U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: September 30, 2000
Commission File Number: 0-29987
UNITED TRADING.COM
(Exact name of small business issuer as specified in its charter)
Nevada 88-0106514
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
19762 MacArthur Blvd., # 300
Irvine, California
(Address of principal executive offices)
92612
(Zip Code)
(403) 271-0669
(Issuer's Telephone Number)
440-10816 Macleod Trail South, # 201
Calgary, Alberta Canada
T2J 5N8
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(Former name, former address and former fiscal year,
if changed last report)
Check whether the issuer (1) filed all reports required to be filed by
Section13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days:
Yes [X] No [ ].
--- ---
The number of shares of the registrant's only class of common stock issued and
outstanding, as of September 30, 2000, was 12,999,368 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three month and nine month periods
ended September 30, 2000, are attached hereto.
<PAGE>
<TABLE>
<CAPTION>
UNITED TRADING.COM
(Formerly United Casino Corporation)
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEET
September 30, 2000
(Unaudited)
ASSETS
------
Sept. 30, 2000
---------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 57,543
Current portion of Notes Receivable (Note 2) 510,000
Other Receivables 2,819
-------------
Total Current Assets 570,362
PROPERTY AND EQUIPMENT
Fixed Assets (Net of depreciation of
$3,923) 14,898
-------------
Total Property and Equipment 14,898
OTHER ASSETS
Notes Receivable 700,000
Software for Licensing (net of
Amortization of $27,473) (Note 2) 557,744
Premium Java Site Development Costs 15,000
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1,272,744
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Total Assets $ 1,858,004
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ 0
Income Taxes Payable 202,800
-------------
Total current Liabilities 202,800
OTHER LIABILITIES
Deposits against Software Licenses 18,000
Deferred Income Taxes (Note 4) 154,200
-------------
172,200
STOCKHOLDERS' EQUITY
Common Stock (50,000,000 shares authorized
and 12,999,368 issued and outstanding)
(see Note 3) 12,999
Additional Paid-in Capital 1,005,480
Retained Deficit - accumulated during
Development Stage 464,525
-------------
Total Stockholders' Equity 1,483,004
------------
Total Liabilities and
Stockholders' Equity $ 1,858,004
===========
See Accompanying Notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNITED TRADING.COM
(Formerly United Casino Corporation)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the For the For the Period
Nine Months Nine Months Inception thru
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000
<S> <C> <C> <C>
-------------- -------------- --------------
REVENUES
Consulting Fees $ $ $ 544,894
Sales 1,400,000 1,400,000
Interest Income 3,764
---------- ---------- ----------
Total Revenues 1,400,000 0 1,948,658
EXPENSES
General and Administrative 89,470 15,336 713,752
Allowance for Uncollectable Debt 0 0 160,937
Depreciation and Amortization 30,373 0 67,916
---------- ---------- ----------
Total Expenses 119,843 15,336 942,605
Income (Loss) from activities of
NetBet, Inc. 0 0 (118,250)
Loss on sale of NetBet Stock 0 (65,993) (66,278)
---------- ---------- ----------
Net Pre-Tax Income (Loss) 1,280,157 (81,329) 821,525
Net Pre-Tax Income (loss) per
Common Share, basic and diluted $ 0.118 ($0.178) $ 0.477
=========== ============ ==========
Income Taxes (Note 4) ($357,000) 0 ($357,000)
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Net Income (Loss) After Taxes $ 923,157 ($81,329) $ 464,525
=========== ============ ==========
Net Income (loss) per
Common Share, basic and diluted $ 0.085 ($0.178) $ 0.270
=========== ============ ==========
Weighted Average number of Common
Shares outstanding, basic and diluted
adjusted for 1/50 reverse split in 1999 10,838,019 455,889 1,722,278
=========== =========== ===========
See Accompanying Notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNITED CASINO CORPORATION
(Formerly United Casino Corporation)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the For the
Three Months Three Months
Sept. 30, 2000 Sept. 30, 1999
<S> <C> <C>
-------------- --------------
REVENUES
Sales $ 1,400,000 $
Interest Income
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Total Revenues 1,400,000 0
EXPENSES
General and Administrative 50,487 8,005
Depreciation and Amortization 28,399 0
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Total Expenses 78,886 8,005
Loss on Sale of NetBet Stock (65,993)
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Net Pre-Tax Income (Loss) 1,321,114 (73,998)
Net Pre-Tax Income (loss) per
Common Share, basic and diluted $ 0.102 ($0.074)
=========== ============
Income Taxes (Note 4) (357,000) 0
---------- ----------
Net Income (Loss) $ 964,114 ($73,998)
=========== ============
Net Income (loss) per
Common Share, basic and diluted $ 0.074 ($0.074)
=========== ============
Weighted Average number of Common
Shares outstanding, basic and diluted
adjusted for 1/50 reverse split in 1999 12,999,368 997,066
=========== ===========
See Accompanying Notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNITED CASINO CORPORATION
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For the For The For the Period
Nine Months Nine Months Inception thru
<S> <C> <C> <C>
Sept. 30, 2000 Sept. 30, 2000 Sept. 30, 2000
-------------- -------------- --------------
OPERATING ACTIVITIES
----------------------------------
Net Income (Loss) $ 923,157 ($7,331) $ 464,525
Adjustments to reconcile Net Loss to Cash
provided (used) by operating activities:
Depreciation and Amortization 30,372 0 44,370
Changes in operating assets and liabilities:
Decrease (increase) in Deferred
Offering Costs 15,550 0 0
Increase (decrease) in Accounts Payable (27,583) 0 0
Increase (decrease) in Income Taxes Payable 202,800 202,800
(Increase) decrease in Receivable from
Software License Sales (1,210,000) (1,210,000)
(Increase) decrease in other receivables (2,819) (2,819)
(Increase) decrease in Advances 1,411
(Increase) decrease in Deposits 18,000 0 18,000
Increase (decrease) in Deferred Taxes 154,200 154,200
---------- ---------- ----------
Net cash provided by Operating Activities 103,677 (5,920) (328,924)
INVESTMENT ACTIVAITIES
--------------------------------------
Decrease (increase) in Property and
Equipment (2,411) 0 (36,318)
Decrease (increase) in Software for
License (462,631) (34,500) (585,218)
Decrease (increase) in Premium
Java Site Development (15,000) (15,000)
Decrease (increase) in Organization Costs (1,190)
---------- ---------- ----------
Net cash (used) by Investment activities (480,042) (34,500) (637,726)
FINANCING ACTIVITIES
---------------------------------
Disposal of Computer Equip 5,714 5,714
Increase (decrease) in Common Stock 430,450 34,500 1,018,479
---------- ---------- ----------
Net cash provided by Financing Activities 430,450 40,214 1,024,193
---------- ---------- ----------
Increase (decrease) in Cash 54,085 (206) 57,543
Cash at Beginning of Period 3,458 291 0
---------- ---------- ----------
Cash at End of Period $ 57,543 $ 85 $ 57,543
========== ========== ==========
See Accompany Notes
<PAGE>
</TABLE>
UNITED TRADING.COM
(Formerly United Casino Corporation
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000
1. ORGANIZATION
-------------------------
The Shareholders of United Trading.Com (Formerly United Casino Corporation
- hereinafter referred to as "the Company") on July 17, 2000 approved the name
change to United Trading.Com. The Company has since pursued the development of
software for Internet activities and the development of its e-commerce products
and related Internet sites.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The accompanying consolidated financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position at September 30, 2000, and results of operations and cash
flows for the periods ended September 30, 2000 and 1999, have been made.
Certain information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1999 audited
consolidated financial statements. The results for operations for periods ended
September 30, 2000 and 1999 are not necessarily indicative of the operating
results for the full years.
a. Investments
Investments are carried at cost except, where in the opinion of management,
there has been a loss in value other than a temporary decline in which case the
carrying value is reduced to its estimated value.
b. Notes Receivable
Notes Receivable consist of amounts due the Company from purchasers of licenses
for the Company's Casino and Sports-book Software. Amounts are net of initial
deposits for eight software packages and the first quarterly payments for two of
the software packages which were paid prior to the due date. There were no
delinquent receivables as of October 16, 2000.
c. Software for Licensing
Expenditures incurred for the acquisition of and development of computer
software for licensing to third parties has been capitalized and will be
amortized over a 5 year period from July 12, 2000 following the first licensing
of the software, which was effective July 11, 2000.
d. Income Taxes
The Company utilizes the asset and liability method of accounting for income
taxes as set forth in FASB Statement No. 109, "Accounting for Income Taxes."
Under the asset and liability method, deferred taxes are determined based on the
difference between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse.
3. COMMON STOCK
-----------------------------
The Company effected a reverse split of its common stock $0.001 par value
on November 2, 1999 on the basis of one share of common stock $0.001 par value
for each 50 shares outstanding prior to the split. The authorized
capitalization of the Company remained unchanged, with 50,000,000 (par value
$0.001) common shares and 20,000,000 (par value $0.001) preferred shares
authorized. At September 30, 2000, there were 12,999,368 common shares and no
preferred shares outstanding. On October 10, 2000, the Company effective a
forward stock split of its common stock $0.001 par value on the basis of three
shares of common stock par value $0.001 for each share outstanding prior to the
split. On October 10, 2000, there were 38,998,104 shares outstanding. The
authorized capitalization of the Company remained unchanged with 50,000,000 (par
value $0.001) common shares and 20,000,000 (par value $0.001) preferred shares
authorized.
4. PROVISION FOR INCOME TAXES
------------------------------------------------
The Company generated $1,321,144 in pre-tax income in the nine months ended
September 30, 2000. In calculation of the taxable income for the same period,
the Company utilized a tax-loss carry forward of approximately $230,000 and for
tax purposed expensed the development costs of its software incurred in the
current year. (Such expenditures were capitalized and will be amortized over a
five year period -see also note 2.) Expenditures incurred in prior years was
capitalized for both book and tax purposed and will be amortized over a five
year period for both book and tax purposes. The future tax on the difference
between amounts capitalized for book versus tax is treated a deferred Income
taxes.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and notes thereto included herein.
The Company made its first sales of four non-exclusive license agreements
for the use of its Internet casino games and four sales of non-exclusive license
agreements for Internet sports-book software during the quarter ended September
30, 2000. These sales were made to Malt Limited, a Cook Island corporation and
Recantoasol, S.A., a Costa Rican corporation. These companies each purchased
two licenses of both the Casino games and the Sports-book for their Internet
sites located in Costa Rica (greatbet.com and travel2casino.com) and the Cook
Islands (bettorsisland.com and travelerscasino.com). No sales of the Company's
software packages were made in any previous quarter.
The costs of creating the Company's software packages was primarily
incurred over the past 18 months. Such expenditures were capitalized and will
be amortized over a five year period beginning in July, 2000 (the date of the
first license sale). As additional expenditures are made to update and modify
the software, such expenditures will also be capitalized and amortized over the
5 year period beginning in the quarter in which the expenditures were made. As
of September 30, 2000, $585,217 had been expended for software development and
$27,473 had been amortized.
The Company plans to continue marketing its Internet Casino and Spots-book
software packages as well as marketing of its products for e-commerce sales. It
will also continue to revise, expand and update its existing software packages
in addition to the introduction of new software for Internet Lottery games. It
is anticipated that the continued revenues from sales of software licenses to
date combined with projected future sales will provide an adequate cash flow
base from which to satisfy all of the Company's cash requirements during the
next twelve months. The Company believes that revenue from sales of its
e-commerce products will also contribute to its cash flow requirements.
Forward Looking Statements
In connection with, and because it desires to take advantage of, the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, the
Company cautions readers regarding certain forward looking statements in the
following discussion and elsewhere in this report and in any other statement
made by, or on the behalf of the Company, whether or not in future filings with
the Securities and Exchange Commission. Forward looking statements are
statements not based on historical information and which relate to future
operations, strategies, financial results or other developments. Forward
looking statements are necessarily based upon estimates and assumptions that are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the Company's control
and many of which, with respect to future business decisions, are subject to
change. These uncertainties and contingencies can affect actual results and
could cause actual results to differ materially from those expressed in any
forward looking statements made by, or on behalf of, the Company. The Company
disclaims any obligation to update forward looking statements.
Plan of Operation
The Company plans to continue development of its software applicable to niche
e-commerce Internet applications for licensing and to intensify its marketing
efforts for already developed software and its e-commerce products during the
next 12-month period.
The Company does not plan to hire any new full time employees during the next 12
months. All additional work is planned to be performed by outside consultants
who are currently available to the Registrant.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES
a) NONE
b) NONE
c) There were no sales of securities made by the
Company during the quarter ended September 30, 2000.
d) None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES: - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: - none
ITEM 5. OTHER INFORMATION -
The Board of Directors of the Company approved a forward three-for-one
split of the Company's common par value $0.001 common stock effective October
10, 2000. The common stock will be traded under the trading symbol OTCBB:"UTDT"
on that date.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K: - NONE
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.
UNITED TRADING.COM
Date: October 16, 2000 By:/S/IAN ANDERSON
----------------
IAN ANDERSON, CORP. SECRETARY
<PAGE>
