SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-55254-43
INTERBET, INC.
(Exact name of registrant as specified in its charter)
NEVADA 87-0485308
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
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, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
5,500,000 shares at August 13, 1997
<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
INDEX TO FINANCIAL STATEMENTS
Page
Balance Sheet................................................................F-2
Statement of Operations......................................................F-3
Statement of Stockholders' Equity............................................F-4
Statement of Cash Flows......................................................F-5
Notes to Financial Statements................................................F-7
F-1
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Balance Sheet
June 30,
1997
------------------------
ASSETS (Unaudited)
CURRENT ASSETS
Cash $ 60,156
Note payable proceeds receivable 120,900
------------------------
Total Current Assets 181,056
------------------------
OTHER ASSETS
Deposit on deferred offering costs 175,000
------------------------
Total Other Assets 175,000
------------------------
Total Assets $ 356,056
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Bank line of credit $ 175,000
------------------------
Total Current Liabilities 175,000
------------------------
LONG-TERM LIABILITIES
Notes payable (note 1b) 140,000
------------------------
Total Long-Term Liabilities 140,000
------------------------
Total Liabilities 315,000
------------------------
STOCKHOLDERS' EQUITY
Common stock, no par value, authorized 10,000,000
shares; 4,281,054 at June 30, 1997 issued and
outstanding. (note 2) 423,312
Preferred stock, no par value, authorized 1,000,000
shares; 0 shares issued and outstanding. (note 2) 0
Deficit accumulated in the development stage (382,256)
------------------------
Total Stockholders' Equity 41,056
------------------------
Total Liabilities and Stockholders' Equity $ 356,056
========================
The accompanying notes are an integral part of the financial statements
F-2
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Statement of Operations
Period since inception ended June 30,
1997
------------------------
REVENUE (Unaudited)
Revenue $ 0
------------------------
Total revenue 0
COST OF SALES
Cost of sales 0
------------------------
Gross profit/(loss) 0
EXPENSES
Bank charges 145
Consultants 364,886
Dues, fees, licenses and taxes 150
Office expenses 3,916
Professional fees 1,875
Rent 9,454
Travel and entertainment 1,830
Miscellaneous 0
-----------------------
Total expenses 382,256
-----------------------
Net loss before tax benefit (382,256)
-----------------------
Income tax benefit (note 3) 0
-----------------------
Net loss $ (382,256)
=======================
Weighted average number of shares outstanding 4,281,054
=======================
Net loss per share $ (0.09)
=======================
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Statement of Stockholder's Equity
<TABLE>
<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
June 1997 - via S-8 1,050,000 172,200 0 0 172,200
June 1997 - for cash 365,854 60,000 0 0 60,000
Net loss 0 0 0 (382,256) (382,256)
------------- ------------- ------------- ------------------ -----------------
BALANCE, June
30, 1997 Unaudited) 4,281,054 $ 423,312 0 (382,256) 41,056
============= ============= ============= ================== =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Statement of Cash Flows
Period since inception ended June 30,
<TABLE>
<S> <C>
1997
----------------
CASH FLOWS FROM DEVELOPMENT ACTIVITIES: (Unaudited)
Net loss $ (382,256)
Adjustments to reconcile net loss to net cash used for operating activities:
Stock issued for services 363,312
Changes in operating assets and liabilities:
(Increase) decrease in note payable proceeds receivable (120,900)
----------------
Net cash used for development activities (139,844)
----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit on deferred offering costs (175,000)
----------------
Net cash used by investing activities (175,000)
----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock sold for cash 60,000
Notes payable issued for cash 315,000
----------------
Net cash provided by financing activities 375,000
----------------
Increase (decrease) increase in cash 60,156
CASH, beginning of period 0
----------------
CASH, end of period $ 60,156
================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash $ 0
================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
InterBet, Inc.
(A development stage enterprise)
Notes to Financial Statements
(Unaudited)
(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 financial statements for the period since inception
ended June 30, 1997 include all adjustments which in the opinion of
management are necessary for fair presentation. 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. In June 1997 the Company issued 1,050,000
shares of common stock under an S-8 registration as compensation to
certain consultants in lieu of cash. In June 1997, the Company issued
365,854 shares of common stock in exchange for $60,000 in cash.
(3) Income taxes The amount recorded as deferred income tax asset at June
30, 1997, $152,900, represents the amount of tax benefit of loss
carry-forwards. The Company has established a $152,900 valuation
allowance against this asset, as the Company has no history of
profitable operations. At June 30, 1997, the Company has a net
operating loss carry-forward for income tax purposes of approximately
$382,256, 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
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Registrant is development stage company. The Registrant's plan of
operation of the next twelve months is to establish a rapid market share in
internet gambling. The Registrant has planned the following aggressive
implementation schedule for that purpose:
Bingo
September 1997, official introduction of Beta test of on line software engine.
October 1997, launch of operations from host server on tribal land.
December 1997, advertising blitz to internet bingo customers.
March 1998, conduct on month of $1,000,000 promotions.
Casino
November 1997, official introduction of Beta test of on line software engine.
January 1998, launch of operations from host server on Antigua, West Indies.
April 1998, advertising blitz to internet gaming customers.
July 1998, conduct on month of $1,000,000 promotions.
The Registrant will require funding to impliment its plan of operation. There is
no assurance such funding will be available on reasonable terms, if at all.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable to the Registrant.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
The Registrant is not engaged in any legal proceedings, and is not aware of
any threatened or pending claims or assessments.
Item 2. Changes in Securities.
There has been no change in the Registrant's outstanding securities or in the
rights evidenced thereby.
<PAGE>
(c) The Registrant entered into a statutory merger during the period in which
the common stock of the acquired company was changed into common stock of the
Registrant.
Item 3. Defaults Upon Senior Securities.
The Registrant is not in default on any senior securities.
Item 4. Submission of Matters to a Vote of Security Holders.
The Registrant did not submit any matters to a vote of its security holders.
Item 5. Other Information.
The Registrant has been informed by a representative of the Thlopthloccos Tribe
of American Indians that their request for review and approval of the tribal
gaming ordinance has been denied by the National Indian Gaming Commission. To
provide the requisite Class II gaming license for the operation of a
bingo-for-cash game on the internet, the Registrant has a letter of intent to
negotiate an exclusive agreement with the Big Lagoon Rancheria Tribe of
Trinidad, California which, on August 5, 1994, received approval of its gaming
ordinance and has an established Class II license. Terms of the agreement will
allow the Registrant to proceed with its planned operations and in compliance
with the Indian Gaming Regulatory Act. The letter of intent states that it is
the intention of the parties that a completed contract be signed within ten
days.
The Registrant has received approval in principle, subject to receipt of full
documentation and completion of due diligence, of a license from the Free Trade
and Processing Zone in Antigua, West Indies, to operate an off-shore internet
casino gaming operation for all types of casino gaming for cash.
S.T. Deck, Jr., resigned from the Board of Directors and as an officer on July
1, 1997 to pursue other business interests. Mark A. Popp was elected as a
director and president to replace Mr. Deck.
Item 6. Exhibits and Reports on Form 8-K.
The Company hereby incorporates its Form 8-K filed on June 24, 1997.
Exhibits
(10) Material contracts
10.1 Agreement with the Big Lagoon Rancheria Tribe
10.2 Approval of application by the Free Trade & Processing Zone, Antigua, West
Indies
(27) Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERBET, INC.
(Registrant)
/s/ Mark A. Popp
Mark A Popp, President and Chief Executive Officer
Date: August 13, 1997
/s/Jack W. Deck
Jack W. Deck, Chief Accounting Officer and Principal Financial Officer
Date: August 13, 1997
<PAGE>
Exhibit 10.1
AGREEMENT
This agreement is made as of August 8, 1997 at Walnut Creek, California, between
InterBet, Inc., a Nevada Corporation having its principal office in Walnut Creek
, California (InterBet), and The Big Lagoon Rancheria Tribe (Tribe), a federally
recognized tribe located in Trinidad, California.
Whereas: The Big Lagoon Rancheria is governed by the Tribal Council which
is empowered to enact all ordinances and resolutions necessary
for adopting Gaming ordinances, and such ordinance has been
adopted, and;
Whereas: The National Indian Gaming Commission has approved the tribal
gaming ordinance adopted August 5, 1994 by the Tribe, and;
Whereas: InterBet desires assist in the conduct of a Bingo for cash game
on the World Wide Web Internet in conjunction with the Tribe and
by agreement with the Tribe to share in the net proceeds of such
gaming.
NOW, THEREFORE, the parties agree as follows:
-Article One-
USE OF LICENSE
1.1 Tribe agrees to use its gaming license to conduct, via the World Wide Web
Internet, Bingo for cash and such other games as may be approved for gaming on
Indian lands as defined in the Indian Gaming Regulatory Act (IGRA).
-Article Two-
FEES
2.1 InterBet agrees to pay all costs associated with the establishment and
operation of thisenterprise, and to pay to the Tribe no less than sixty percent
(60%) and no more than seventy percent (70%) of net proceeds, whichever shall be
allowed by the guidelines of the National Indian Gaming Commission.
2.2 A bank such as Monument National Bank of Ridgecrest, California, shall
receive and hold all funds payable to the Tribe as determined by monthly audit.
2.3 InterBet agrees to pay the sum of Five Thousand Dollars ($5,000.00) to the
Tribe at the time of signing this agreement. 2.4 InterBet agrees that, upon
approval of the contract between InterBet and the Tribe, the first Fifty
Thousand Dollars ($50,000.00) received from the conduct of the Bingo-for-cash
game on the World Wide Web shall be paid to the Tribe, without regard to the
distributioformula of paragraph 2.1 herein.
<PAGE>
-Article Three-
Approval
3.1 Tribe agrees to promptly submit this agreement for approval of any agency or
regulatory body which might be required by Big Lagoon Rancheria Constitution or
the IGRA, or the National Indian Gaming Commission.
-Article Four-
TERM
4.1 This Agreement shall commence on the date first written above and shall
continue for the period of five years, unless earlier terminated as follows:
4.2 Either party may terminate this Agreement in the event of a breach by the
other party orany of its obligations contained herein if such breach continues
uncured for a period of ten (10) days after written notice of such breach to the
other party.
4.3 Either party may terminate this Agreement upon written notice to the other
party if termination is required by action of any Indian, federal or state
regulating body, court , or agency.
-Article Five-
SEVERABILITY
5.1 If any provision of this Agreement shall be held to be illegal or
unenforceable, such provision shall be severed from this Agreement and the
remainder thereof shall remain in full force and effect.
-Article Six-
ENTIRE AGREEMENT
6.1 This Agreement constitutes the entire Agreement of the parties, and
supersedes all previous understandings between the parties with respect to the
subject matter hereof. There are no oral representations.
BIG LAGOON RANCHERIA INTERBET, INC.
By: /s/Virgil Moorehead By: /s/Samuel Rosenthal
Virgil Moorehead, Chairperson Samuel Rosenthal, Chairman
Big Lagoon Rancheria InterBet, Inc.
<PAGE>
Exhibit 10.2
Mr. Mark Popp
Interbet Inc.
655 Montgomery St.
1st Floor
San Francisco
California 94111
USA
July 31, 1997
Mr. Popp:
Re: Approval of Application-Interbet Inc.
Kindly be advised that your application on behalf of Interbet Inc. for a licence
(sic) from the Free Trade and Processing Zone to operate an off-shore internet
casino gaming operation has been approved in principle subject to the receipt of
all required documentation and completion of due diligence. Please note that due
diligence is a continuous process conducted for the duration of the period
specified by the licence (sic).
Sincerely,
/s/Vere Murphy
Mr. Vere Murphy
Commissioner
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule comtains summary financial information extracted from the
unaudited financial statements of Interbet, Inc. for June 30, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000894562
<NAME> Interbet, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollar
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 60,156
<SECURITIES> 0
<RECEIVABLES> 120,900
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 181,056
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 356,056
<CURRENT-LIABILITIES> 175,000
<BONDS> 0
0
0
<COMMON> 423,312
<OTHER-SE> (382,256)
<TOTAL-LIABILITY-AND-EQUITY> 356,256
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 382,256
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (382,256)
<INCOME-TAX> 0
<INCOME-CONTINUING> (382,256)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (382,256)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
