respectively. The Company is currently putting
technology in place that will, if successful, mitigate these factors that
raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or
the amounts and classification of liabilities that might be necessary in
the event the Company cannot continue in existence.
Management intends to seek new capital from new equity securities
issuances that will provide funds needed to increase liquidity, fund
internal growth and fully implement its business plan.
-6-
<PAGE> 8
REWARD ENTERPRISES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting.
Basic and Diluted Loss Per Share
Net loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of shares
outstanding and weighting them by the amount of time that they were
outstanding. Basic and diluted loss per share were the same, as there
were no common stock equivalents outstanding.
Cash and Cash Equivalents
For purposes of the Consolidated Statement of Cash Flows, the Company
considers all short-term debt securities purchased with a maturity of
three months or less to be cash equivalents.
Provision for Taxes
At September 30, 2000, the Company had a net cumulative operating loss of
approximately $342,000. No provision for taxes or tax benefit has been
reported in the financial statements, as there is not a measurable means
of assessing future profits or losses.
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of estimates
and assumptions regarding certain types of assets, liabilities, revenues,
and expenses. Such estimates primarily relate to unsettled transactions
and events as of the date of the financial statements. Accordingly, upon
settlement, actual results may differ from estimated amounts.
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-lived Assets." In
complying with this standard, the Company reviews its long-lived assets
quarterly to determine if any events or changes in circumstances have
transpired which indicate that the carrying value of its assets may not
be recoverable. The Company does not believe any adjustments are needed
to the carrying value of its assets at September 30, 2000.
Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This standard
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at fair value.
-7-
<PAGE> 9
REWARD ENTERPRISES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Derivative Instruments (continued)
At September 30, 2000, the Company has not engaged in any transactions that
would be considered derivative instruments or hedging activities.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant inter-company transactions and
balances have been eliminated in consolidation.
Segment Reporting
In July and August 1999, the Company incorporated two subsidiaries in the
eastern Caribbean.
As of September 30, 2000, neither subsidiary had revenues or expenses.
The Company expects to use segment reporting for its subsidiaries once
operations are established.
Interim Financial Statements
The interim financial statements for the period ended September 30, 2000,
included herein have not been audited, at the request of the Company.
They reflect all adjustments, which are, in the opinion of management,
necessary to present fairly the results of operations for the period.
All such adjustments are normal recurring adjustments. The results of
operations for the period presented is not necessarily indicative of the
results to be expected for the full fiscal year.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets.
The useful lives of property, plant and equipment for purposes of computing
depreciation is five years.
Depreciation expense of $503 has been recognized for the three months ended
September 30, 2000.
NOTE 4 - INTANGIBLE ASSETS
The Company has capitalized $60,000 which is the contractual cost of the
website and software license purchased from an independent supplier. No
portion of this software was internally developed and, accordingly, there
are no internal costs associated with this software which were charged to
research and development. Consistent with SOP 98-1, the costs of this
software-which was purchased solely for internal use and will not be
marketed externally-have been capitalized and will be amortized over five
years. Currently the web site and software license have not been put into
service and are not being amortized.
-8-
<PAGE> 10
REWARD ENTERPRISES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000
NOTE 5 - SUBSIDIARIES
On July 22, 1999, the Company incorporated a subsidiary in Nevis, eastern
Caribbean under the name Reward Nevis Group, Inc. The shares are held by
another subsidiary, Reward International Group Ltd., a Bermudian company,
which was incorporated August 6, 1999. Reward International Group Ltd. is
wholly owned by Reward Enterprises, Inc. The Company contributed an initial
investment of $10,400 toward the start-up of the subsidiaries.
NOTE 6 - COMMON STOCK
Upon incorporation, subscriptions for 10,000,000 shares of common stock
were issued at $.001 per share for $10,000. In July 1999, the Board of
Directors authorized a 1 for 10 reverse stock split. This decreased the
number of issued and outstanding shares to 1,000,000 and increased the par
value of the stock to $0.01 per share. All financial statement information
herein has been changed to reflect this stock split.
Additional share issuances under Regulation D, Rule 504, include 1,400,000
common shares at $.01 and 315,000 common shares at $0.50 per share, for
total proceeds of $171,500.
At June 30, 1999, $10,000 in stock subscriptions was receivable. During
the year ended June 30, 2000, the subscriptions receivable were satisfied.
NOTE 7 - STOCK OPTIONS
In September 1998, the Company adopted the Reward Enterprises, Inc. 1999
Directors and Officers Stock Option Plan, a non-qualified plan. This plan
allows the Company to distribute up to 2,000,000 shares of common stock to
officers, directors, employees and consultants through the authorization of
the Company's board of directors.
During 1999, under Rule 701, the Company issued 2,500,000 common stock
options for the services of consultants. The options issued include
negotiation rights and begin vesting in June 1999, with 25% of the eligible
shares vesting each year until the recipients are fully vested in their
shares. The Company entered into consulting agreements with three
directors of the Company. Two of the directors will each receive $5,000
per month and 500,000 common stock options exercisable at $0.10 per share
and 500,000 common stock options exercisable at $0.25 per share. The other
director will receive $2,500 per month and 250,000 common stock options
exercisable at $.10 per share and 250,000 common stock options exercisable
at $0.25 per share. All options related to these agreements expire June
30, 2010. At June 30, 2000, $189,000 was accrued and recorded as
consulting fees.
-9-
<PAGE> 11
REWARD ENTERPRISES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000
NOTE 7 - STOCK OPTIONS (continued)
The fair value of each option granted is estimated on the grant date using
the Black-Scholes Option Price Calculation. The following assumptions were
made in estimating fair value: Risk-free interest rate of 5% and expected
life of ten years. A minimum volatility of 5% was used and resulted in no
adjustment to compensation.
Following is a summary of the stock options:
Weighted
Number Average
Of Exercise
Shares Price
Outstanding at 6-30-98 - -
========= ======
Granted 1,250,000 $ 0.10
Granted 1,250,000 $ 0.25
Exercised - $ -
Forfeited - $ -
--------- ------
Outstanding at 6-30-99 2,500,000 $ 0.18
========= ======
Options exercisable at 6-30-99 625,000 $ 0.18
========= ======
Outstanding at 6-30-2000 2,500,000 $ 0.18
Granted - -
Exercised - -
Forfeited - -
--------- ------
Outstanding 2,500,000 $ 0.18
========= ======
Options exercisable at 6-30-2000 1,250,000
=========
Weighted average fair value of options
exercisable at 6-30-2000 $ 0.18
=========
NOTE 8 - RELATED PARTIES
Certain consultants who received common stock options under the Company's
non-qualified stock option plan are the Company's directors and
stockholders. (See Note 6). An associate of a director of the Company
provides office space to the Company at no charge. The value of this space
is not considered significant. The Company also received funds from a
related party. See Note 10.
-10-
<PAGE> 12
REWARD ENTERPRISES, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Database Development
The Company's purchase commitment for services to develop a website totaled
$10,000, of which $5,000 was paid in 1999. As of September 30, 2000, the
Company considered that the majority of the services contracted for were
payable and accrued the balance owing of $5,000 as part of accounts
payable.
Software License Agreement
The Company's purchase commitment for a software license agreement totaled
$50,000 of which $20,000 was paid in 1999. As of September 30, 2000, the
Company considered the contract payable and accrued the balance of $30,000
as part of accounts payable.
As further consideration for the rights granted under the software license,
the licensee, Reward Enterprises, Inc., will pay a royalty calculated at
30% of gross revenue until aggregate royalty payments of $100,000 have been
paid. After the $100,000 has been paid, the royalty rate will be reduced
to 20% of gross revenue until an aggregate $1,000,000 has been paid and,
thereafter, royalty payments will be 15% of gross revenue for the balance
of the term of the agreement. The term of the agreement is two years
commencing June 15, 1999 with an option to renew for another two years.
Royalty payments begin at the end of the first month after the Company is
no longer considered to be in the development stage.
NOTE 10 - LOANS PAYABLE
The Company received funds from related parties in the form of loans.
These are recorded as unsecured, non-interest bearing, short-term loans,
payable upon demand.
NOTE 11 - CONCENTRATIONS
The Company maintains two checking accounts at a financial institution
located in Delta, British Columbia, Canada. One checking account is
maintained in U.S. dollars, and the second in Canadian dollars. The
combined total of both accounts, as translated to U.S. dollars, was $24,777
as of September 30, 2000. The U.S. currency account is not insured.
NOTE 12 - TRANSLATION OF FOREIGN CURRENCY
The Company has adopted Financial Accounting Standard No. 52. Foreign
currency translation resulted in an aggregate exchange gain of $186 for the
period ended September 30, 2000. The Company recorded this transaction in
the Statement of Stockholders' Equity.
-11-
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
THE FOLLOWING ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL
CONDITION OF THE COMPANY FOR THE PERIOD ENDING SEPTEMBER 30, 2000 SHOULD BE
READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING
THE NOTES THERETO, OF THE COMPANY CONTAINED ELSEWHERE IN THIS FORM 10-QSB
OVERVIEW
Reward Enterprises, Inc. (the "Company") was incorporated in April
1998 as Sports Entertainment Productions Inc. to pursue opportunities
around the world in the Internet based entertainment industry. The name
was changed to Reward Enterprises, Inc in July 1998. Its main objective has
been to develop a profitable "Entertainment Mall" through an e-commerce
secure "portal." Entertainment options offered will be videos, CDs,
virtual casino-style games, free bingo, and dice and specialty and
interactive video games. The Company continues to evaluate its business
plan to determine its best course of action.
On June 15, 1999, Reward Nevis Group, Inc, a wholly owned subsidiary
of the Company entered into a non-exclusive software license agreement with
Chartwell Technologies Inc, of Laguna Hills, California to acquire and
development all software necessary to conduct the Internet gaming activity
and to handle all Internet cash transactions. This software is customized
and is a full service gaming system that includes twelve casino games, a
back-end administrative utility with remote access, I.P. Tracking,
e-Commerce software and technical support. The license is non-exclusive and
is currently licensed to others. The Company is restricted in the use of
this technology and cannot sublicense it to others. It is for a period of
two years and has provision for renewal for additional two years. The
royalty payable is 15% of gross revenues generated. Pursuant to the
agreement, $20,000 has been paid to Chartwell to date.
Management of the Company is currently in the development stage of its
business and is in the process of continued evaluation of its business plan
in order to take the best course of action for the benefit of its
shareholders. The Company continues to test the Web site operating and
software systems, including gaming, shopping and browsing features, and
on-line ordering. There are no new developments regarding this testing
program.
RESULTS OF OPERATIONS
There are no revenues in the quarter ending September 30, 2000, as the
Company has not as yet activated its web site.
During the three-month period ending September 30, 2000, the Company
incurred expenses of $40.484.
These expenses were primarily consulting fees in the on-going
development of the business plan of the Company.
The Company continues to carefully control its expenses, and intends
to seek financing in the near future to provide necessary funds required.
The Company has no employees at the present time and engages personnel
through consulting agreements where necessary as well as outside attorneys,
accountants and technical consultants.
<PAGE> 24
Cash on hand at September 30, 2000 was $24,777 and the Company has
sufficient funds to conduct ifs affairs.
LIQUIDITY AND CAPITAL RESOURCES
The Company has to date, financed its development stage by the sale of
common stock. At September 30, 2000, the Company had 2,715,000 shares of
common stock outstanding and had raised a total of $181,500. At September
30, 2000 it had cash on hand of $24,777 and said cash resources are
maintained with a large Canadian financial institution.
The Company recognizes that it will need additional cash during the
next twelve months and will endeavor to obtain additional cash through the
sale of common stock. There is no assurance that the Company will be able
to obtain additional capital as required, or obtain the capital on terms
and conditions acceptable to it.
The Company has sufficient cash to finance its operations at this
stage of its development but does intend to seek additional financing. Its
liabilities relate to its software license and website development.
YEAR 2000 COMPUTER SOFTWARE CONVERSION
All computer equipment owned by the Company has been acquired in the
past 12 months and is not considered to be a problem for Year 2000. This
assurance cannot be given for third party equipment for which the Company
has no control.
Since we have yet to acquire any technology in support of our
services, the planned acquisitions will most likely involve hardware and
software which is relatively new and therefore management does not
anticipate that it will incur significant operating expenses or be required
to invest heavily in computer systems improvements to be Year 2000
compliant.
While the Company is confident that its systems will be compatible, no
assurance can be given that this will not impact the Company's results of
operations.
INFLATION
Inflation has not been a factor during the quarter ending March 31,
2000. While inflationary forces are moderately higher than in 1999, the
actual inflation is immaterial and is not considered a factor in any
contemplated capital expenditure program.
EXHIBIT INDEX
Exhibit No. Description
27 Financial Data Schedule
<PAGE> 15
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 this 13th day of November, 2000.
REWARD ENTERPRISES INC.
(the "Registrant")
BY: /s/ Robert Dinning
Robert Dinning, Secretary/Treasurer, Chief
Financial Officer and a Member of the Board
of Directors.
