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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
| þ | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | |
| | For the quarterly period ended:June 30, 2004 |
| | |
| o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | |
| | For the transition period from __________ to __________ |
(Exact name of registrant as specified in its charter)
| Texas | | 0-30381 | | 760495640 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (IRS Employer Identification No.) |
Suite 212, 1166 Alberni Street Vancouver, British Columbia, Canada | | V6E 3Z3 |
(Address of principal executive offices) | | (Zip Code) |
Issuer’s telephone number (including area code) | | (604) 648-2090 |
| | | |
(Former name, former address and former fiscal year, if changed since last report) | | (Zip Code) |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the 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.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.47,520,650 COMMON SHARES AS AT AUGUST 5, 2004.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(Check one)
649.COM INC.
(A Development Stage Company)
FORM 10-QSB
PART 1 - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
| Consolidated Balance Sheets | F-2 |
| | |
| Consolidated Statement of Operations | F-3 |
| | |
| Consolidated Statement of Cash Flow | F-4 |
| | |
| Notes to Consolidated Financial Statements | F-5 |
649.com, Inc. (A Development Stage Company) Consolidated Balance Sheets (U.S. Dollars) |
| | | June 30, | December 31, |
| | | 2004 | 2003 |
| | | (Unaudited) | (Audited) |
| | $ | $ |
| | | | |
| ASSETS | | | |
| | | | |
| Current Assets | | | |
| | | | |
| Cash | | | 158 | | | 81 | |
| Prepaid | | | - | | | 19 | |
| | | | | | | | |
| Total Assets | 158 | | | 100 | |
| | | | | | | | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | |
| | | | | | | | |
| Current Liabilities | | | | | | | |
| | | | | | | | |
| Accounts payable (Note 3) | | | 202,755 | | | 184,224 | |
| Accrued liabilities | | | 850 | | | 2,000 | |
| Due to a related party (Note 4) | | | 8,242 | | | 8,242 | |
| Due to non-related parties (Note 5) | | | 425,992 | | | 421,414 | |
| | | | | | | | |
| Total Current Liabilities | | | 637,839 | | | 615,880 | |
| | | | | | | | |
| Stockholders’ Deficit | | | | | | | |
| | | | | | | | |
| Common Stock: 100,000,000 common shares authorized with a par value of $0.001; 47,520,650, issued and outstanding respectively | | | 47,521 | | | 47,521 | |
| Preferred stock, 5,000,000 shares authorized with a par value of $0.001 | | | - | | | - | |
| | | | | | | | |
| Additional paid-in capital | | | 1,530,557 | | | 1,530,557 | |
| | | | | | | | |
| Donated capital (Notes 3, 4 and 5) | | | 448,601 | | | 416,167 | |
| | | | | | | | |
| Deficit Accumulated During the Development Stage | | (2,664,360 | ) | | (2,610,025 | ) |
| | | | | | | | |
| Total Stockholders’ Deficit | (637,681 | ) | | (615,780 | ) |
| | | | | | | | |
| Total Liabilities and Stockholders’ Deficit | 158 | | | 100 | |
| 649.com, Inc. (A Development Stage Company) Consolidated Statements of Operations (U.S. Dollars) (Unaudited) |
| | | | | | | Accumulated from |
| | | | | | | June 13, 1990 |
| | | Three Months Ended | Six Months Ended | (Date of Inception) |
| | | June 30 | June 30 | to June 30, |
| | | 2004 | 2003 | 2004 | 2003 | 2004 |
| | | | $$ | | $$ | $ |
| | | | | | | |
| Revenue | | | - | | | - | | | - | | | - | | | 45,500 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Accounts payable written-off | | | - | | | - | | | - | | | - | | | (83,512 | ) |
| Consulting fees | | | - | | | 30,000 | | | - | | | 60,000 | | | 140,000 | |
| Depreciation and amortization | | | - | | | - | | | - | | | - | | | 4,111 | |
| Equipment and software written-off | | | - | | | - | | | - | | | - | | | 54,188 | |
| General and administrative | | | 11,057 | | | 12,358 | | | 21,901 | | | 23,893 | | | 601,000 | |
| Imputed interest | | | 16,261 | | | 16,330 | | | 32,434 | | | 32,523 | | | 313,601 | |
| Internet and web hosting fees | | | - | | | 15,000 | | | - | | | 30,000 | | | 85,000 | |
| Prepaid expenses written-off | | | - | | | - | | | - | | | - | | | 36,000 | |
| Research and development | | | - | | | - | | | - | | | - | | | 124,650 | |
| Stock-based compensation | | | - | | | - | | | - | | | - | | | 1,434,822 | |
| | | | | | | | | | | | | | | | | |
| Total Expenses | | | 27,318 | | | 73,688 | | | 54,335 | | | 146,416 | | | 2,709,860 | |
| | | | | | | | | | | | | | | | | |
| Net Loss for the Period | | | (27,318 | ) | | (73,688 | ) | | (54,335 | ) | | (146,416 | ) | | (2,664,360 | ) |
| | | | | | | | | | | | | | | | | |
| Basic and diluted loss per share | | | - | | | - | | | - | | | - | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding | | | 47,520,650 | | | 47,520,650 | | | 47,520,650 | | | 47,520,650 | | | | |
649.com, Inc. (A Development Stage Company) Consolidated Statements of Cash Flows Six Months Ended June 30 (U.S. Dollars) (Unaudited) |
| | | 2004 | 2003 |
| | | | $$ |
| | | | |
| Cash Flows To Operating Activities | | | | | | | |
| | | | | | | | |
| Net Loss for the period | | | (54,335 | ) | | (146,416 | ) |
| | | | | | | | |
| Adjustments to reconcile net loss to cash | | | | | | | |
| | | | | | | | |
| Imputed interest | | | 32,434 | | | 32,523 | |
| | | | | | | | |
| Changes in non-cash working capital items | | | | | | | |
| | | | | | | | |
| Increase in prepaid expenses and other current assets | | | 19 | | | - | |
| Increase in accounts payable and accrued liabilities | | | 17,381 | | | 105,656 | |
| | | | | | | | |
| Net Cash Used In Operating Activities | | | (4,501 | ) | | (8,237 | ) |
| | | | | | | | |
| Cash Flows From Financing Activities | | | | | | | |
| | | | | | | | |
| Advances from a non-related party | | | 4,578 | | | 6,351 | |
| | | | | | | | |
| Net Cash Provided By Financing Activities | | | 4,578 | | | 6,351 | |
| | | | | | | | |
| Increase (Decrease) in Cash | | | 77 | | | (1,886 | ) |
| | | | | | | | |
| Cash - Beginning of Period | | | 81 | | | 2,452 | |
| | | | | | | | |
| Cash - End of Period | | | 158 | | | 566 | |
649.com, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements (expressed in U.S. dollars) (Unaudited) |
1. Nature of Operations and Continuance of Business
649.com, Inc. (formerly, Market Formulation and Research Corp.) (a Development Stage Company) (the "Company") was originally incorporated under the laws of the State of Nevada on June 13, 1990 as MMM-Hunter Associates, Inc. The Company was re-incorporated in Texas on March 1, 1996 under the name Market Formulation and Research Corp., for the purpose of providing market formulation and research services. On May 12, 1999, the Company amended its articles of incorporation, changed the name of the Company to 649.com, Inc., and effected a 5-for-1 forward stock split.
On September 15, 1999, the Company entered into a Plan of Reorganization and Acquisition (the "Acquisition Agreement") with 649.com, Inc., a private company based in Alberta, Canada ("649"). Under the terms of the Acquisition Agreement, the Company was required to issue 6,500,000 shares of its common stock and $100,000 cash to the sole stockholder of 649, Bay Cove Investments Limited, in exchange for all of the outstanding common shares of 649. The total purchase price was $100,000. As of December 31, 1999, the cash portion of the acquisition price had not yet been paid, and accordingly, such amount is included in due to stockholders (Note 5). No amount was recorded for the issuance of 6,500,000 shares. The debt to the stockholder was settled on November 15, 2002.
This acquisition was essentially a recapitalization of the Company and a reverse takeover by 649. Pursuant to reverse takeover accounting, goodwill and other intangible assets were not recorded. The acquisition was accounted for using the purchase method of accounting for reverse takeovers whereby the historical financial statements are those of 649. The purchase price was allocated based on the net book value of the net assets of 649 on the date of acquisition and cash consideration of $100,000 and liabilities assumed of $120,383 were treated as a reduction of paid in capital in accordance with rules of accounting for reverse takeovers.
The Company is considered a development stage company in accordance with Statement of Financial Accounting Standards (SFAS) No. 7. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As at June 30, 2004, the Company has not recognized any revenue, has a working capital deficit of $637,681, and has accumulated operating losses of $2,664,360 since its inception. The continuation of the Company is dependent upon the continuing financial support of creditors and stockholders and obtaining long-term financing, the completion of product development and achieving profitability. These condition s raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
2. Significant Accounting Principles
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and are presented in United States dollars.
These consolidated financial statements include the accounts of the Company and its wholly-owned Canadian subsidiary, 649.com, Inc.
The Company’s fiscal year end is December 31.
649.com, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements (expressed in U.S. dollars) (Unaudited) |
2. Significant Accounting Principles (continued)
| d) | Cash and Cash Equivalents |
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
| e) | Foreign Currency Transactions/Balances |
The Company's functional currency is the United States dollar. Occasional transactions occur in Canadian currency, and management has adopted SFAS No. 52, "Foreign Currency Translation". Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at rates of exchange in effect at the balance sheet date. Non-monetary assets, liabilities and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction.
| f) | Use of Estimates and Assumptions |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
The Company intends to sell licenses derived from its Internet based 6/49 lottery game once the beta testing is complete.
The Company will recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." Revenue will be recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectibility is reasonably assured.
The Company will account for the licensing fees on a gross basis pursuant to the requirements of Emerging Issues Task Force No. 99-19 (EITF 99-19).
When determining whether to utilize gross or net recognition of license fees, the Company will consider the following criteria. The Company is the primary obligor to the transaction, the Company has full pricing latitude, the Company can modify the product specifications as it sees fit, the Company will perform part of the service to the end customer, the Company carries sole risk of physical inventory loss, the Company realizes full credit risk, and commission is not fixed.
In determining the terms of our licensing agreement we examined the terms that were standard in the industry at the time. Our main pricing is structured on a licensing basis. The Company anticipates the license fee will be $250,000 for each license sold and an ongoing royalty of 5% of the licensees gross ticket sales.
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" establishes a single accounting model for long-lived assets to be disposed of by sale including discontinued operations. SFAS 144 requires that these long-lived assets be measured at the lower of the carrying amount or fair value less cost to sell, whether reported in continuing operations or discontinued operations.
| i) | Concentration of Credit Risk |
Financial instruments that potentially subject the Company to credit risk consist principally of cash. Cash was deposited with a high credit quality institution.
649.com, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements (expressed in U.S. dollars) (Unaudited) |
2. Significant Accounting Principles (continued)
| j) | Software Development Costs |
Costs incurred in the research and development of software products are charged to operations as incurred until technological feasibility has been established. After technological feasibility is established, any additional costs are to be capitalized in accordance with SFAS No. 86, "Accounting for the Cost of Computer Software to be Sold, Leased or Otherwise Marketed". The establishment of technological feasibility and the ongoing assessment of recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors such as anticipated future revenues, estimated economic life and changes in software and hardware technologies. No software development costs have been capitalized as of June 30, 2004.
| k) | Accounting for Employee Stock Options |
In conformity with the provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," the Company has determined that it will not change to the fair value method prescribed by SFAS No. 123 and will continue to follow Accounting Principles Board Opinion No. 25 for measurement and recognition of employee stock-based transactions.
| l) | Basic and Diluted Net Income (Loss) Per Share |
The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS exclu des all dilutive potential common shares if their effect is anti-dilutive. Loss per share information does not include the effect of any potential common shares, as their effect would be anti-dilutive.
SFAS No. 130, "Reporting Comprehensive Income," establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at June 30, 2003, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
The Company’s financial instruments consist of cash, accounts payable, accrued liabilities, advances from related parties and others. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of cash, accounts payable and accrued liabilities, advances from related parties and other advances approximates their carrying value due to the immediate or short-term maturity of these financial instruments.
649.com, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements (expressed in U.S. dollars) (Unaudited) |
2. Significant Accounting Principles (continued)
| o) | New Accounting Pronouncements |
In December 2003, the United States Securities and Exchange Commission issued Staff Accounting Bulletin No. 104, "Revenue Recognition" (SAB 104), which supersedes SAB 101, "Revenue Recognition in Financial Statements." The primary purpose of SAB 104 is to rescind accounting guidance contained in SAB 101 related to multiple element revenue arrangements, which was superseded as a result of the issuance of EITF 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." While the wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104. The adoption of SAB 104 did not have a material impact on the Company's financial statements.
| p) | Interim Financial Statements |
These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
3. Accounts Payable
| a) | On October 1, 2003, the Company agreed to waive on-line software development fees owing for the period from February 1, 2003 to October 1, 2003. The value of these fees of $90,000 was treated as donated capital. |
| b) | On October 1, 2003, the Company agreed to waive Internet and web hosting fees for the period from January 1, 2003 to September 1, 2003. The value of these fees of $45,000 was treated as donated capital. The fiscal 2002 Internet and web hosting fees in the amount of $40,000 will be paid on or before May 1, 2005, or as and when the Company starts earning revenue from the sale of licenses and/or the receipt of royalties. |
4. Related Party Transactions/Balances
The Company made advances to, and received advances from, its largest stockholder. No formal repayment arrangement exists for such advances, which have historically been made or received on an "as-needed" basis. During fiscal 2002 a non-related party assumed the amount due to the Company’s largest stockholder. On November 15, 2002 the Company issued 29,000,000 common shares at $.0034 per share to settle debt of $98,600.
As of June 30, 2004, the Company owes a stockholder $8,242 (2003: $8,242). During the six months ended of June 30, 2004 imputed interest of $618 (2003: $618) was charged to operations and treated as donated capital.
5. Due to Non-Related Parties
The amounts owing to non-related parties totalling $425,992 as at June 30, 2004, are non-interest bearing, have no specific terms of repayment and are due on demand. During the six months ended June 30, 2004 imputed interest of $31,816 (2003: $31,905) was charged to operations and treated as donated capital.
649.com, Inc. (A Development Stage Company) Notes to the Consolidated Financial Statements (expressed in U.S. dollars) (Unaudited) |
6. Common Stock
The Company has a Stock Option Plan approved and registered December 1, 1999. Pursuant to this plan the Company can issue up to 10% of the outstanding common shares on December 1 of each year to certain key directors and employees. As at of June 30, 2004 and December 31, 2003 there were no outstanding stock options.
The options are granted for services provided to the Company. Statement of Financial Accounting Standards No. 123 ("SFAS 123") requires that an enterprise recognize, or at its option, disclose the impact of the fair value of stock options and other forms of stock based compensation in the determination of income. The Company has elected under SFAS 123 to continue to measure compensation costs on the intrinsic value basis set out in APB Opinion No. 25. As stock options are granted at exercise prices based on the market price of the Company’s shares at the date of grant, no compensation cost is recognized. However, under SFAS 123, the impact on net income and income per share of the fair value of stock options must be measured and disclosed on a fair value based method on a pro forma basis. As performance stock for non-emplo yees is issued for services rendered, the fair value of the shares issued is recorded as compensation cost, at the date the shares are issued, based on a discounted average trading price of the Company’s stock as quoted on the Pink Sheets.
The fair value of the employee’s purchase rights, pursuant to stock options, under SFAS 123, will be estimated using the Black-Scholes model.
649.COM INC. (ABET.PK)
(A Development Stage Company)
QUARTERLY REPORT (SEC FORM 10-QSB)
OVERVIEW
We have developed a proprietary instant on-line lottery software program that we intend to license to legally operated lottery organizations, which are typically land-based government operated agencies. The game which is played on-line is similar to the well-known land-based lottery game known as "PowerBall" in the USA and ‘lotto 649’ in Canada, the United Kingdom, Spain, France, Holland and Germany.
It is anticipated revenue will be earned from the sale of licenses and from royalty fees generated from the gross revenue of the Licensee’s Lottery operation.
649.com expects to sell licenses to operate an on-line Lottery game for approximately $250,000 and expects to earn an on going royalty fees of 5% of the licensees’ ticket sales. We do not propose to sell a License to any company that is not operating under government license or in a jurisdiction that disallows on-line gaming. We propose to sell Licenses to government lottery agencies around the world and to foreign-based corporations in jurisdictions that support Internet gaming including Australia, England, South Africa, Isle of Man, Liechtenstein, St Kitts and others.
We entered into an Agreement with Syntec Software on 15th July, 2002 whereby Syntec agreed to update and redevelop the 649.com software program game client interface in flash and to provide a full management suite and tracking system as well as the integration of a cashier system. Syntec also agreed to move the database from Oracle and create a database in MYSQL.
Under the terms of the Agreement, Syntec had undertaken to complete the play for fun model by December 30th 2002 and the pay-for-play model by April 2003. Syntec has completed both models, which are ready for launch.
We have requested Syntec Software to further develop a new software program, similar to a conventional lottery game, which will enable a land based lottery organization to potentially sell millions of tickets on-line, for a specific draw date, as an alternative to the instant draw. They have agreed to provide this new software as soon as we have raised working capital to pay them.
In October 2003, we amended our original Agreement with Syntec who agreed to waive the fees for the period dating February 1st to October 1st 2003 and not charge any additional fees, until such time that the software has been launched.
We had requested J. Alexander Securities Inc. to act as a market maker for 649.com. Their mandate was to file a Form 211 Application with the NASD under SEC Rule 15c2-11, in order for 649.com to be reinstated on the OTC.BB.
In July 2004, we decided to terminate our business relationship with J. Alexander Securities, as they were unable to achieve the mandate. We have, subsequently, requested that Pennaluna & Company act as a market maker for 649.com.
Item 2. MANAGEMENTS’ DISCUSSION AND ANLAYSIS OR PLAN OF OPERATION
Plan of Operations
The following discussion contains certain forward-looking statements that are subject to business and economic risks and uncertainties, and our actual results could differ materially from those forward-looking statements. The following discussion regarding our financial statements should be read in conjunction with the financial statements and notes thereto.
We are a development stage company. In a development stage company, management devotes most of its activities to establishing a new business. Planned principal activities have not yet generated any revenue and the Company has suffered recurring losses from inception, totaling $2,664,360 and has a working capital deficit of $637,681. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
We do not expect to report any revenue from operations at least until after the sale of a license. Even after the sale of a license, there can be no assurance that we will generate positive cash flow and there can be no assurances as to the level of revenues, if any, that we may actually achieve from the on-line lottery game. However, management has the expertise to market the Lottery licenses and expects to sell one or more licenses within six months of being reinstated on the OTC.BB. Each License will be sold for approximately $250,000 and will also generate an ongoing royalty fee of 5% of tickets sold by the Licensee. We also expect to earn revenue from selling banner advertising on our web site as soon as the software program has been launched, although with the decrease in advertising rates and the lack of advertisers, we may find difficulty in generating any significant revenue from this source. We will also earn revenue from sending players to other gaming sites. This is typically achieved through an affiliate program that is offered by a gaming site who would pay as much as $100 per referral.
RESULTS OF CONTINUING OPERATIONS
Six months ended June 30, 2004 ("2004") compared to the six months ended June 30, 2003 ("2003"):
The Company has no revenue for 2004 and 2003. Expenses decreased by $92,081 to $54,335 in 2004 as compared to $146,616 in 2003. There were no consulting fees in 2004 as compared to $60,000 in 2003. There were no Internet and web hosting fees in 2004 as compared to $30,000 in 2003.
The net loss for 2004 was $54,335 as compared to $146,416 in 2003. Our net loss per share remained at $nil for 2004 and 2003.
FINANCIAL CONDITION AND LIQUIDITY
At June 30, 2004 the Company had cash and cash equivalents totaling $158 compared to $81 at December 31, 2003.
The Company received cash advances of $4,578 from a non-related party, these amounts are unsecured, non-interest bearing and due on demand. These funds were used to fund our operating activities and increase our cash position by $77. As a result, our cash position has increased during 2004 to $158 and our working capital deficit, as at June 30, 2004, is $637,681.
Item 3. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that information that is required to be disclosed in the Securities Exchange Act of 1934 reports are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Within 90 days prior to the date of this report, our management carried out an evaluation, under the supervision and with the participation of the management on the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, our President concluded that our disclosure controls and procedures are effective in connection with the filing of this Quarterly Report on Form 10-QSB for the period ended June 30, 2004.
There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K
None.
None.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
649.COM INC.
(Registrant)
/s/ Mark Glusing | | Date: August 5, 2004 |
Mark Glusing President / Director | | |
In accordance with the Securities Exchange Act this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
/s/ Mark Glusing | | Date: August 5, 2004 |
Mark Glusing President / Director | | |
/s/ Cary Martin | | Date: August 5, 2004 |
Cary Martin Secretary / Treasurer / Director | | |
