10QSB 1 utdt.txt 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 ------ ---------- (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 -------------------------------------------------- (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. 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.
UNITED TRADING.COM (Formerly United Casino Corporation) (A Development Stage Enterprise) CONSOLIDATED BALANCE SHEET September 30, 2000 (Unaudited) ASSETS ------ Sept. 30, 2000 --------------- 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 ------------- 1,272,744 ------------- 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
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 -------------- -------------- -------------- 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) ---------- ---------- ---------- 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
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 -------------- -------------- REVENUES Sales $ 1,400,000 $ Interest Income ---------- ---------- Total Revenues 1,400,000 0 EXPENSES General and Administrative 50,487 8,005 Depreciation and Amortization 28,399 0 ---------- ---------- Total Expenses 78,886 8,005 Loss on Sale of NetBet Stock (65,993) ---------- ---------- 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
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 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
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 ------------------------------------------------------------------------------ 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. 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. 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