SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 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 No. 33-55254-43
INTERBET, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 87-0485308
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
SUITE 110, 1777 BOTELHO DRIVE
WALNUT CREEK, CALIFORNIA 94596
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (925) 296-2424
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
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At April 30, 1998, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $1,250,000.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of April 30, 1998
$.001 PAR VALUE CLASS A COMMON STOCK 5,893,000 SHARES
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
ITEM 1. Business.
The Company was incorporated under the laws of Nevada on August 9,
1990. On June 6, 1997, the Company merged with Interbet, Inc., also a Nevada
corporation, ("Original Interbet") and changed its name to Interbet, Inc. The
Company is in the developmental stage. Prior to the merger, operations were
limited to the sale of shares to Capital General Corporation, the gifts of
shares to certain donees, investigating potential business ventures which, in
the opinion of the Company's then management, would provide a source of eventual
value to the Company and marketing, promoting and developing products comprised
of substances derived from naturally occurring organic and inorganic sources,
such as, but not limited to, melaleuca oil, surfactants and grape and grapefruit
seed extract for use in industrial, commercial and consumer applications. Due to
the limited financial resources, the Company terminated the marketing business
and refocused on investigating potential business ventures for possible
acquisition. On August 15, 1996, the Company, in consideration of the issuance
of 100,000 authorized but unissued shares, acquired $50,000.00 from Capital
General Corporation for $.50 per share. The price of the shares was arbitrarily
decided and agreed to by both parties. After completion of the stock purchase,
Capital General Corporation became the holder of approximately 92.8% of the
issued and outstanding shares of the Company. Prior to the merger with Original
Interbet, the directors and officers of both the Company and Capital General
Corporation were the same persons.
Following the merger with Original Interbet, the Company continued the
business of the acquired company, which is engaged in the development by
independent contractors of computer software designed to pay Class II games of
chance, such as bingo, for money prizes on the Internet and in efforts to
contract with an American Indian Tribe to establish and manage a web site for
playing these games of chance on the World Wide Web. The Company has a contract
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with Random Games, Inc. of Morrisville, North Carolina for development of the
software and additional software required to track the billing, prize payments
and accounting information needed to effectively operate such games on the
Internet. The gaming software is now completely developed, but additional
software required for record keeping and accounting functions has not been
completed. The Company has established a web site at www.interbet.com to beta
test the games and at which the Company's games can be played without charge and
without prizes. Because the background of certain individuals who provide
consulting services to the Company regarding its management and operations
involve prior criminal convictions, the Company has suspended its efforts to
contract with any native American Indian Tribe until these persons are no longer
affiliates of the Company. The Company plans to make an acquisition which would
result in management of the acquired enterprise taking over the management of
the Company and those persons with prior criminal convictions ceasing to be
affiliates of the Company. The Company intends to acquire an enterprise which
will have an interest in pursuing the Company's planned business in Internet
gaming. There is no assurance as to when or if the Company may locate a suitable
acquisition target; however, the Company and its consultants are actively
seeking a merger target. There is no assurance exactly how a new management will
decide to conduct the Company's business in combination with the business of the
acquired company from which the new management would come.
ITEM 2. Properties.
The Company does not own or lease any property. The Company uses one office
within the offices of Diablo Associates, Inc., which along with its principals
provide consulting and management services to the Company, on a month to month
basis. See, "Management".
ITEM 3. Legal Proceedings.
Original Interbet was founded in 1996 upon the advice and
recommendation of Diablo Associates, Inc., a Nevada corporation. The management
of Diablo Associates, Inc. is composed of Burton Vishno and it employs Stanley
T. Deck, Sr., Edward Durant and Walter Zink as consultants. Diablo Associates,
Inc. and Messrs. Deck, Durant and Zink were employed by Original Interbet are
employed by the Registrant as consultants. The Original Interbet's operations
were funded, in part, with part of the proceeds from the sale of convertible
debentures by the "Silicon Valley IPO Network", an association sponsored by
Diablo Associates, Inc. and others. The Silicon Valley IPO Network sold
convertible debentures to fund the operations of ten companies, including the
Registrant. The convertible debentures were sold without federal or state
securities registration in reliance upon exemptions from the respective
registration requirements. The convertible debentures were convertible in part
into common stock of the Registrant and in part into common stock of the other
nine companies whose operations were funded with debenture proceeds. As a result
of the Registrant's participation in funding provided by the convertible
debentures issued by Silicon Valley IPO Network, the Registrant has been named,
together with the Silicon Valley IPO Network, Diablo Associates, Inc., the nine
other participants in the funding provided by the convertible debentures and
others as a subject of a formal investigation being conducted by the U.S.
Securities and Exchange Commission for the purpose of determining whether the
Registrant or any other persons have violated provisions of the federal
securities laws.
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ITEM 4. Submission of Matters to a Vote of Security Holders.
On June 6, 1997, the Company's majority stockholder, which at that time
was Original Interbet, approved the merger of Original Interbet into the
Registrant. On September 17, 1997, a majority of the Company's stockholders
purported to elect the Company's current directors, pursuant to a proxy vote.
The Company later determined that the proxies were possibly invalid and that
earlier elections of the Company's directors, beginning with the initial
organization of Original Interbet had been invalid. Accordingly, the purported
election by the stockholders has been deemed to be invalid and of no effect.
Subsequently, the original director designated in the Articles of Incorporation
of Original Interbet elected the Company's current directors to cure defects in
the prior elections of directors of Original Interbet and of the Company's
directors beginning with the merger of Original Interbet into the Company.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters.
The Company's common stock trades under the stock symbol "EBET" on the
OTC Bulletin Board operated by the National Association of Securities Dealers,
Inc. The Company has been informed that one registered securities broker is
making a market in the Company's common stock at April 30, 1998. None of the
entities or representatives, and none of the individuals known by the Company's
officers to be associated persons with any such broker, has an affiliation,
direct or indirect, with the Company. The approximate high and low bid prices
for the Company's Common Stock for the quarter ended June 30, 1997 were $6 and
$6, respectively, for the quarter ended September 30, 1997 were $6.5 and $.25,
respectively, for the quarter ended December 31, 1997 were $2.62 and $.25,
respectively, and for the quarter ended March 31, 1998 were $.875 and $.4375,
respectively. These bid prices are inter-dealer prices without retail markup,
mark-down or commission, and may not represent actual transactions. Prior to the
quarter ended June 30, 1997 there were no bid prices quoted for the Company's
common stock
At April 30, 1998, there were approximately 675 record holders of the
Company's common stock. The Company has not declared or paid any dividends on
its common stock and does not anticipate declaring any dividends in the
foreseeable future.
ITEM 6. Selected Financial Data.
Selected financial data will be provided by amendment upon receipt of the
Company's December 31, 1997 audit. See "Financial Statements".
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
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This information will be provided by amendment upon receipt of the
Company's December 31, 1997 audit. See "Financial Statements".
ITEM 8. Financial Statements and Supplementary Data.
See Item 14.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
Stanley T. Deck, Jr., age 33, is a director and the president of the
Company. Mr. Deck was initially elected in 1996 as one of the directors and
officers of the Company at the Company's purported organization by the original
director designated in the Company's Articles of Incorporation. Soon after the
date of the merger of Original Interbet into the Company, Mr. Deck was replaced
by others as a director and officer of the Company. In September 1997, such
other persons were purported to be removed as directors by stockholder action
pursuant to proxies and Mr. Deck was purported to be reelected to his present
positions with the Company. See, Item 4. Mr. Deck's background is in management
and operations in electronic media. He has been employed in the position of
Director of Operations, News Director, Promotions Manager, and Engineer with
CBS, ABC and NBC television affiliates and Telecommunications, Inc.'s
international broadcast facility. Mr. Deck was primarily during the periods of
June to September 1997 and continues on a part time basis to be involved in
field operations of Overtime Parking, Inc., a company which issues citations to
nonpaying motorists on commercial parking lots. Overtime Parking, Inc. is a
participant in Silicon Valley IPO Network. Most recent five year employment
history to be provided by amendment.
Michael S. Vishno, age 36, is a director and the chief financial officer of
the Company. . Mr. Vishno was initially elected in 1996 as one of the directors
and officers of the Company at the Company's purported organization by the
original director designated in the Company's Articles of Incorporation. Soon
after the date of the merger of Original Interbet into the Company, Mr. Vishno
was replaced by others as a director and officer of the Company. In September
1997, such other persons were purported to be removed as directors by
stockholder action pursuant to proxies and Mr. Vishno was purported to be
reelected to his present positions with the Company. See, Item 4. Mr. Vishno,
has had fifteen years of business experience in management and operations,
including captain of a small fishing vessel and bar and restaurant management.
Mr. Vishno was primarily during the period of June to September 1997 and
continues on a part time basis to be involved in field operations of Overtime
Parking, Inc., a company which issues citations to nonpaying motorists on
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commercial parking lots. Overtime Parking, Inc. is a participant in Silicon
Valley IPO Network. Most recent five year employment history to be provided by
amendment.
The directors of the Company are elected annually by a vote of the
holders of a majority of the outstanding common stock; however, the current
directors have been elected by the original director and an annual stockholder
vote on the incumbent directors not having been taken. The directors and
officers, as well as the Company in general, are significantly dependent upon
the advice and management services of Diablo Associates, Inc. The directors have
approved a general management and consulting arrangement with Diablo Associates,
Inc. as well as separate consulting agreements with certain consultants to
Diablo Associates, Inc. Diablo Associates is deemed to be an affiliate and
controlling person of the Registrant, as those terms are defined for purposes of
the federal securities laws. Mr. Deck is the son of one of the consultants to
Diablo Associates, Inc. and to the Company and Mr. Vishno is the son of the
principal of Diablo Associates, Inc.
Information about consultants to and the principal of Diablo
Associates, Inc. and to the Company is as follows: In 1983 Edward Durante, who
provides general management services, planning, direction and product
development for the Company was barred for an indeterminate period by the
National Association of Securities Dealers, Inc. from association with members
of the Association, in 1975 Mr. Durante was convicted of grand larceny; and of
violation of Section 487.1 of the California Penal Code for forgery in 1990. In
July 1997, a complaint was filed against Mr. Durant in connection with a program
to sell vending machines, he is the subject of a cease and desist order alleging
vending machine fraud and he is the subject to a ten year consent decree barring
him from selling business opportunities. Burton Vishno, the principal of Diablo
Associates, Inc., who provides general management services, planning, direction,
product development, recruitment and public relations services, was convicted of
wire fraud in 1983 and in 1987 and signed a consent decree in an action brought
by the U.S. Securities and Exchange Commission permanently barring him from the
securities industry as a result of alleged dissemination of false and misleading
information. In July 1997, a complaint was filed against Walter Zink, who
provides accounting and financial consulting services to the Company, in
connection with a program to sell vending machines and he is the subject to a
ten year consent decree barring him from selling business opportunities. Stanley
Deck, Sr. who provides public relations and management consulting services to
the company is the subject of disciplinary action by the NASD. The information
about Messrs. Durante, Vishno, Zink and Deck has been provided by them. The
Registrant has not otherwise verified the accuracy or completeness of the
information.
ITEM 11. Executive Compensation.
Stanley T. Deck, Jr., received a salary of $2,600 per month in his capacity
of president of the Company beginning mid September 1997. Mark A. Popp received
average compensation of $692.86 per month in his capacity of president of the
Company from June to mid September 1997. Prior to the merger of Original
Interbet into the Company, the Company's president did not receive any
compensation.
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ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The names of directors and officers and the name of each person who
owns legally and beneficially more than five percent of the Company's issued and
outstanding Common Stock, the address of each such person, the number of shares
which each owns and the percentage of the Common Stock represented by such
shares, is set forth in the following table.
Name Number of Shares
Stanley T. Deck, Jr.(1) (2)
Michael S. Vishno(1) (2)
Messrs. Deck and Vishno's address is the address of the Company
Less than one percent.
ITEM 13. Certain Relationships and Related Transactions.
The Company has consulting agreements with Diablo Associates, Inc. whose
principal is Burton Vishno, Michael Vishno's father and Stanley T. Deck, Sr.,
Stanley T. Deck, Jr.'s father. These consulting agreements provide for no
compensation. Management believes the compensation to these consultants is
reasonable for the services provided.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Exhibits
22 Development agreement with Random Games, Inc.
23 Consent of independent auditor
Financial Statements - December 31, 1997.
Financial statements required by this annual report on Form 10-K will
be filed by amendment as soon as the audit thereof is completed by the Company's
independent auditor, who has not been engaged at the date of this report. The
Company believed that it had engaged the accountant who had audited the
financial statements of Original Interbet and did not realize until late April
1998 that the Company's failure either to receive an engagement letter or
receive the completed audit for 1997 was an indication of the accountant not
desiring to be engaged for the 1997 audit. Subsequently, the Company has
approached the accountant who audited the Company's 1996 financial statements
prior to its merger in June 1997. At the date of this report, that accountant
has not decided whether it will agree to be engaged for the 1997 audit. The
Company is hopeful that it can obtain a 1997 audit in the near future, but there
is no assurance that this will be achieved.
Reports on Form 8-K.
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The Company filed the following reports on Form 8-K during the quarter
ended December 31, 1997:
Date of Report (Date of earliest event reported) December 3, 1997 (September 17,
1997)
Date of Amendment No. 1 to the forgoing report on Form 8-K January 16, 1998
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By: /s/ Stanley T. Deck, Jr.
Stanley T. Deck, Jr., President and Chief Executive Officer
By: /s/ Michael Vishno
Michael S. Vishno, Chief Financial and Accounting Officer
Date: May 8, 1998
Exhibit 22. Development agreement with Random Games, Inc.
AGREEMENT
This agreement is made at Walnut Creek, California on November 25,
1997, by Interbet, Inc., hereafter "Interbet", and Random Games Corporation,
hereafter "Random", with addresses as they appear below.
RECITALS
Random has the technology and necessary personnel to create a database
commonly known as "back end" to provide a billing system for games, maintain
records for each customer's playing history, and keep track of each ticket
played .
Interbet wishes to have created a back end database for use in a suite
of class II and class III games.
- -ARTICLE ONE-
DESCRIPTION
1.1 Random agrees to create a back end which will maintain records for each
customer showing their personal information, their financial history, and their
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ticket playing history, and which will also keep track of each ticket played,
who purchased the ticket and when, the actions performed, and the final state of
the ticket. The database will include the ability to search by ticket number or
customer ID, and will give a concise and easily readable report. The billing
system will integrate CyberCash's credit card billing ability into the database
to keep track of all customer account information, debit and credit customer
credit cards, and maintain a clear audit trail.
- -ARTICLE TWO-
PRICE
2.1 Interbet agrees to pay Random One Hundred Twenty Thousand Dollars
($120,000) for the creation of the back end database which is estimated to
require thirteen weeks. Payment to Random shall be as follows:
A. Forty Thousand Dollars ($40,000) when work commences,
on or about December 10, 1997.
B. Thirty Thousand Dollars ($30,000) six weeks after the
commencement of work on the project.
C. Thirty Thousand Dollars ($30,000) at the time the back
end is connected to the Interbet game(s).
D. Twenty Thousand Dollars ($20,000) thirty days after
connection of the back end to the Interbet game(s).
- -ARTICLE THREE-
DISTRIBUTION
3.1 Distribution and marketing of the back end database and the various
games combined with the database shall be the exclusive responsibility of
Interbet, at the expense of Interbet only. Random shall receive two and one half
percent (2 1/2 %) of the net revenues received by Interbet from the sale or
lease of such database and/or games.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date first written above.
RANDOM GAMES, INC. INTERBET, INC.
By, /s/Randal Masteller By, /s/S.T. Deck, Jr.
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