<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
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[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM _________________ TO _______________
Commission file number 0-29 219
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POKER.COM INC
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(Exact name of small business issuer as specified in its charter)
FLORIDA 98-0199508
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
SUITE 201 1166 ALBERNI ST. VANCOUVER V6E 3Z3
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(Address of principal executive offices) (Zip Code)
(604) 689-5998
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(Issuer's telephone number)
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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 ___
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Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes ____ No _____
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 5,275,000 COMMON SHARES AS AT JUNE
30, 2000.
Transitional Small Business Disclosure Format
(Check one):
Yes ____ No X
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POKER.COM INC.
FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Index Page Number
<S> <C> <C>
PART I FINANCIAL INFORMATION 2
Item 1. Consolidated Balance Sheets F-1
Consolidated Statements of Operations F-2
Consolidated Statement of Stockholders' Equity F-3
Consolidated Statements of Cash Flows F-4
Notes to Unaudited Consolidated Financial Statements F-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II OTHER INFORMATION 12
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE 13
</TABLE>
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
POKER.COM, INC.
(Formerly Thermal Ablation Technologies Corporation)
(A Development Stage Company)
Consolidated Financial Statements
June 30, 2000 and December 31, 1999
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
INDEX Page
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<S> <C>
Consolidated Financial Statements
Consolidated Balance Sheets F-1
Consolidated Statements of Operations F-2
Consolidated Statements of Stockholders' Equity F-3
Consolidated Statements of Cash Flows F-4
Note to Consolidated Financial Statements F-5
</TABLE>
2
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POKER.COM, INC.
(Formerly Thermal Ablation Technologies Corporation)
(A Development Stage Company)
Consolidated Balance Sheets
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
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June 30, December 31,
2000 1999
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Assets
Current
<S> <C> <C>
Cash $ 61,324 $ 41,132
Accounts receivable 311,458 99,405
Prepaid expenses 17,178 2,635
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Total Current Assets 389,960 143,172
Long-Term Receivable 150,000 150,000
Property and Equipment 73,157 100,822
Intangible Assets 219,296 222,812
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Total Assets $ 832,413 $ 616,806
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Liabilities
Current
Accounts payable and accrued liabilities $ 312,686 $ 195,527
Advances from related parties 3,490 95,927
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Total Liabilities 316,176 291,454
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Stockholders' Equity
Preferred Stock, $0.01 par value, 5,000,000 shares authorized, no
shares issued and outstanding
Common Stock and Paid-In Capital in Excess of $0.01 Par Value
100,000,000 Shares authorized
5,275,000 (December 31, 1999 - 4,700,000) shares
issued and outstanding 1,085,000 510,000
Subscriptions Received 360,000 500,000
Other Comprehensive Income (Loss) 4,084 (14,130)
Deficit Accumulated During the Development Stage (932,847) (670,518)
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Total Stockholders' Equity 516,237 325,352
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Total Liabilities and Stockholders' Equity $ 832,413 $ 616,806
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</TABLE>
F-1
<PAGE>
POKER.COM, INC.
(Formerly Thermal Ablation Technologies Corporation)
(A Development Stage Company)
Consolidated Statements of Operations for Period From Inception to June 30, 2000
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
_________________________________________________________________________________________________________________
Period from
May 3, 1989
(Inception)
Through
Three Months Ended June 30, Six Months Ended June 30, June 30,
2000 1999 2000 1999 2000
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<S> <C> <C> <C> <C> <C>
Revenues
Marketing $ 317,625 $ 0 $ 574,845 $ 0 $ 625,125
Miscellaneous 3,000 41 3,000 41 4,014
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Total Revenues 320,625 41 577,845 41 629,139
Cost of Goods Sold 65,634 0 94,323 0 122,116
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Gross Margin 254,991 41 483,522 41 507,023
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Expenses
Website marketing 119,434 0 340,102 0 140,297
General corporate
expenses and recovery 67,892 0 65,623 0 100,000
Corporation promotion 44,961 713 112,432 713 476,675
Office supplies and services 42,993 3,643 83,330 3,643 139,437
Management and consulting
fees 21,906 22,573 41,001 22,573 156,255
Professional fees 19,051 3,399 22,013 3,399 153,646
Rent 7,895 14,228 14,526 14,228 114,729
Investment written off 0 140,297 0 140,297 47,087
Compensation expense 0 0 0 0 101,995
Depreciation and amortization 53,483 0 66,824 0 74,749
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Total Expenses 377,615 184,853 745,851 184,853 1,504,870
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Loss from Operations (122,624) (184,812) (262,329) (184,812) (997,847)
Gain on Sale of Asset 0 0 0 0 65,000
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Net Loss for Period $ (122,624) $ (184,812) $ (262,329) $ (184,812) $ (932,847)
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Net Loss Per Share $(0.02) $(0.04) $(0.05) $(0.04)
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Weighted Average Number of
Common Shares Outstanding 5,267,582 4,200,000 5,183,340 4,133,333
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</TABLE>
F-2
<PAGE>
POKER.COM, INC.
(Formerly Thermal Ablation Technologies Corporation)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________
Six Months Period From May 3,
Ended Year Ended 1989 (Inception)
June 30, December 31, Through June 30,
2000 1999 2000
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<S> <C> <C> <C>
Shares of Common Stock Issued
Balance, beginning of period 4,700,000 4,000,000 0
Issued for
Services 0 250,000 1,000,000
Settlement of debt 75,000 0 75,000
Cash 0 0 3,000,000
Subscriptions previously received 500,000 200,000 700,000
Intangible assets 0 250,000 500,000
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Balance, end of period 5,275,000 4,700,000 5,275,000
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Common Stock and Paid-In Capital In
Excess of Par
Balance, beginning of period $ 510,000 $ 160,000 $ 0
Issued for
Services 0 125,000 135,000
Settlement of debt 75,000 0 75,000
Cash 0 0 150,000
Subscriptions previously received 500,000 100,000 600,000
Intangible assets 0 125,000 125,000
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Balance, end of period $1,085,000 $ 510,000 $1,085,000
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Subscriptions Received
Balance, beginning of period $ 500,000 $ 100,000 $ 600,000
Issued for subscriptions received (500,000) (100,000) (600,000)
Subscriptions received 360,000 500,000 360,000
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Balance, end of period $ 360,000 $ 500,000 $ 360,000
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Other Comprehensive Income (Loss)
Balance, beginning of period $ (14,130) $ 0 $ 0
Foreign currency translation gain (loss) 18,214 (14,130) 4,084
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Balance, end of period $ 4,084 $ (14,130) $ 4,084
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Deficit Accumulated During
Development Stage
Balance, beginning of period $ (670,518) $ (158,931) $ 0
Net loss for period (262,329) (511,587) (932,847)
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Balance, end of period $ (932,847) $ (670,518) $ (932,847)
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Total Stockholders' Equity $ 516,237 $ 325,352 $ 516,237
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</TABLE>
See notes to consolidated financial statements
F-3
<PAGE>
POKER.COM, INC.
(Formerly Thermal Ablation Technologies Corporation)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
_________________________________________________________________________________________________________________
Period May 3,
1989 (Inception)
Six Months Ended June 30, Through June 30,
2000 1999 2000
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<S> <C>
Operating Activities
Net loss $ (262,329) $(184,812) $ (927,847)
Adjustments to reconcile net loss to
net cash used by operating activities
Depreciation and amortization 66,824 0 74,749
Write-down of investment 0 140,297 140,297
Changes in non-cash working capital (767) 91,377 175,824
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Net Cash Used By Operating Activities (196,272) 46,862 (536,977)
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Investing Activities
Acquisition of investment 0 (50,000) (140,297)
Purchase of property, equipment
and intangible assets (35,643) 0 (259,379)
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Net Cash Used By Investing Activities (35,643) (50,000) (399,676)
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Financing Activities
Proceeds from issuance of common
stock 0 0 260,000
Subscriptions received 260,000 0 760,000
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Net Cash Provided By Financing Activities 260,000 0 1,020,000
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Effect of Foreign Currency Translation on Cash (7,893) (2,457) (22,023)
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Inflow (Outflow) of Cash 20,192 (5,595) 61,324
Cash, Beginning of Period 41,132 5,898 0
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Cash, End of Period $ 61,324 $ 303 $ 61,324
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Supplemental Disclosure of Non-Cash Transactions
Reduction of subscriptions previously received
by issuance of shares $(500,000) $(100,000) $ (600,000)
Issue of common shares for settlement of debt 75,000 0 175,000
Issue of common stock for assets 0 0 250,000
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</TABLE>
See notes to consolidated financial statements
F-4
<PAGE>
POKER.COM, INC.
(Formerly Thermal Ablation Technologies Corporation)
(A Development Stage Company)
Note to Consolidated Financial Statements
Three Month and Six Month Period Ended June 30, 2000
(U.S. Dollars)
(Unaudited)
________________________________________________________________________________
1. BASIS OF PRESENTATION
These unaudited financial statements have been prepared in accordance with
generally accepted accounting principles in the United States for interim
financial information. These financial statements are condensed and do not
include all disclosures required for annual financial statements. The
organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the
Company's audited consolidated financial statements filed as part of the
Company's December 31, 1999 Form 10-SB.
In the opinion of the Company's management, these financial statements
reflect all adjustments necessary to present fairly the Company's
consolidated financial position at June 30, 2000 and the consolidated
results of operations and the consolidated statement of cash flows for the
three months and six months then ended. The results of operations for the
three months and six months ended June 30, 2000 are not necessarily
indicative of the results to be expected for the entire fiscal year.
F-5
<PAGE>
August 4, 2000
POKER.COM, INC. (PKER.OB)
Quarterly Report (SEC Form 10-QSB)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(All figures are in thousands of US dollars)
OVERVIEW
Poker.com, Inc. is a licensing and marketing company that licenses Internet
gaming systems and has the exclusive worldwide rights to market the poker.com
domain name. The Company's main sources of revenue are derived from sub-
licensing fees, ongoing royalty fees, an opt-in advertising program, and banner
advertising.
Casino Marketing, S.A. (a wholly-owned subsidiary of Poker.com, Inc.) sells
Casino and Poker card room sub-licenses and derives its revenue from the sub-
licensing fees and royalty payments. The Company has sold 12 sub-licenses to
date of which 6 are currently operational.
Poker.com intends to establish www.poker.com as the ultimate gaming portal on
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the Internet.
THE INTERNET GAMBLING FUNDING PROHIBITION ACT
The proposed Internet Gambling Funding Prohibition Act (the "Bill") was
introduced to the U.S. House of Representatives on May 10th, 2000. The object
of the Bill is to prevent the use of certain bank instruments for Internet
Gambling and for other purposes. Section 3 of the Bill would make it illegal to
use bank instruments to pay entry fees, place bets, collect betting winnings or
conduct other gambling activities through the Internet. Covered bank
instruments include: credit cards, debit cards, electronic fund transfers
through money transmitting businesses, checks, bank drafts or similar
instruments drawn by or on behalf of a person payable through a financial
institution. Section 4 of the Bill is proposed to encourage enactment and
enforcement of laws in those countries affected with money laundering,
corruption and crime issues in order to prevent Internet gambling and use of
financial payment and transfer systems to facilitate Internet Gambling.
If this Act is approved by Congress and brought into law, the Company's revenues
from sales of sub-licenses and royalty fees earned from the Company's sub-
licenses will be severally affected. The effect of the proposed act would slow
down the sale of sub-licenses. Reduced revenue from sale of licenses and
royalty fees could have a serious negative effect on the financial status of the
Company and could result in the Company being unable to continue in business.
9
<PAGE>
RESULTS OF CONTINUING OPERATIONS
The following table sets forth for the periods indicated selected information
from Poker.com's consolidated statements of operations:
Three Months Three Months
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Ended June 30, Ended June 30,
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2000 1999
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(IN THOUSANDS)
Net Sales 321 0
Gross Margins 255 0
Operating Expenses 378 187
Income (loss from (123) (187)
continuing operations
Net (loss) Income (123) (187)
THREE-MONTH PERIOD ENDED JUNE 30, 2000 AND 1999
NET SALES. Net sales for the three months ended June 30, 2000 was $321 compared
to $0 for the three months ended June 30, 1999 as the Company had no business
operation at that time. Sub-license revenues was $68, banner advertising
revenues was $171 and royalty fees was $76 for the three months ended June 30,
2000 respectively.
The Company believes that royalty revenue from casinos and the new Poker card
room software will substantially improve the gross revenues for the next
quarter. These are forward-looking statements, particularly as related to the
business plans of the Company, within the meaning of Section 27A of the
Securities Act of 1993 and Section 21E of the Securities Exchange Act of 1934
and are subject to the safe harbor created by these sections. Actual results
may differ materially from the Company's expectations and estimates.
GROSS MARGIN. Gross margin was 79% of net sales for the three months ended
June 30, 2000. Management believes the margin is consistent with licensing and
marketing of turnkey Internet gaming systems. Poker.com's gross margin may be
affected by several factors including (i) the mix of revenues streams, (ii) the
price of products sold and (iii) other components of cost of sales.
OPERATING EXPENSES. Operating expenses were $378 and $185 for the three months
ended June 30, 2000 and 1999 respectively and $746 and $185 for the six-month
periods ended June 30, 2000 and 1999 respectively. The increase in 2000 periods
is mainly due
10
<PAGE>
to website marketing and corporate promotion that was consistent with Poker's
aggressive marketing campaign.
DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and Amortization expense
was $53 and $0 for the three months ended June 30, 2000 and 1999 respectively
and $67 and $0 for the six-month periods ended June 30, 2000 and 1999
respectively. The increase in expenses for the three-month period ended June
30, 2000 is due to an accelerated write down of $46 for casino software the
Company believes will be obsolete by the end of the third quarter.
PROVISION FOR INCOME TAXES. No tax provision was made for the three months
ended June 30, 2000. The Company, at December 31, 1999 has available a net
operating loss carry forward of approximately $530 that may be used to offset
future United States Federal Taxable Income. The net operating loss carry
forward if not utilized will begin to expire in 2018.
FINANCIAL CONDITION AND LIQUIDITY
LIQUIDITY AND CAPITAL RESOURCES. At June 30, 2000 the Company had cash and cash
equivalents totaling $61 compared to $41 at December 31, 1999. The increase in
cash is mainly due to a subscription for common shares in the quarter ended
March 31, 2000. Poker.com's principal source of liquidity is $61 in cash and
cash equivalents.
Approximately $376 of the $461 accounts receivable and long term receivable was
due from Antico Holdings for the purchase of a Poker sub-license and Royalty
fees. The amount due from Antico Holdings for their License fee is payable in
equal installments over a period of three years. Antico Holdings has assigned
to Poker.com Inc. the 15% credit card hold back which will be released monthly
from July 15th, 2000.
Net cash (used) by operating activities for the six months ended June 30, 2000
was ($196). The decrease in cash was mainly due to increase in accounts
receivable of $212 to $311 from December 31, 1999. This is due to royalty
revenue, banner advertising and sale of casino license fees being accrued.
Net cash (used) for investing activities for the six-months ended June 30, 2000
was ($36). The cash was used for the purchase of additional capital assets and
casino software.
11
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
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 Reports on Form 8-K
(a) Exhibits.
Exhibit No. Description
----------- ------------------------------------------------------------------
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
None.
12
<PAGE>
Signatures
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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.
Poker.com Inc
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(Registrant)
Date 10 August 2000 /s/ M. Jackson
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(Signature)* Secretary
Date ________________________ _____________________________
(Signature)*
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* Print the name and title of each signing officer under his signatures.
Form 10-QSB
13
