SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 24, 1997 (June 6, 1997)
INTERBET, INC.
(Exact name of registrant as specified in its charter)
NEVADA 87-0485308
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
33-55254-43
(Commission File Number)
Suite 110, 1777 Botelho Drive, Walnut Creek, California 94596
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 296-2400
Bio-Chem, Inc., Suite 460, 3098 South Highland Drive, Salt Lake City, Utah 84601
(Former name or former address, if changed since last report.)
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Item 1. CHANGES IN CONTROL OF REGISTRANT.
On June 6, 1997, pursuant to a Stock Exchange Agreement and Plan of
Reorganization, Interbet, Inc., a Nevada corporation, ("Interbet") acquired
3,200,000 shares of the Registrant's authorized and unissued common stock.
Interbet acquired the Registrant's 3,200,000 shares of common stock in exchange
for 1,600,000 shares of Interbet's authorized and unissued common stock. The
change in control of the Registrant is a result of (i) the issue to Interbet of
shares representing approximately 72.26 percent of the Registrant's issued and
outstanding common stock at the completion of the transaction, (ii) the
resignation, in connection with the exchange, of the Registrant's incumbent
directors and officers and (iii) the election by Interbet, as the Registrant's
newly controlling stockholder of its own nominees as the Registrant's directors
to fill vacancies created by the aforesaid resignations, and the election in
turn by the new board of directors of the officers of the Registrant. Except as
described above, Interbet does not own, directly or indirectly, any other common
stock of the Registrant. The purpose of the acquisition of the Registrant's
common stock by Interbet is the merger of Interbet into the Registrant. On June
13, 1997, Articles of Merger were filed with the Secretary of State of Nevada,
effective upon filing, which accomplished the merger of Interbet into the
Registrant. In the merger, the shares of common stock of the Registrant and of
Interbet, respectively, which were issued in the exchange of common stock
described above were canceled and the other issued and outstanding shares of
Interbet's were converted into shares of common stock of the Registrant. As a
result of the merger, the Registrant now has a total of 3,965,200 shares of
common stock issued and outstanding, 1,100,000 constituting previously issued
and outstanding shares and 2,865,200 constituting shares converted from
Interbet's previously issued and outstanding shares. None of the former Interbet
stockholders own more than 135,100, or 3.40 percent (2.69 percent assuming the
exercise of 1,050,000 outstanding incentive stock options which are currently
exercisable), which is insufficient to control the business and affairs of the
Registrant. Subsequent to the merger, the Registrant's name was changed to
Interbet, Inc. from Bio-Chem, Inc., as provided in the Stock Exchange
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Agreement and Plan of Reorganization. The persons who were directors and the
officers of Interbet prior to the merger are now the directors and officers of
the Registrant. These persons and their securities ownership is as follows:
Number
Name Age Positions of shares Percent
S.T. Deck, Jr. 32 Director & President 135,100 3.41
Samuel I. 61 Chairman of the Board & Chief 10,000 *
Rosenthal Executive Officer
Michael Vishno 35 Director & Secretary/Treasurer 135,100 3.41
As a group 280,200 7.07
Messrs. Deck and Vishno would each own 2.69 percent, assuming the exercise
of 1,050,000 outstanding incentive stock options which are currently
exercisable, and directors and officers as a group would own 5.59 percent.
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 13, 1997, the Registrant acquired the business of Interbet, Inc., a
Nevada corporation, ("Interbet") as a result of a merger of Interbet into the
Registrant pursuant to a Stock Exchange Agreement and Plan of Reorganization
entered into on June 6, 1997. In the merger, the shares of common stock of the
Registrant and of Interbet, respectively, which were issued in the exchange of
common stock described above were canceled and the other issued and outstanding
shares of Interbet's common stock were converted into shares of the Registrant's
common stock. The numbers of shares given and received in the Exchange by the
Registrant were arbitrary and not based on assets, earnings or any other
criterion of value. Prior to the merger, Interbet owned 72.26 percent of the
issued and outstanding common stock of the Registrant and the directors and
officers of Interbet had been elected, immediately following the Exchange as the
directors and officers of the Registrant, resulting in control of the Registrant
by Interbet. Prior to the Stock Exchange Agreement and Plan of Reorganization
and the consummation of the transactions contemplated therein, there was no
relationship between the Registrant's then controlling stockholder and the
Interbet's directors, officers and stockholders. Prior to the merger, the
Registrant was in the business of looking for an acquisition of a business. As a
result of the merger, the Registrant is now engaged in the development of the
business in which Interbet has been engaged. As used herein, the business of the
Registrant includes the business of Interbet.
BUSINESS OF THE REGISTRANT
The Registrant is engaged, as a result of the merger with Interbet, in the
business of developing a Web site for bingo, a class II game of chance, under
agreement with the Thlopthlocco Tribal Town on tribal land in Okemah, Oklahoma.
The Registrant also intends to develop a Web site for class III casino type
games of chance similar to bingo and sports betting at a location
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outside of the United States, its territories and possessions. Both Web sites
are planned to be accessible to players around the world on the World Wide Web
of the Internet. The Registrant intends to be a significant provider of Internet
bingo and other waging games, through domestic and international partnerships.
The Internet is an increasingly significant global medium for communication and
commerce. The Internet is a rapidly growing global web of computer networks
which permits users to communicate throughout the world. Growth in Internet
usage has been driven by the emergence of the Web, which uses graphical user
interface technology to simplify the transmission and retrieval of information
over the Internet. Each Internet user has access to every other user and to
information contained on an increasing number of "host" or "server" computers.
Morgan Stanley estimates that the number of Web users will increase from
approximately twenty-three million at the end of 1996 to approximately forty six
million at the end of 1997 and to approximately 152 million by the year 2000.
This level of user traffic has given some Web sites a reach greater than major
metropolitan newscasts. For example, the Yahoo directory now servers over twenty
million page views daily. The Registrant believes that online gaming has
substantial revenue-generating potential. Frank Feather, keynote speaker at the
1996 World Gaming Congress & Expo, predicted that alternative delivery methods
for games of chance, like the Internet, could potentially account for twenty
percent of the gaming industry's revenue, or about $10 billion per year in
several years.
Tribal Gaming Agreement
The Thlopthlocco Tribal Town Business Committee of the Thlopthlocco Indian
Tribe of Oklahoma approved a resolution signed by the Registrant pursuant to
which the Tribe and the Registrant would enter into a joint venture for the
purpose of placing high stakes bingo Web site on the Internet. The operation of
the Web site would be at a facility to be built and equipped on tribal land with
$500,000 in financing provided by the Registrant with the assistance of a
consulting firm. The agreement provided that the Thlopthlocco Tribe will receive
sixty percent of net revenues from operations and the Registrant will receive
forty percent of net revenues. Due to a change in the structure of the
relationship between the Registrant and the Thlopthlocco Indian Tribe, in part
to assure compliance with Indian Gaming Regulatory Act of 1988, the Registrant
has voided the agreement under the resolution and is working on reducing the
current understanding with the Tribal Town Business Committee to a written
agreement.
Software Development Agreement
The Registrant has a letter of intent with nineCo, Inc., a developer of
multimedia software, for the development and licensing of customized software
for the Registrant's bingo Web site. The software is expected to allow bingo
games twenty-four hours a day, seven days a week for both cash and prizes. The
letter of intent sets forth all the essential terms of the relationship between
the Registrant and nineCo. Upon signing a formal agreement, the Registrant will
pay nineCo a fee of $40,000, continuing licensing fees of $8,000 per month
beginning thirty days later and an amount equal to eight percent of net revenues
payable quarterly, $28,000 to customize nineCo's software to the specifications
of the Registrant, and a software maintenance fee of $8,000 per month beginning
after delivery. The Agreement will be renewable annually for a fee of $50,000.
The Registrant would have the exclusive right to advertise its Web sites at the
Web site "Bingo Zone" operated by nineCo for a fee of $16,666 per month for six
months beginning at the time of delivery of the customized software to the
Registrant. nineCo would, under the agreement, deliver the Registrant's email
message to 500,000 users on nineCo's list, would hyper-link the
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Registrant's Web site from the Bingo Zone and provide the Registrant with a
twenty-five percent discount for Bingo Zone's published rates.
Background
Since 1988, when Congress passed legislation that gave Indian tribes the
right to negotiate for casinos on their land, more than fifty Indian casinos
have opened across the United States. The most notable is Foxwoods Casino in
Connecticut which is the largest casino in terms of revenue in the gaming
industry. According to Standard and Poors, these Indian facilities accounted for
more than $1.6 billion in revenues in 1994. Historically, the two largest
barriers for entering the casino industry were capital and licensing. The gaming
industry estimates the total cost of opening a world class casino hotel to be $2
billion, including land, building and equipment. By entering the gaming industry
through the Internet and not the traditional casino, the Registrant's costs are
expected to be dramatically less. After the implementation of its bingo Web
site, the Registrant intends to establish a Web site for keno and sports betting
at an operations facility to be located outside the United States.
Company Products
The software nineCo is planning to develop for the Registrant's bingo Web
site is expected to be extremely user-friendly, making it accessible for
everyone to play. The game itself is expected to allow the player a minimum of
one card for $1.00 and two cards for $3.00. The bingo games will vary in
complexity, from traditional bingo to a progressive, high stakes bingo and
cover-all game. The traditional bingo game is structured to pay out based upon
the number of individuals participating per game, with a minimum payout of $100.
This game will also limit the number of players per game, but will automatically
start an additional game to hold any overflow of players. The progressive game
is expected to allow varying costs per card (e.g., $1.00, $5.00, $10.00),
payouts according to the price per card, with the progressive jackpot being paid
to the maximum price per card. The coverall game is expected to draw a single
number daily, until an eventual winner is declared. The speed of the player's
home computer system is not expected to affect his or her chances of winning.
The Registrant intends to start a new bingo game every thirty minutes, in
addition to a cover-all game, for cash and prizes, to entice players to return
to its web site frequently. New gaming activities, such as keno and sports
betting, are expected to be implemented soon after the bingo Web site is
operational.
Bingo is the most widely acceptable form of gambling and is available
around the world in one form or another. Bingo is currently an extended-play
instant lottery game in most North American lottery jurisdictions. Its staying
power has been quite remarkable. The Registrant's transformation of bingo into a
Internet game is expected to be well received. Bingo on the Internet will enable
people to play without leaving the comfort of their homes or offices. The
Registrant hopes to penetrate new markets that prior to the Internet had limited
exposure to bingo. For example, the software to be developed by nineCo for the
Registrant entails multilingual versions for the World Wide Web. In addition,
the "Generation X" market, persons between the ages of eighteen to thirty-four
in the United States, reportedly has the fastest growing number of individuals
playing bingo. In 1995, bingo revenues were an estimated $5.6 billion. With the
expansion of other delivery systems, like the Internet, industry experts
estimate bingo revenues could top $10 billion in the next several years.
Advertising & Interactive Marketing
Advertising sales on the World Wide Web have been growing at an
unprecedented pace. Jupiter Communications, a New York market research firm,
predicts online advertising revenues, for both the
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World Wide Web and consumer online services, will top $5 billion by the year
2000. Major corporations, like Microsoft, MCI and The Gap are setting aside
significant funds to reach the online market with their ad messages, and the
Registrant expect to have a appealing demographic among its bingo playing
patrons for many potential advertisers. Advertising sales is expected to be
another revenue source for the Registrant.
Plan of Operation
The Registrant believes it is a pioneer in the emerging field of online
real-time casino gaming. The Registrant's focus is to bring gaming to the
Internet in a three phase strategy. Phase one objective is to establish a high
stakes bingo game on the Internet. Phase one is complete once on-line operations
begin with the bingo Web site. Phase two will be to establish a keno game on the
Internet. Since keno is a class III game, the Registrant plans to establish the
site for this venture outside the United States. The Registrant plans to enter
into a joint venture or acquisition of an existing Internet casino. Revisions of
the software being created for the Registrant by nineCo are expected to be
easily adjustable for keno. Keno is similar to bingo, has a large following and
is easy to play. Phase three of the operation is to establish a sports betting
operation using the off shore facility acquired during phase two of operations.
The demographics for sports betting and the Internet are uniquely compatible,
males who are an average age of twenty-six. The gaming industry estimates
illegal sports betting is between $30 billion and $100 billion a year.
The Registrant has evaluated various forms of bingo and prizing strategies.
The three forms of bingo with accompanying jackpots which are planned to be
offered on the Registrant Web site is expected to attract the widest range of
players. First, the cover-all game, which will draw a single number daily until
someone's bingo card has a cover-all. The game will be free but players must
enter the site each day to retrieve the called ball and place it on their
"card". The prize for the winner will be a trip for two to Hawaii, or its
equivalent. The objective of the game is to get people to the site to play the
other versions of bingo. The traditional bingo game will be played for $2 per
card and the jackpot determined by the number of players in the game, with a
minimum jackpot of $100 per game. The progressive game will have a varying pay
for play system, $1, $5 and $10 per card. The objective of the game will be to
get bingo with the fewest number of balls drawn. The prizes for this game will
be tiered toward the number of balls drawn. For example, a $5 card would win
$250,000 for a bingo called with only four balls drawn.
Phase two, development of keno for the Internet, will take place
concurrently with the development of bingo. The Registrant views keno as the
logical progression from high stakes bingo on the Internet. The games themselves
are extremely similar and have a large overlapping player base. Keno will
operate the same way the progressive bingo game is played, with a varying cost
system per card. The prize for each game will be determined by the price of the
ticket, numbers marked, and numbers drawn. The Registrant believes it can
capture significant revenues from keno's world wide popularity and the current
lack of any large scale gaming keno site on the Internet.
Phase three of the operation will be sports betting, utilizing the Internet
casino acquired during phase two. This will be a full sports betting operation
on football, basketball, hockey, baseball and horse racing, with parlay cards,
teaser cards and straight cards. The player will have the opportunity to bet on
hundreds of different sporting events and horse races every day of the week. The
Registrant expects the dramatic rise in the popularity of professional and
college football and basketball, along with the thrill of waging to be part of
the action, to add up to a boom in sports betting. The
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demographics of both the Internet and the average sports bettor are males in
their late twenties. Illegal wagering nationwide in is estimated anywhere from
$30 billion to $100 billion a year. By establishing a secure and easy way to
bet, the Registrant's sports betting operation is expected to be extremely
successful even though it may capture only a small share of the illegal sports
betting industry. The resulting decrease in revenues was attributable to the
interruption in business suffered by the Company and others during Hurricane
Luis in September 1995. In order to provide for such a natural catastrophe in
the future, the Company had established a second location in the Caribbean that
was used to back-up all wagering emanating over the telephone.
All of the Registrant's Web sites will be linked to each other, so players
can easily move from one site to another and enjoy all of the gaming offered by
the Registrant. The completion of the three stage operational plan should be ten
to twelve months.
Competition
Many segments of the gaming industry are characterized by intense
competition, with a large number of companies and syndicates offering the same
wagering or seeking to develop sports wagering. All of these entities in most
instances have vastly greater resources than the Registrant. The Company
presently estimates that gaming is permitted in almost all states in some form,
and gaming activities continue to expand. There are numerous national and
international corporations and entities engaged in the gaming business.
Competition in the gaming industry has increased substantially in recent years,
more competitors participate in the industry each year, and most of the
competitors have substantially greater financial and personnel resources than
the Company. Barriers to entry in Internet businesses are low. The most
venerable competition to a would-be Internet bingo entrepreneur - established
casino operations such as Harrah's, Mirage, and Ceasar's Palace are not expected
to be entering the Internet market in the near future. Bingo games are well
suited for the Internet. After properly developing the Registrant's bingo game
site, the Registrant could rival the best of commercially available casino
games, offering an opportunity for players to compete against other players
around the world.
Many forms of gaming are conducted both on and off Indian lands in the
United States which, in a broad sense, may be deemed to be in competition with
the Company's services. Although there is a general lack of reliable data
regarding the effect of any one form of gaming on the level of business
experienced by another, the Company is not aware of any data suggesting that
revenues from any specific form of gaming are particularly sensitive to the
level of wagering on other forms of gaming. The Company believes that its
MegaBingo, MegaCash and MegaBingo Lite are the only multi-hall, high stakes
bingo games currently available on or off Indian lands in the United States.
These games are played on real-time television with off-site players represented
by "proxies" at up to fifty Indian operated bingo halls across the United
States. This limits the number of people who can play the game because an actual
person must be present at an Indian Reservation Bingo Hall where the game is
being played. Also, it limits the amount of time in which the game can be
played. Interactive Gaming & Communications Corp., a publicly owned company,
operates an Internet "casino from a location in Granada, West Indies.
In March 1997, that company launched a live Internet casino which offered a
slot machine tournament. That company's public filings indicate that it plans to
introduce more live games of chance in the second quarter of 1997 and eventually
to develop an interactive gaming system for the Internet World Wide Web.
In addition to other bingo operations, the Company's activities may also
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compete with such other forms of gaming as lotto, table games, sports betting
and pari-mutuel wagering. The extent to which the various forms of gaming
conducted both on and off Indian lands in the United States may be competitive
with the Company's services will depend upon several factors, including the
nature and location of the gaming activity and the demographics of the players'
population.
Barriers to entry for Internet gaming ventures are low; some estimates
place the number of current on-line gaming web sites as high at approximately
600. Yahoo, one of the most popular Internet search services, lists twenty-seven
entries under the heading "Online Casinos". Of these, at least ten list the
ability to play for real money in the site description. Additional competition
will arise from the state lotteries, which are pursuing the traditional game of
bingo.
The Registrant believes it can distinguish itself from its competition on
the basis of its effective business relationships with customers and the legal
working relationship with the Thlopthlocco Tribe. The product differentiation of
the Registrant's bingo game offerings will stem from the quality and variation
of its bingo games, frequency of games played and the level of technical support
and service provided. The ability to provide large jackpot awards, the frequency
of jackpot "hits" and player appeal are expected to distinguish the Registrant's
Web site from its competitor's. Currently, the Registrant's main competition
will come from "MegaBingo", an online bingo site. MegabBingo's game is currently
played with proxies.
In addition, non-gaming entertainment competes with the gaming industry for
the public's disposable income. To the extent these other forms of entertainment
and non-Native American gaming are substitutes for Native American gaming, the
opportunities the Registrant has to sell Native American bingo and participate
in Native American casino development projects may be adversely affected.
Technology
Direct Connect- (Internet) will enable domestic and international players
to access the Registrant's Web site. The player must use the services of an
Internet service provider to provide access to the Internet, usually through a
telephone line connection. The majority of the Registrant's customers are
expected to be domestic, although the World Wide Web does allow for
international orders. This method of connectivity is extremely cost effective,
with users only being charged for a local phone call. Not all connectivity is on
a level platform. Users will have the full variety of modems and thus a wide
range of connection speeds. The introduction of additional client servers needs
to be timed according to increases in volume of players, so us never to deny
access. Wireless telephony technology is available in limited areas. Within five
years wireless telephone access is expected to become widely available and cable
television companies are expected to expand service by providing access to the
Internet.
Security Issues
The Registrant's Web site will feature "firewall" which will allow users to
play the games but will not allow them access to the software of the game. This
will prevent any potential tampering with the odds and payoff levels. Players'
credit card payments for games will be subject to prevailing security measures
for merchant transactions on the Internet. Cash prize payoff will be by credit
to the winner's credit card account.
Governmental Regulation
The operation of gaming on Indian reservations is subject to the Indian
Gaming Regulatory Act of 1988 (the "Gaming Act" or "IGRA"), which created the
National Indian Gaming Commission (the "NIGC") to promulgate regulations to
enforce certain aspects of IGRA. The NIGC became fully operational in February
1993. Shortly after IGRA was enacted, the
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Federal Communications Commission ("FCC") and the United States Postal Service
amended their regulations to allow the use of television, telephone and the
United States mail for certain purposes in regard to Indian gaming, as long as
the gaming was in compliance with IGRA. On questions of compliance, the FCC
defers to the NIGC. Due to the relatively recent adoption of the foregoing
provisions, it is anticipated that statutes and regulations may be amended in
the future to correct initial deficiencies or to respond to changes in the
gaming industry. Management of the Registrant believes that its bingo operations
will not be in violation of any regulations or laws, but there is a risk that
the regulations or laws may change, or that new interpretations may be given to
existing laws and regulations, which may restrict or prohibit the bingo games
currently planned by the Registrant.
IGRA classifies games that may be played on Indian land into three
categories. Class I gaming includes traditional Indian social and ceremonial
games and is regulated only by the tribes. Class II gaming includes bingo,
pull-tabs, lotto, punch boards, tip jars, instant bingo, certain card games
played under limited circumstances and other games similar to bingo if those
games are played at the same location where bingo is played. The Registrant's
bingo operations have been designed as Class II games, but the Registrant has
not sought an opinion from the NIGC that the Company's bingo games are, in fact,
within Class II. Class III gaming consists of all forms of gaming that are not
Class I or Class II, such as video casino games, slot machines, most table
games, keno and sports betting.
IGRA provides that Indian tribes may engage in Class II gaming, including
the conduct of high-stakes bingo games, if (i) the state in which the Indian
reservation is located permits such gaming for any purpose by any person, (ii)
the gaming is not otherwise specifically prohibited on the Indian reservation by
Federal law, (iii) the gaming is conducted in accordance with a tribal ordinance
which has been approved by the NIGC, and (iv) several other requirements are
met, including the requirement that an Indian tribe shall have the sole
proprietary interest and responsibility for the conduct of gaming, and that
primary management officials and key employees must be licensed by the tribe.
Under IGRA, the NIGC has the power to inspect and examine all Indian gaming
facilities, to conduct background checks on all persons associated with Class II
Indian gaming, to inspect, copy and audit all records of Indian gaming
facilities, and to hold hearings, issue subpoenas, take depositions and adopt
regulations in furtherance of its responsibilities. IGRA authorizes the NIGC to
impose civil penalties for violations of its regulations or of the Act, and also
imposes Federal criminal sanctions for illegal gaming on Indian reservations and
for theft from Indian gaming facilities.
IGRA also regulates Indian gaming management contracts. The Act provides
that the Gaming Commission may approve a management contract only after
determining that the contract provides for (ii) adequate accounting procedures
and verifiable financial reports, which must be furnished to the tribe, (ii)
tribal access to the daily operations of the gaming enterprise, including the
right to verify daily gross revenues and income, (iii) minimum guaranteed
payments to the tribe, which must have priority over the retirement of
development and construction costs, (iv) a ceiling on the repayment of
development and construction costs, (v) a contract term not exceeding five years
and a management fee not exceeding thirty percent of net revenues, provided that
the NIGC may approve up to a seven year term and a forty percent return to the
Manager if the Chairman of the NIGC is satisfied that the capital investment
required, and the income projections for the particular
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gaming activity, justify the larger percentage and longer term. Certain other
requirements for approval of a management contact are specified in the
regulations promulgated by the NIGC.
IGRA requires the NIGC to review all management contracts and collateral
agreements approved by the Bureau of Indian Affairs before the creation of the
NIGC to ensure that such agreements are in compliance with IGRA. The Registrant
will apply to NIGC for a determination that the planned agreement with the
Thlopthlocco Indian Tribe is a service agreement and not management contract,
thereby allowing the Company to obtain more favorable terms than would be
permitted under a management contact. There is no assurance however, that
reviews of the agreement by the NIGC or alternative interpretation of applicable
laws and regulations will not require substantial modifications to the
agreements and cause the operations of the Company to be less profitable or even
unprofitable.
The Registrant's business activities emanating from the United States
(customers' wagers) may be materially affected by regulations and actions that
may now be in place or will be promulgated in the future by the various local,
state, and/or federal government regulators. States which permit Class III
gaming of the type planned by the Registrant, such as keno and sports betting,
impose significant regulatory controls over casinos licensed to operate in their
jurisdictions. The Registrant plans to site its Web servers for keno and sports
betting at a casino location outside of the United States. The Registrant
expects to conduct its keno, casino games and sports betting through a wholly
owned subsidiary to be organized under, located in and licensed to conduct its
business by a foreign country. The subsidiary's business activities emanating
from outside the foreign country (customers' wagers and licensing) may become
materially affected by regulations, laws or statutes which may be promulgated by
the various country, state and/or local governments or their respective agencies
in the future where the customers are located, including the United States, or
the enforcement of such laws or regulations. The Registrant's legal position is
that its gaming and gambling operations, legally conducted in a foreign, are not
subject to regulation by the United States or its constituent states or
commonwealths.
The uncertainty of how the United States and other world governments will
look upon gambling on the Internet may deter major financial and/or investment
companies from participating in any capital venture with the Company.
Properties and Personnel
The Registrant is presently occuping a modest amount of office general
office space without charge in the offices of a consultant. At the time the
Registrant expects to relocate to offices which are adequate to house its
operations. At the present time, the Registrant has six employees.
Litigation at the date of this report
The Registant is not engaged in any litigation and is not aware of any
pending or threatended claims.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS.
The Registrant engaged Durland & Company, CPAs, P.A., with its offices in
Palm Beach, Florida as its independent accountant for the fiscal year ending
December 31, 1997. Durland & Company is the independent accountant for The
Registrant, a Nevada corporation, which the Registrant acquired on June 6, 1997
as a result of a merger. Prior to the engagement of Durland & Company, the
Registrant had never consulted Durland & Company regarding the application of
accounting principle or the type of audit opinion that might be rendered on the
Registrant's financial statements.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements:
Report of Independent Auditor
Balance Sheet of Interbet at April 30, 1997
Statement of Operations of Interbet, for the period since inception to April 30,
1997
Statement of Stockholders' Equity
Statement of Cash Flows for the period since inception to April 30, 1997
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Notes to Financial Statements of Interbet
(b) Pro forma financial information-
(1) For any transaction required to be described in answer to Item 2
above, furnish any pro forma financial information that would be required
pursuant to Article 11 of Regulation S-X.
(2) The provisions of (a)(4) above shall also apply to pro forma
financial information relative to the acquired business.
(c) Exhibits-
2. Stock Exchange Agreement and Plan of Reorganization between the Registrant
and Interbet, Inc., a Nevada corporation
3.1 Article of Merger of Interbet into the Registrant
3.2 Articles of Amendment changing name to Interbet, Inc.
10.1 Agreement with the Thlopthlocco Indian Tribe*
10.2 Letter of Intent with nineCo, Inc.*
*To be filed by amendment.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Interbet has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Interbet, Inc.
By: /s/ S.T. Deck, Jr.
S.T. Deck, Jr., President
June 19, 1997
<PAGE>
EXHIBIT INDEX
Description of Document-
Exhibit 2. Stock Exchange Agreement and Plan of Reorganization between the
Registrant and Interbet, Inc., a Nevada corporation
Exhibit 3.1 Article of Merger of Interbet into the Registrant
Exhibit 3.2 Articles of Amendment changing name to Interbet, Inc.
Exhibit 23. Consent of Durland & Company, CPAs, P.A.
<PAGE>
Exhibit 2.
Stock Exchange Agreement and Plan of Reorganization between the Registrant and
Interbet, Inc., a Nevada corporation.
<PAGE>
STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION
This Agreement, made and entered into as of June 6, 1997, by and between
BioChem, Inc., a Nevada corporation, ("Bio-Chem"), and Interbet, Inc., a Nevada
corporation, ("Interbet"). The plan of reorganization following the exchange of
stock herein provided shall be a reorganization within the meaning of the
applicable provisions of the Internal Revenue Code of 1986, as amended.
Interbet, as the owner of a majority of the issued and outstanding common stock
of Bio-Chem following the exchange of stock, shall be merged into Bio-Chem
pursuant to Nevada law and Bio-Chem shall be the surviving corporation, changing
its name to Interbet. It is understood and agreed by the parties that the
transaction contemplated herein is termed a "shell transaction" or reverse
merger/acquisition, the purpose of which is to provide a public trading market
for the shares of the surviving corporation once the merger transaction is
completed. In order to consummate the exchange of stock and plan of
reorganization and in consideration of the mutual benefits to be derived
therefrom and the mutual agreements hereinafter contained, Interbet and
Bio-Chem, by their respective boards of directors approve and adopt this
Agreement effective the closing date of June 6, 1997, and mutually covenant and
agree with each other as follows:
Shares to be issued and exchanged.
On the closing date, Interbet shall issue 1,600,000 shares of its
authorized and unissued common stock ("Interbet Stock") and deliver the Interbet
Stock to Bio-Chem in exchange for 3,200,000 shares of Bio-Chem's authorized and
unissued common stock ("Bio-Chem Stock"); and, Bio-Chem shall issue and deliver
the Bio-Chem Stock to Interbet in exchange for the Interbet Stock. The Interbet
Stock and the Bio-Chem Stock shall bear a restrictive legend pursuant to the
requirements of Regulation D under the Securities Act of 1933, as amended.
Following the exchange of stock contemplated by this Agreement, the Interbet
Stock shall represent 35.83 percent of Interbet's then issued and outstanding
common stock and the BioChem Stock shall represent 74.42 percent of Bio-Chem's
then issued and outstanding common stock. On the closing date and subject to the
exchange of stock,
(i) all of Bio-Chem's directors and officers shall tender their respective
resignations ("Retiring Management");
(ii) Interbet, as the majority stockholder of Bio-Chem, shall elect directors to
fill vacancies on Bio-Chem's board of directors so created and Bio-Chem's board
of directors, then constituted, shall elect Bio-Chem's officers;
(iii) Retiring Management shall deliver all of Bio-Chem's book and records to
the newly elected officers of Bio-Chem; and,
(iv) Bio-Chem's bank accounts shall be blocked from withdrawals and checks by
the Retiring Management, with telephonic confirmation thereof, and confirmation
of the account balances, made to the newly elected officers.
As soon as practicable following the exchange of stock contemplated by this
Agreement, the respective boards of directors of Interbet and of Bio-Chem shall
approve Articles of Merger, including a Plan of Merger, and file such Articles
with the Secretary of State of the State of Nevada in accordance with the laws
thereof. The Plan of Merger shall provide for the conversion of the 2,865,200
issued and outstanding shares of Interbet common stock held by persons other
than Bio-Chem into 2,865,200 shares of common stock of the surviving
corporation, for conversion of the 1,100,000 issued and outstanding shares of
Bio-Chem common stock held by persons other than Interbet into 1,100,000 shares
of common stock of the surviving corporation, and for the cancellation and
retirement of the Bio-Chem Stock and the Interbet Stock, with the result that
the surviving corporation shall have a total of 3,965,200 of common stock issued
and outstanding immediately following the effective date of the merger
contemplated by this Agreement, and the change of the name of Bio-Chem, as the
surviving corporation, to Interbet.
REPRESENTATIONS AND WARRANTIES OF INTERBET
To the best knowledge of Interbet, no representation or warranty by
Interbet in this Agreement, nor any statement, certificate, schedule or exhibit
hereto furnished or to be furnished by or on behalf of Interbet pursuant to this
Agreement, nor any document or certificate delivered to Bio-Chem or to Capital
General Corporation pursuant to this Agreement or in connection with actions
contemplated hereby, contains or shall contain any untrue statement of material
fact or omits or shall omit a material fact necessary to make the statement
contained therein not misleading. Interbet understands and agrees that Bio-Chem
is not engaged in any business, is without substantial assets, other than
$50,000 on deposit at First Security Bank Of Utah, or liabilities and with its
public shareholders is thus defined herein as a public "shell" corporation.
Interbet understands and agrees that Bio-Chem is a "shell" corporation and
makes no claim on any assets owned by Bio-Chem, other than its bank account,
previous to the closing contemplated herein. However, Interbet acknowledges and
represents it is aware of the risks of being a public company and understands
that regulatory efforts
<PAGE>
regarding public shell transactions similar to the transaction contemplated
herein has been and is currently being exerted by some states, the U.S.
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. (NASD).
There are no legal, administrative or other proceedings, or other claims,
judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving Interbet which are known, or which they have
reasonable grounds to know, of any basis for any such proceedings, or other
claims, judgments, injunctions or restrictions, except as attached hereto as
Exhibit A and made a part of this Agreement or otherwise disclosed herein.
Interbet understands and agrees that once the merger is completed, it, as a
constituent part of the surviving corporation, will be a public company subject
to the extensive, complex state, federal and NASD securities regulations
incumbent on public companies. In particular, the parties understand and agree
that a Form 8-K must be filed with the United States Securities and Exchange
Commission within fifteen days after closing which filing requires that audited
financial statements be filed within sixty days after the filing of the 8-K and
that such responsibility shall not be the responsibility of Capital General
Corporation, its officers, directors or employees nor of Retiring Management,
but the sole responsibility of the new officers and directors of Bio-Chem.
Interbet acknowledges that it has carefully evaluated its financial
resources and investment position and the risks associated with this transaction
and acknowledges that it is able to bear the economic risks and financial
requirements of, related to and resulting from this transaction.
Interbet represents and warrants that it is a corporation duly organized,
validly existing and in good standing under the laws of the state of Nevada and
that the execution and performance of this Agreement and the issuance of stock
contemplated hereby have been authorized by the board of directors of Interbet.
The Interbet Stock to be delivered pursuant to this Agreement, when so
delivered, will have been duly and validly authorized and issued by Interbet and
will be fully-paid and nonassessable.
Interbet hereby further acknowledges and agrees that no representations or
warranties have been made by Bio-Chem or Capital General Corporation as to the
benefits to be derived by Interbet in completing this transaction. It is
expressly understood and agreed that neither Capital General Corporation nor
Bio-Chem or Retiring Management have made any warranty or agreement, expressed
or implied, as to the tax or securities consequences of the transactions
contemplated by this agreement or the tax or securities consequences of any
action pursuant to or growing out of this agreement.
Interbet acknowledges receipt of a copy of Bio-Chem's filings and reports
pursuant to the Securities Exchange Act of 1934, as amended, in particular the
Prospectus dated June 30, 1993, the Form 10-K for the year ended December 31,
1996 and Form 8-K filed May 1, 1997 and May 15, 1997 in which it is disclosed
that, on February 8, 1996, David R. Yeaman, Secretary/Treasurer and a Director
of Bio-Chem, was charged in the U.S. District Court for the Eastern District of
Pennsylvania with conspiracy, wire fraud and fraud in the offer, purchase and
sale of securities, in violation of 18 U.S.C. ss.ss. 2, 371 and 1343, 15 U.S.C.
ss.ss. 77q(a), 77x, 78j(b) and 78ff, and 17 C.F.R. ss. 240.10b-5 (1986); and,
that, on April 16, 1997, Mr. Yeaman was convicted of one count of conspiracy,
five counts of wire fraud and three counts of securities fraud; and,, that,
while Mr. Yeaman has resigned his affiliation with Bio-Chem, Yeaman Enterprises
and Capital General Corporation, it is contemplated that he will provide
assistance as may be necessary for an orderly transition of their
<PAGE>
affairs and he may continue to be deemed an affiliate of Bio-Chem by virtue of
his familial and historical relationships with Bio-Chem, its shareholders,
officers and directors; as well as such other information as Interbet deems
necessary or appropriate as a prudent sophisticated and knowledgeable investor
in evaluating the acquisition of the Bio-Chem Stock and making this Agreement.
Interbet acknowledges Bio-Chem and Capital General Corporation have made
available the opportunity to obtain additional information to verify the
accuracy of the information contained in the filings and reports and to evaluate
the merits and risks of this transaction.
Interbet acknowledges that it has had the opportunity to ask questions of
Retiring Management and Capital General Corporation and has received
satisfactory answers from Retiring Management, Capital General Corporation, or
its and their affiliates, associates and employees concerning the terms and
conditions of this transaction and the information in the filings and reports.
Interbet covenants and warrants that the Bio-Chem Stock is being acquired
for Interbet's own account and for investment in connection with the merger and
not with the present view toward the sale or distribution in the United States
thereof and will not be disposed of except (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or (ii)
another transaction, which, in the opinion of counsel, is exempt from
registration under the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. In order to
effectuate the covenants of this paragraph, an appropriate endorsement will be
placed on the certificates for the Bio-Chem Stock delivered to Interbet pursuant
to this Agreement and stop transfer instructions shall be placed with the
transfer agent for the securities. Interbet is aware that the Bio-Chem Stock
will not have been registered pursuant to the Securities Act of 1933, as
amended; and, in the event the merger is not consummated, under current
interpretations and applicable rules, particularly Rule 144, it will probably
have to retain such shares for a period of at least one year and at the
expiration of such one-year period sale may be confined to brokerage
transactions of limited amounts requiring a notification filing on Form 144 with
the Securities and Exchange Commission and such disposition may be available
only if Bio-Chem is current in its filings with the Securities and Exchange
Commission and Interbet is aware of Rule 144 issued by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the other
limitations imposed thereby on its disposition of the Bio-Chem Stock.
Interbet is aware that there can be no assurance regarding the individual
tax consequences of this transaction, nor can there be any assurance that the
Internal Revenue Code or the regulation promulgated thereunder will not be
amended in such manner as to deprive Interbet of any tax benefit that might
otherwise be received. Interbet is relying upon the advice of their personal tax
advisor with respect to the tax aspects of this transaction.
Interbet acknowledges that it is its responsibility to comply with the
appropriate state and federal securities laws, as well as NASD rules and
regulations, particularly secondary trading requirements. Interbet agrees that
the surviving corporation shall be listed in either Moody's Investor Services or
Standard and Poors, exempting secondary trading of the surviving corporation's
stock in those states providing for such secondary trading exemption.
REPRESENTATIONS AND WARRANTIES OF BIO-CHEM
To the best knowledge of Bio-Chem, no representation or warranty by
Bio-Chem in this Agreement, nor any statement, certificate, schedule or exhibit
hereto furnished or to be furnished by or on behalf of Bio-Chem pursuant to this
<PAGE>
Agreement, nor any document or certificate delivered to Interbet pursuant to
this Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statement contained therein not misleading.
Bio-Chem is current in its filings and reports required pursuant to the
Exchange Act, all of which filings and reports contain all the information
required to be contained therein and do not contain any untrue statement of
material fact or omits or shall omit a material fact necessary to make the
statement contained therein not misleading. None of such filings and reports
are, to the best knowledge of Bio-Chem, the subject of comments by the
Commission staff which have not been satisfied, nor the subject of any stop
order or other administrative proceeding.
To the knowledge of Retiring Management, Bio-Chem is not a party to nor
bound by any agreement, deed, lease, power of attorney or other instrument other
than which is disclosed in its filings and reports pursuant to the Exchange Act.
Bio-Chem has executed an Agreement with National Stock Transfer, Inc., a
transfer agency company affiliated with Capital General Corporation. A copy of
this agreement has been made available for inspection by Interbet.
There are no legal, administrative or other proceedings, or other claims,
judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving Bio-Chem which are known, or which they have
reasonable grounds to know, of any basis for any such proceedings, or other
claims, judgments, injunctions or restrictions, except as disclosed in BioChem's
filings and reports pursuant to the Exchange Act.
Bio-chem represents and warrants that it is a corporation duly organized,
validly existing and in good standing under the laws of the state of Nevada and
that the execution and performance of this Agreement and the issuance of stock
contemplated hereby have been authorized by the board of directors of Bio-Chem.
The Bio-Chem Stock to be delivered pursuant to this agreement, when so
delivered, will have been duly and validly authorized and issued by BioChem and
will be fully-paid and nonassessable.
Bio-Chem hereby further acknowledges and agrees that no representations or
warranties have been made by Interbet as to the benefits to be derived by
BioChem in completing this transaction. It is expressly understood and agreed
that neither Interbet nor its officers or agents have made any warranty or
agreement, expressed or implied, as to the tax or securities consequences of the
transactions contemplated by this Agreement or the tax or securities
consequences of any action pursuant to or growing out of this Agreement.
Bio-Chem covenants and warrants that the Interbet Stock is being acquired for
Bio-Chem's own account and for investment in connection with the merger and not
with the present view toward the sale or distribution in the United States
thereof and will not be disposed of except:
(i) pursuant to an effective registration statement under the Securities Act of
1933, as amended, or
(ii) another transaction, which, in the opinion of counsel, is exempt from
registration under the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
In order to effectuate the covenants of this paragraph, an appropriate
endorsement will be placed on the certificates for the Interbet Stock delivered
to Bio-Chem pursuant to this Agreement and stop transfer instructions shall be
placed with the transfer agent for the securities. Bio-Chem is aware that the
Interbet Stock will not have been registered pursuant to the Securities Act of
1933, as amended; and, in the event the merger is not consummated, under current
interpretations and applicable rules, particularly Rule 144, it will probably
<PAGE>
have to retain such shares for a period of at least one year and at the
expiration of such one-year period sale may be confined to brokerage
transactions of limited amounts requiring a notification filing on Form 144 with
the Securities and Exchange Commission and such disposition may be available
only if Interbet is current in its filings with the Securities and Exchange
Commission and Interbet is aware of Rule 144 issued by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the other
limitations imposed thereby on its disposition of the Interbet Stock.
Bio-Chem understands that neither Interbet nor any of its securities are
registered pursuant to nor is Bio-Chem a reporting company under any federal
securities law.
Bio-Chem is aware that there can be no assurance regarding the individual
tax consequences of this transaction, nor can there be any assurance that the
Internal Revenue Code or the regulation promulgated thereunder will not be
amended in such manner as to deprive Bio-Chem or its stockholders of any tax
benefit that might otherwise be received. Bio-Chem is relying upon the advice of
their personal tax advisor with respect to the tax aspects of this transaction.
Bio-Chem represents and warrants that a "Complaint and Order Denying
Exemptions and to Cease and Desist in the Matter of Capital General Corporation,
David Rex Yeaman et al. filed by the State of New Jersey in January, 1994 was
resolved as disclosed in the Bio-Chem's Form 10-Q/A filing with the SEC dated
November 28, 1994. Bio-Chem agrees to provide any supplemental information which
may be requested by Interbet relating to any matter discussed herein.
ACTIONS PRIOR TO CLOSING
Interbet and Bio-Chem, respectively, shall duly comply with all applicable
laws as may be required for the valid and effective exchange of stock and merger
contemplated by this Agreement.
The representations and warranties made by the respective parties in this
Agreement or given on its behalf hereunder shall be substantially accurate in
all material respects on and as of the closing date with the same effect as
though such representations and warranties had been made or given on and as of
the closing date.
Interbet and Bio-Chem, respectively, shall perform and comply with all its
obligations under this Agreement which are to be performed and complied with by
it prior to or on the closing date including the delivery of its documents
specified herein.
Law governing.
It is understood and agreed that both parties are Nevada corporations. This
agreement may not be modified or terminated orally, and shall be construed and
interpreted according to the laws of the State of Nevada and enforced in its
courts.
Arbitration.
Any and all disputes and controversies of every kind and nature between the
parties hereto arising out of or relating to this Agreement relating to the
existence, construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation, breach, continuance or termination
thereof shall be subject to an arbitration mutually agreeable to the parties or,
in the absence of such mutual agreement, then subject to arbitration in
accordance with the rules of the American Arbitration Association. It is the
intent of the parties hereto and the purpose of this provision to make the
submission to arbitration of any dispute or controversy arising hereunder an
express condition precedent to any legal or equitable action or proceeding of
any nature whatsoever.
Assignment, amendment and modification.
This agreement shall not be assigned
<PAGE>
by any party without the written consent of the other. The parties may amend,
modify and supplement this agreement in such manner as may be agreed upon by
them in writing.
Termination and abandonment.
This Agreement may be terminated and the transactions provided for by this
Agreement may be abandoned without liability on the part of any party to any
other, at any time before the closing date by mutual consent of the parties. In
the event of termination and abandonment by any party as herein provided,
written notice shall forthwith be given to the other party, and each party shall
pay its own expenses incident to preparation for the consummation of this
agreement and the transactions contemplated hereunder. In the event that this
Agreement has not been completed by the closing date or within thirty days
thereafter, this Agreement and the transactions contemplated hereby shall be
deemed to have been abandoned and neither party shall be under any further
obligation to the other.
Notices.
All notices, requests, demands and other communications hereunder shall be
deemed to have been duly given, if delivered by hand or mailed, certified or
registered mail with postage prepaid:
(a) If to Bio-Chem: 1800 E. Sahara, Suite 107, Las Vegas, Nevada 89104
(b) If to Interbet: Ste 110, 1777 Botelho Drive, Walnut Creek, California 94596
Entire agreement.
This instrument embodies the entire agreement between the parties hereto
with respect to the transactions contemplated herein, and there have been and
are no agreements, representations or warranties between the parties other than
those set forth or provided for herein. Any announcements, amendments or
modifications shall be set forth in writing and approved by the parties hereto.
This agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Further documents. The parties agree to execute any
and all other documents and to take such other action or corporate proceedings
as may be necessary or desirable to carry out the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be duly executed all as of the day and year first above written.
[SEAL]
Interbet, Inc.
Attest:
By: /s/ S.T. Deck, Jr.
S.T. Deck, Jr., President
/s/ Michael Vishno
Michael Vishno, Secretary
[SEAL]
Bio-Chem, Inc.
Attest:
By: /s/ Krista C. Nielson
Krista C. Nielson
/s/ Sasha Belliston
Sasha Belliston, Secretary
Exhibit 3.1
Article of Merger of Interbet into the Registrant
<PAGE>
ARTICLES OF MERGER
Pursuant to the provisions of NRS ss.78.458, the Domestic and Foreign
Corporation Laws, the undersigned constituent corporations hereby adopt the
following Articles of Merger for the purpose of merging into one corporation.
1 The names of the constituent corporations which are parties to the merger are:
Bio-Chem Inc., a Nevada corporation, the surviving corporation, and Interbet,
Inc., a Nevada corporation, the absorbed corporation.
2 The Plan of Merger is as follows:
Interbet, Inc. shall be merged into Bio-Chem, Inc. and shall cease upon the
effective date of the merger to exist as a separate corporation. The issued and
outstanding shares of Bio-Chem, Inc.'s common stock owned by persons other than
Interbet, Inc. shall remain unchanged, the issued and outstanding shares of
Interbet, Inc.'s common stock owned by persons other than Bio-Chem, Inc. shall
be converted into and become shares of common stock of Bio-Chem, Inc. on a share
for share basis and the issued and outstanding shares of common stock of each
constituent corporation owned by the other constituent corporation shall be
void, canceled, and with respect to the shares of Bio-Chem, Inc.'s common stock
shall be restored to authorized but unissued common stock. The merger shall be
accounted for as a reverse merger.
3 The merger shall be effective on the date the Articles of Merger are filed
with the Secretary of State of Nevada.
4 The Plan of Merger was approved on June 12, 1997 by the respective boards of
directors of the constituent corporations in the manner prescribed by the Nevada
Domestic and Foreign Corporation Laws.
5 The Plan of Merger was submitted to the respective holders of the issued and
outstanding common stock of the constituent corporations, being the only class
of stock entitled to vote on the Plan and there being no shares are entitled to
vote as a separate class. With respect to each of the constituent corporations,
the number of shares of common stock outstanding and number of undisputed votes
cast for the Plan, such number of votes being sufficient in the case of each
corporation for approval of the Plan, is as follows:
Name of corporation Total issued and Total votes for
outstanding approval
Bio-Chem, Inc. 4,300,000 3,200,000
Interbet, Inc. 4,465,200 2,233,000
6 The Articles of Incorporation of the surviving corporation shall not be
changed by the merger. IN WITNESS WHEREOF, the undersigned Presidents, with the
attestations of the Secretaries, of the respective constituent corporations,
duly authorized hereunto, have executed the within Articles of Merger on June
12, 1997.
<PAGE>
(CORPORATE SEAL) BioChem, Inc.
ATTEST:
By: /s/ S.T. Deck, Jr.
S.T. Deck, Jr., President
/s/ Michael Vishno
Michael Vishno, Secretary
(CORPORATE SEAL) Interbet, Inc.
ATTEST:
By: /s/ S.T. Deck, Jr.
S.T. Deck, Jr, President
/s/ Michael Vishno
Michael Vishno, Secretary
STATE OF CALIFORNIA }
COUNTY OF CONTRA COSTA } ss:
The foregoing instrument was acknowledged before me, the undersigned Notary
Public, this 12 day of June, 1997, by S.T. Deck, Jr, as President of BioChem,
Inc., a Nevada corporation, on behalf of the corporation. He is personally
known to me [X] or produced ____________________ (e.g. driver's license) as
identification and did not take an oath.
(SEAL)
- -----------------------------------
/s/ Daniel C. Sanders
(print name) Daniel C. Sanders
Notary Public; Serial Number 1047149
Commission Expires December 14, 1998
Exhibit 3.2
Articles of Amendment changing name to Interbet, Inc.
<PAGE>
ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF BIO-CHEM, INC.
Pursuant to the provisions of NRS ss.78.458, the Domestic and Foreign
Corporation Laws, Bio-Chem, Inc., a Nevada corporation, does hereby amend its
Articles of Incorporation as follows:
1. The name of the corporation is Bio-Chem, Inc.
2. This Amendment to the Articles of Incorporation was duly approved and
adopted on June 18, 1997, by a vote of the holders of 3,200,000 shares, being a
majority and sufficient for all purposes, of the issued and outstanding common
stock being the only class of capital stock entitled to vote hereon, pursuant to
NRS ss.78.320-2, by written consent without a meeting, pursuant to approval and
recommendation of the Board of Directors.
3. Article I of the Articles of Incorporation, as originally file, be, and
it hereby is, amended to change the name of the Corporation to Interbet, Inc.
4. Except as provided herein, the Articles of Incorporation of the Corporation
shall be, and are, unchanged.
IN WITNESS WHEREOF, the undersigned President, with the attestation of the
Secretary of the Corporations, duly authorized hereunto, have executed the with-
in Articles of Amendment on June 12, 1997, and caused said Articles to be filed
in the office of the Secretary of State for the State of Nevada, effective upon
the filing hereof.
(CORPORATE SEAL) BioChem, Inc.
ATTEST:
By: /s/ S.T. Deck, Jr.
S.T. Deck, Jr., President
/s/ Michael Vishno
Michael Vishno, Secretary
STATE OF CALIFORNIA }
COUNTY OF Contra Costa } ss:
The foregoing instrument was acknowledged before me, the undersigned Notary
Public, this 12 day of June, 1997, by S.T. Deck, Jr, as President of BioChem,
Inc., a Nevada corporation, on behalf of the corporation. He is [X] personally
known to me or [ ] produced ____________________ (e.g. driver's license) as
identification and did not take an oath.
(SEAL)
- -----------------------------------
/s/ Daniel C. Sanders
(print name) Daniel C. Sanders
Notary Public; Serial Number 1047149
Commission Expires December 14, 1998
Exhibit 23.
Consent of Durland & Company, CPAs, P.A.
<PAGE>
DURLAND & COMPANY, CPAs, P.A.
340 Royal Palm Way, Suite 201
Palm Beach, FL 33480
(561) 822 9995 Fax (561) 822 9995
The Baord of Directors
Interbet, Inc.
Walnut Creek, California
Gentlemen:
We hereby consent to the use of our report dated May 20, 1997 on the financial
statements of the Company in the Form 8-K being submitted to the US Securities
and Exchange Commission by the Company.
/s/ Durland & Company, CPAs, P.A.
Durland & Company, CPAs, P.A.
June 20, 1997
Palm Beach, Florida
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Auditor................................................F-2
Balance Sheet................................................................F-3
Statement of Operations......................................................F-4
Statement of Stockholders' Equity............................................F-5
Statement of Cash Flows......................................................F-6
Notes to Financial Statements................................................F-7
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITOR
TO: The Board of Directors and Stockholders
InterBet, Inc.
Walnut Creek, California
We have audited the accompanying balance sheet of InterBet, Inc., a development
stage enterprise, (the "Company") as of April 30, 1997 and the related
statements of operations, stockholders' equity and cash flows for the period
since inception then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of April 30,
1997 and the results of its operations and its cash flows for the period since
inception then ended in conformity with generally accepted accounting
principles.
/s/ Durland & Company, CPAs, P.A.
Durland & Company, CPAs, P.A.
Palm Beach, Florida
May 20, 1997
F-2
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Balance Sheet
April 30,
1997
------------------------
ASSETS
CURRENT ASSETS
Cash $ 3,660
Note payable proceeds receivable 130,900
------------------------
Total Current Assets 134,560
------------------------
OTHER ASSETS
None
Total Assets $ 134,560
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
None $ 0
------------------------
Total Current Liabilities 0
------------------------
LONG-TERM LIABILITIES
Notes payable (note 1b) 140,000
------------------------
Total Long-Term Liabilities 140,000
------------------------
Total Liabilities 140,000
------------------------
STOCKHOLDERS' EQUITY
Common stock, no par value, authorized 10,000,000
shares; 2,865,200 at April 30, 1997 issued and
outstanding. (note 2) 191,112
Preferred stock, no par value, authorized 1,000,000
shares; 0 shares issued and outstanding. (note 2) 0
Deficit accumulated in the development stage (196,552)
------------------------
Total Stockholders' Equity (5,440)
------------------------
Total Liabilities and Stockholders' Equity $ 134,560
========================
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Statement of Operations
Period since inception ended April 30,
1997
REVENUE
Revenue $ 0
---------------
Total revenue 0
COST OF SALES 0
---------------
Gross profit/(loss) 0
EXPENSES
Advertising and marketing 475
Consultants 191,112
Office expenses 4,965
Miscellaneous 0
---------------
Total expenses 196,552
---------------
Net loss before tax benefit (196,552)
---------------
Income tax benefit (note 3) 0
---------------
Net loss $ (196,552)
===============
Weighted average number of
shares outstanding 2,865,200
===============
Net loss per share $ (0.07)
====
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Statement of Stockholder's Equity
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Shares of Total
Common Common Preferred Accumulated Stockholders'
Stock Stock Stock Deficit Equity
BALANCE, June
10, 1996 0 $ 0 0 0 0
Capital investment:
June 1996 - founders 2,865,200 191,112 0 0 191,112
Net loss 0 0 0 (196,552) (196,552)
------------- ------------- ------------- ------------------ -----------------
BALANCE, April
30, 1997 2,780,000 $ 191,112 0 (196,552) (5,440)
============= ============= ============= ================== =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Statement of Cash Flows
Period since inception ended April 30,
1997
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
Net loss $ (196,552)
Adjustments to reconcile net loss to net
cash used for operating activities:
Stock issued for services 191,112
Changes in operating assets and liabilities:
(Increase) decrease in note payable proceeds receivable (130,900)
--------------
Net cash used for development activities (136,340)
--------------
CASH FLOWS FROM INVESTING ACTIVITIES:
None
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable issued for cash 140,000
--------------
Net cash provided by financing activities 140,000
--------------
Increase (decrease) increase in cash 3,660
CASH, beginning of period 0
--------------
CASH, end of period $ 3,660
==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash $ 0
==============
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Notes to Financial Statements
(1) Summary of significant accounting policies
The Company InterBet, Inc. was incorporated on June 10, 1996 in Nevada and
conducts business from its headquarters in Walnut Creek, California.
The financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the
dates of the statements of financial condition and revenues and
expenses for the years then ended. Actual results could differ
significantly from those estimates. The following summarize the more
significant accounting and reporting policies and practices of the
Company:
a) Fixed assets Fixed assets are expected to be recorded at cost.
Depreciation will computed by the straight-line method over the
estimated useful lives of the assets, generally three or five years.
Expenditures for maintenance and repairs will be charged to operations
as incurred.
b) Notes payable The Company issued notes payable in exchange for cash.
The long term debentures carry a stated rate of 12% and mature on
August 15, 2001. The interest is payable semi-annually commencing nine
months after full subscription amounting to $5 million. The balance
outstanding at April 30, 1997 is $140,000. The debentures currently
outstanding are convertible into 39,206 shares of the Company's common
stock at the descretion of the debenture holders. The debentures will
automatically convert to shares of common stock if the Company
completes an initial public offering which nets the Company at least
$9.8 million and is priced at $7 per share or more; or if the Company's
common stock is listed on a national stock exchange, or is listed on
NASDAQ with a minimum bid/ask price of $7 per share and has a public
float of at least 1 million shares.
c) Net loss per share Net loss per share is computed by dividing the net
loss by the number of shares outstanding during the period.
(2) Stockholders' equity The Company has authorized 10,000,000 shares of no
par value common stock and 1,000,000 shares of no par preferred stock.
In June 1996, the Company issued 2,865,200 shares of common stock in
exchange for services previously provided to the Company valued at
$191,112. In conjunction with the issuance of the debentures, the
Company has issued 7,840 warrants convertible into 7,840 shares of the
Company's common stock.
(3) Income taxes The amount recorded as deferred income tax asset at April
30, 1997, $78,600, represents the amount of tax benefit of loss
carry-forwards. The Company has established a $78,600 valuation
allowance against this asset, as the Company has no history of
profitable operations. At April 30, 1997, the Company has a net
operating loss carry-forward for income tax purposes of approximately
$196,552, expiring in 2012.
(4) License agreements In July 1996, the Company entered into a license
agreement with the Thlopthlocco Tribal Town Business Committee,
(Tribe). In this agreement the Company agreed to contract with
ElasticMEDIA Inc. to develop, maintain and oversee the implementation
of the software and hardware configuration of the Internet, or World
Wide Web, (WWW), aspects of the on-line bingo operations. The net
profits of the on-line bingo operation are to be shared 40% to the
Company and 60% to the Tribe. The Company is required to pay royalties
to the ElasticMEDIA quarterly based on gross sales. The royalty
percentages are: 3% of the first $1 million; 2% of the next $4 million;
1.75% of the next $5 million and 1.5% of all revenues over $10 million.
This agreement is unilaterally cancellable with written notice by
either party should the royalty payments due the Company are less than
$25,000 in any year after the second anniversary date of the agreement.
F-7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the audited
financial statements of Interbet, Inc. for April 30, 1997 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000894562
<NAME> InterBet, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> JUN-10-1996
<PERIOD-END> APR-30-1997
<EXCHANGE-RATE> 1.000
<CASH> 3,660
<SECURITIES> 0
<RECEIVABLES> 130,900
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 134,560
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 134,560
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 191,112
<OTHER-SE> (196,552)
<TOTAL-LIABILITY-AND-EQUITY> 134,560
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 196,552
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (196,552)
<INCOME-TAX> 0
<INCOME-CONTINUING> (196,552)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (196,552)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
