UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: February 28, 2007
------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from _____ to_____
Commission file number 000-32247
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1-900 Jackpot, Inc.
---------------------
(Exact name of small business issuer as
specified in its charter)
Nevada 98-0219399
- --------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
3838 Raymert Drive, Suite 3, Las Vegas, NV 89121
--------------------------------------------------
(Address of principal executive offices)
(604) 575-0050
Issuer's telephone number
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant is a shell company( as defined by
Rule 12b-2 of the Exchange Act.)
Yes No X
--------- ------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING 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. Yes No
----- -----
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 practical date: February 28,2007 14,168,935
Transitional Small Business Disclosure Format (check one).
Yes ; No X
---- -----
ITEM 1. FINANCIAL STATEMENTS
1-900 JACKPOT, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
February 28, August 31,
-------------------------------------
2007 2006
----------------- ------------------
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 755,198 $ 861,328
Available-For-Sale Securities 276,111 597,294
Prepaid Expenses 4,437 6,177
Withholding Taxes 11,066 5,074
----------------- ------------------
Total Current Assets 1,046,812 1,469,873
----------------- ------------------
OTHER ASSETS
Intangible Assets 10,000 10,000
----------------- ------------------
Total Other Assets 10,000 10,000
----------------- ------------------
Total Assets $ 1,056,812 $ 1,479,873
================= ==================
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ - $ 584
----------------- ------------------
Total Current Liabilities - 584
----------------- ------------------
STOCKHOLDERS' EQUITY
Preferred Stock, Par value $.001, Authorized
1,000,000 shares, Issued 0 Shares
at February 28, 2007 and August 31, 2006
Common Stock, Par value $.001, Authorized
200,000,000 shares, Issued 14,168,935 Shares
at February 28, 2007 and August 31, 2006 14,169 14,169
Paid-In Capital 4,648,567 4,646,246
Cumulative Other Comprehensive Income (398,921) (77,739)
Retained Deficit (5,912) (5,912)
Deficit Accumulated During the Development Stage (3,201,091) (3,097,475)
----------------- ------------------
Total Stockholders' Equity 1,056,812 1,479,289
----------------- ------------------
Total Liabilities and Stockholders' Equity $ 1,056,812 $ 1,479,873
================= ==================
See accompanying notes
1-900 JACKPOT, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
since
September 1,
2001
For the three months ended For the six months ended Inception of
February 28, February 28, Development
----------------------------------- ---------------------------------
2007 2006 2007 2006 Stage
----------------- ---------------- ---------------- ---------------- ------------------
Revenues $ - $ - $ - $ - $ -
----------------- ---------------- ---------------- ---------------- ------------------
Expenses
General and Administrative 85,824 14,000 160,818 164,000 395,948
----------------- ---------------- ---------------- ---------------- ------------------
Net Income (Loss) from
Continued Operations (85,824) (14,000) (160,818) (164,000) (395,948)
----------------- ---------------- ---------------- ---------------- ------------------
Other Income (Expenses)
Interest Income 8,156 - - 17,254 34,511
Dividend Income 16,402 - - 39,948 73,774
Gain on sale of Investment - - - - 3,221
Interest Expense - - - - (4)
(4) ----------------- ---------------- ---------------- ---------------- ------------------
Total Other Income 24,558 - 57,202 - 111,502
----------------- ---------------- ---------------- ---------------- ------------------
Discontinued Operations
Loss on Sale of Subsidiary - - - - (2,916,645)
----------------- ---------------- ---------------- ---------------- ------------------
Net Income (Loss) $ (61,266) $ (14,000) $ (103,616) $ (164,000) $ (3,201,091)
================= ================ ================ ================ ==================
Other Comprehensive Loss
Unrealized Gain (Loss) on
Available for sale securities (119,565) - (321,182) - (398,921)
----------------- ---------------- ---------------- ---------------- ------------------
Total Other Comprehensive Loss (119,565) - (321,182) - (398,921)
----------------- ---------------- ---------------- ---------------- ------------------
Total Comprehensive Loss $ (180,831) $ (14,000) $ (424,798) $ (164,000) $ (3,600,012)
================= ================ ================ ================ ==================
Net Loss Available to Shareholder $ (60,726) $ (14,000) $ (103,616) $ (164,000)
================= ================ ================ ================
Basic & Diluted Loss per Share (0.01) (0.01) (0.01) (0.13)
================= ================ ================ ================
Weighted Average Shares Outstanding 7,019,719 2,084,491 7,019,719 1,254,921
================= ================ ================ ================
See accompanying notes
1-900 JACKPOT, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative
Since
September 1,
2001
For the Six Months Ended Inception of
February 28, Development
-----------------------------------
2007 2006 Stage
----------------- ---------------- ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (103,616) $ (164,000) $ (3,201,091)
Increase (Decrease) in Accounts Payable (584) - -
(Increase) Decrease in Prepaid Expenses 1,740 (4,437)
(Increase)Decrease in Withholding Taxes (5,991) (11,065)
Common Stock Issued for Services - 14,000 -
Gain on Sale of Investments - - (3,221)
Net Loss from Discontinued Operations - 150,000 2,916,645
----------------- ---------------- ------------------
Net Cash Used in Operating Activities (108,451) - (303,169)
----------------- ---------------- ------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of Available-for-Sale Securities - - (720,977)
Sale of Available-for-Sale Securities - - 42,915
----------------- ---------------- ------------------
Net Cash Provided by Investing Activities - - (678,062)
----------------- ---------------- ------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Purchase of Company Stock (162,477) - (162,477)
Proceeds of Company Stock 164,798 - 164,798
Proceeds from Loans - - 1,734,108
----------------- ---------------- ------------------
Net Cash Provided by Financing Activities 2,321 - 1,736,429
----------------- ---------------- ------------------
Net (Decrease) Increase in
Cash and Cash Equivalents (106,130) - 755,198
Cash and Cash Equivalents
at Beginning of Period 861,328 - -
----------------- ---------------- ------------------
Cash and Cash Equivalents
at End of Period $ 755,198 $ - $ 755,198
================= ================ ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ - $ 4
Franchise and Income Taxes $ - $ - $ -
See accompanying notes
1-900 JACKPOT, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cumulative
Since
September 1,
2001
For the Six Months Ended Inception of
February 28, Development
-----------------------------------
2007 2006 Stage
----
----------------- ---------------- ------------------
Stock Issued for Payment on Loan $ - $ - $ 1,734,108
Issued Common Stock for Intangible Asset $ - $ - $ 10,000
See accompanying notes
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for 1-900 Jackpot, Inc. (a
development stage company) is presented to assist in understanding the Company's
financial statements. The accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
Going Concern
The accompanying financial statements have been prepared on the basis
of accounting principles applicable to a "going concern", which assume that the
Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.
Several conditions and events cast doubt about the Company's ability to
continue as a "going concern". The Company had a wholly owned operating
subsidiary that has now been abandoned because of recurring losses. The Company
has no source of revenue, has suffered recurring losses from operations, has a
deficit accumulated during the development stage and requires additional
financing in order to finance its business activities on an ongoing basis. The
Company is actively pursuing alternative financing and has had discussions with
various third parties, although no firm commitments have been obtained. In the
interim, shareholders of the Company have committed to meeting its minimal
operating expenses.
The Company's future capital requirements will depend on numerous
factors including, but not limited to, the Company receiving continued financial
support, completing public equity financing, or generating profitable operations
in the future.
These financial statements do not reflect adjustments that would be
necessary if the Company were unable to continue as a "going concern". While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful.
If the Company were unable to continue as a "going concern", then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported expenses, and the balance
sheet classifications used.
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Interim Reporting
The unaudited financial statements as of February 28, 2007 and for the
six month period then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three and
nine months. Operating results for interim periods are not necessarily
indicative of the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
August 20, 1999. On August 20, 1999, the shareholders of the Company entered
into an agreement to transfer all of their shares in Pultronex Corporation of
Alberta to Pultronex Corporation of Nevada in exchange for shares of Pultronex
Corporation of Nevada. As a result of that exchange, Pultronex Corporation of
Alberta became a wholly owned subsidiary of Pultronex Corporation of Nevada. For
financial statement purposes, the Company is considered to be a continuation of
Pultronex Corporation of Alberta. Therefore, the financial statement for the
period ended August 31, 1999 include the results of operations of Pultronex
Corporation of Alberta from the beginning of the period. Comparative figures for
the period ended December 31, 1998 are those of Pultronex Corporation of Alberta
from April 2, 1998, the date it commenced operations. Subsequently, on September
1, 2001, the Company disposed of Pultronex Corporation of Alberta and entered
the development stage.
On July 12, 2005, Pultronex Corporation changed its name to 1-900
Jackpot, Inc.
Nature of Business
The Company has no products or services as of February 28, 2007. The
Company was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company.
The Company has acquired certain Intellectual Lottery Product assets
in exchange for stock. The Company intends to license these products to various
government-run lotteries and private and public companies that are seeking new
products for their operations.
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of 90 days or less to
be cash equivalents to the extent the funds are not being held for investment
purposes.
Loss per Share
Basic earnings (loss) per share has been computed by dividing the
income (loss) for the year applicable to the common stockholders by the weighted
average number of common shares outstanding during the years. There were no
common stock equivalents outstanding as of February 28, 2007 and 2006.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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 period. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The Company maintains the majority of its cash
balances with one financial institution, in the form of marketable securities.
At times, such investments may be in excess of any insurance limit.
Foreign Currency Translation
The Company's functional currency is the U.S. dollar and the reporting
currency is the U.S. dollar. Monetary assets and liabilities resulting from
transactions with foreign suppliers and customers are translated at year end
exchange rates while income and expense accounts are translated at average rates
in effect during the year. Gains and losses on translations are included in
income.
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Income Taxes
The Company has a net operating loss for income taxes. Due to the
regulatory limitation in utilizing the loss, it is uncertain whether the Company
will be able to realize a benefit from theses losses. Therefore, a deferred tax
asset has not been recorded. There are no significant tax differences requiring
deferral.
Reclassifications
Certain reclassification have been made in the 2006 financial
statements to conform with the 2007 presentation.
Intangible Assets
The Company has adopted the Financial Accounting Standards Board SFAS
No. 142, "Goodwill and Other Intangible Assets" SFAS 142 requires, among other
things, that companies no longer amortize goodwill, but instead test goodwill
for impairment at least annually. In addition, SFAS 142 requires that the
Company identify reporting units for the purposes of assessing potential future
impairments of goodwill, reassess the useful lives of other existing recognized
intangible assets, and cease amortization of intangible assets with an
indefinite useful life. An intangible asset with an indefinite useful life
should be tested for impairment in accordance with the guidance of SFAS 142.
February 28,
Intangible Asset 2007 2006 Amortization Period
- ------------------ --------------- ------------- ------------------------
Lottery Assets $ 10,000 $ - Indefinite
--------------- -------------
Total $ 10,000 $ -
=============== =============
Recent Accounting Standards
Management does not believe that the adoption of this policy will have any
effect on its financial statements.In February 2006, The FASB issued SFAS No.
155 "Accounting for Certain Hybrid Financial Instruments - an amendment of FASB
Statements No. 133 and 140." This statement amends FASB 133, Accounting for
Derivative Instruments and Hedging Activities and Statement and No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities.
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Recent Accounting Standards(Continued)
The statement permits fair value remeasurement for any hybrid financial
instrument that contains an embedded derivative that would otherwise require
bifurcation, clarifies which interest only strips and principal are not subject
to the requirements of Statement 133, establishes a requirement to evaluate
interest in securitized financial assets, clarifies that concentrations of
credit risk in the form of subordination are not embedded derivatives and amends
statement 140 to eliminate the prohibition on a qualifying special-purpose
entity from holding a derivative financial instrument to a beneficial interest
other than another derivative financial instrument. The statement is effective
for fiscal years beginning after September 15, 2006. Management does not expect
this statement to have any material effect on its financial statements.
In March 2006 the FASB issued SFAS No. 156 " Accounting for Servicing of
Financial Instruments - an amendment of FASB No.140, Accounting for Transfers
and Servicing of Financial Instruments and Extinguishments of Liabilities. The
statement requires an entity to recognize a servicing asset or servicing
liability each time it undertakes an obligation to service an asset by entering
into a servicing contract, requires all separately recognized servicing assets
and servicing liabilities to be initially measured at fair market value, permits
an entity to choose either the amortization method or fair market value
measurement method for subsequent measurement periods for each class of
separately recognized servicing assets and servicing liabilities, permits a
one-time reclassification of the available-for-sale securitites to trading
securities by entities with recognized servicing rights at its initial adoption,
and requires separate presentation of servicing assets and servicing liabilities
subsequently measured at fair value. The statement is effective for fiscal years
beginning after September 15, 2006. Management does not expect this statement to
have any material effect on its financial statements
In June, 2006 the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes--an interpretation of FASB Statement No. 109". This Interpretation
clarifies, among other things, the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with FASB
Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. This Interpretation also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure, and transition is effective for fiscal years beginning after
December 15, 2006. Earlier application is encouraged if the enterprise has not
yet issued financial statements, including interim financial statements, in the
period the Interpretation is adopted. FIN 48, Accounting for Uncertainty in
Income Taxes--an interpretation of FASB Statement No. 109, is effective for
fiscal years beginning
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Recent Accounting Standards (Continued)
after December 15, 2006. Earlier application is encouraged if the enterprise has
not yet issued financial statements, including interim financial statements, in
the period the Interpretation is adopted. Management is evaluating the financial
impact of this pronouncement.
In September 2006, the FASB issued SFAS No. 157, "Accounting for Fair Value
Measurements." SFAS No. 157 defines fair value, and establishes a framework for
measuring fair value in generally accepted accounting principles and expands
disclosure about fair value measurements. SFAS No. 157 is effective for the
Company for financial statements issued subsequent to November 15, 2007. The
Company does not expect the new standard to have any material impact on the
financial position and results of operations.
In September 2006, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 108 ("SAB 108") which provides interpretive
guidance on how the effects of the carryover or reversal of prior year
misstatements should be considered in quantifying a current year misstatement.
SAB 108 becomes effective in fiscal 2007. Management is evaluating the financial
impact of this pronouncement.
In December 2006, the FASB approved FASB Staff Position (FSP) No. EITF 00-19-2,
"Accounting for Registration Payment Arrangements" ("FSP EITF 00-19-2"), which
specifies that the contingent obligation to make future payments or otherwise
transfer consideration under a registration payment arrangement, whether issued
as a separate agreement or included as a provision of a financial instrument or
other agreement, should be separately recognized and measured in accordance with
SFAS No. 5, "Accounting for Contingencies". FSP EITF 00-19-2 also requires
additional disclosure regarding the nature of any registration payment
arrangements, alternative settlement methods, the maximum potential amount of
consideration and the current carrying amount of the liability, if any. The
guidance in FSP EITF 00-19-2 amends FASB Statements No. 133, "Accounting for
Derivative Instruments and Hedging Activities", and No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity", and FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure
requirement for Guarantees, Including Indirect Guarantees of Indebtedness of
Others", to include scope exceptions for registration payment arrangements.
FSP EITF 00-19-2 is effective immediately for registration payment arrangements
and the financial instruments subject to those arrangements that are entered
into or modified subsequent to the issuance date of this FSP, or for financial
statements issued for fiscal years beginning after December 15, 2006, and
interim periods within those fiscal years, for registration payment arrangements
entered into prior to the issuance date of this FSP. The adoption of this
pronouncement is not expected to have an impact on the Company's financial
position, results of operations or cash flows.
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Recent Accounting Standards (Continued)
In October 2005, the FASB issued FSP FAS 123(R)-2, "Practical Accommodation to
the Application of Grant Date as Defied in FASB Statement No. 123(R)", which
provides clarification of the concept of mutual understanding between employer
and employee with respect to the grant date of a share-based payment award. This
FSP provides that a mutual understanding of the key terms and conditions of an
award shall be presumed to exist on the date the award is approved by management
if the recipient does not have the ability to negotiate the key terms and
conditions of the award and those key terms and conditions will be communicated
to the individual recipient within a relatively short time period after the date
of approval. This guidance was applicable upon the initial adoption of SFAS
123(R). The adoption of this pronouncement did not have an impact on the
Company's financial position, results of operations, or cash flows.
In February 2007, the FASB issued SFAS no, 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 provides
companies with an option to report selected financials assets and liabilities at
fair value. The objective of SFAS 159 is to reduce both complexity in accounting
for financial instruments and the volatility in earnings caused by measuring
related assets and liabilities differently. Generally accepted accounting
principles have required different measurement attributes for different assets
and liabilities that can create artificial volatility in earnings.
The FASB has indicated it believes that SFAS 159 helps to mitigate this type of
accounting-induced volatility by enabling companies to report related assets and
liabilities at fair value, which would likely reduce the need for companies to
comply with detailed rules for hedge accounting. SFAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types
of assets and liabilities.
SFAS 159 does not eliminate disclosure requirements included in other accounting
standards, including requirements for disclosures about fair value measurements
included in SFAS 157 and SFA No. 107, "Disclosures about Fair Value of Financial
Instruments." SFAS 159 is effective for the Company as of the beginning of
fiscal year 2009. The adoption of this pronouncement is not expected to have an
impact on the Company's financial position, results of operations or cash flows.
Fair Value of Financial Instruments
The carrying value of the Company's financial instruments, include cash
at February 28, 2007 approximates their fair values. The carrying values of
marketable securities available for sale are based on quoted market prices.
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 2 - INCOME TAXES
As of August 31, 2006, the Company had a net operating loss
carryforward for income tax reporting purposes of approximately $3,097,475 that
may be offset against future taxable income through 2026. Current tax laws limit
the amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance of the
same amount.
The Company has the following tax assets:
2006 2005
------------------ ------------------
Net Operating Losses $ 1,053,142 $ 991,815
Valuation Allowance (1,053,142) (991,815)
------------------ ------------------
$ - $ -
================== ==================
The provision for income taxes differs from the amount computed using
the federal US statutory income tax rate as follows:
2006 2005
------------------ --------------
Provision (Benefit) at US Statutory Rate $ (61,327) $ (156)
Increase (Decrease) in Valuation Allowance 61,327 156
------------------ --------------
$ - $ -
================== ==============
The Company evaluates its valuation allowance requirements based on
projected future operations. When circumstances change and causes a change in
management's judgement about the recoverability of deferred tax assets, the
impact of the change on the valuation is reflected in current income.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of February 28, 2007, all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the facilities.
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 5- COMMON STOCK TRANSACTIONS
On November 16, 2005, the company issued 2,027,027 shares of common
stock to Fletcher & Associates for payment on a loan of $150,000.
On February 10, 2006 the Board of Directors authorized a 1-for-74
reverse split of all of the issued and outstanding shares of common stock. The
stock split decreased the number of outstanding common shares from 154,248,115
to 2,084,491 as of February 28, 2006. All references to the company's common
stock in the financial statements have been restated to reflect the stock split.
On March 21, 2006 the Company acquired certain Intellectual Lottery
Product assets for $10,000 from Umbrella Assets Management Inc, in exchange of
the issuance of 10,000,000 shares of common stock..
On March 27, 2006 the Company issued 2,084,444 common shares to
Umbrella Management Inc. as payment of a loan of $1,584,108.
During the February 28, 2007 period as an assistance to a stockholder,
the Company purchased 4,939 of its Common Shares for a gross total cost of
$162,477. During the current period, the Company sold these 4,939 Common Shares
for a net total of $164,798. The gain of $2,321 is credited to Additional
Paid-in Capital.
NOTE 6- INVESTMENTS
Available-for-Sale Securities
The Company's securities investment that are bought are held for an
indefinite period of time and are classified as available-for-sale securities.
Available securities are recorded at fair value on the balance sheet in current
assets, with the change in fair value during the period excluded from earnings
and recorded net of tax as a component of other comprehensive income.
Investments in securities are summarized as follows:
February 28, 2007
-------------------------------------------------
Gross Gross
Unrealized Unrealized
Gain Loss Fair Value
---------------- ----------------- -------------
Available-for-sale securities $ - $ 321,182 $ 276,111
================ ================= =============
1-900 JACKPOT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 6- INVESTMENTS (Continued)
August 30, 2006
-------------------------------------------------
Gross Gross
Unrealized Unrealized
Gain Loss Fair Value
------------ ------------------- ---------------
Available-for-sale securities $ - $ 83,989 $ 597,294
============ =================== ===============
Realized Gains and losses are determined on the basis of specific
identification. During the six months ended February 28, 2007 and 2006, sales
proceeds and gross realized gains and losses on securities classified as
available-for-sale securities were:
For the Three Months Ended
February 28,
2007 2006
------------------ ------------------
Sale Proceeds $ - $ -
================== ==================
Gross Realized Losses $ - $ -
================== ==================
Gross Realized Gains $ - $ -
================== ==================
NOTE 7- RELATED PARTY TRANSACTIONS
During the year, the Company engaged a Company to manage its Internet
and Web Site services. This Company employs Mr. Justin Fisher who is the son of
1-900 Jackpot, Inc.'s CEO. The total of the services purchased during the three
months ended February 28, 2007 and 2006 was $0 and $0, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the ability of the Company to continue its
expansion strategy, changes in costs of raw materials, labor, and employee
benefits, as well as general market conditions, competition and pricing.
Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this Quarterly Report will prove to
be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a presentation by the Company or any other person that
the objectives and plans of the Company will be achieved.
Background and Overview
On February 12, 2002, the Company entered into an agreement to sell the
business of its Canadian operating subsidiary to an unrelated third party. The
sale agreement included substantially all assets and operations of the
consolidated entity with the exception of cash, accounts receivable and raw
materials inventory. Gross proceeds from the sale were approximately $420,000
(CAN$650,000). As the sale included substantially all assets and operations of
the business as described in note 3, the Company effectively discontinued
operations on February 12, 2002. Net proceeds from the sale and from the
realization of the remaining assets of the subsidiary will be distributed to the
primary lender per the terms of the sale agreement and the general security
agreement described in note 9. Management is uncertain whether sufficient
proceeds will be realized to satisfy all other obligations of the subsidiary.
As a consequence of the above agreement, management has abandoned the
operations of the subsidiary company (Pultronex Corporation of Alberta) and has
finalized an orderly wind-up of the affairs of the subsidiary and the parent
company (1-900 Jackpot, Inc. (formerly Pultronex Corporation) of Nevada) has
become totally inactive.
All subsequent filings of the company (1-900 Jackpot, Inc. (formerly
Pultronex Corporation) of Nevada) will reflect the fact the subsidiary company
(Pultronex Corporation of Alberta) has been abandoned and the financial results
of the subsidiary shall be longer be consolidated into the financial statements
of the reporting entity (1-900 Jackpot, Inc. (formerly Pultronex Corporation) of
Nevada).
PLAN OF OPERATIONS
As used herein the term "Company" refers to 1-900 Jackpot, Inc.
(formerly Pultronex Corporation), a Nevada corporation and its predecessors,
unless the context indicates otherwise. The Company is currently a shell company
whose purpose is to acquire operations through an acquisition or merger or to
begin its own start-up business.
The Company is in the process of attempting to identify and acquire a
favorable business opportunity. The Company has reviewed and evaluated a number
of business ventures for possible acquisition or participation by the Company.
The Company has not entered into any agreement, nor does it have any commitment
or understanding to enter into or become engaged in a transaction as of the date
of this filing. The Company continues to investigate, review, and evaluate
business opportunities as they become available and will seek to acquire or
become engaged in business opportunities at such time as specific opportunities
warrant.
During the current quarter, the Company acquired certain Intellectual
Lottery Products assets. The Company intends to license these products to
various government-run lotteries and private and public companies that are
seeking new products for their operations.
The Company had no sales or sales revenues for the three and six months
ended February 28, 2007 or 2006.
The Company had no costs of sales revenues for the three and six months
ended February 28, 2007 or 2006. The plan for licensing the newly acquired
Lottery Product assets is currently being developed. The Company had general and
administrative expenses of $85,824 and $160,818 for the three and six month
period ended February 28, 2007 and $14,000 and $164,000 for the same periods in
2006.
CAPITAL RESOURCES AND LIQUIDITY
At February 28, 2007, the Company had total current assets of
$1,046,812 and total assets of $1,056,812 as compared to $1,469,873 current
assets and $1,479,873 total assets at August 31, 2006. The Company had a net
working capital surplus of $1,046,812 at February 28, 2007 and $1,469,289 at
August 31, 2006. Net stockholders' equity in the Company was $1,056,812 as of
February 28, 2007 and $1,479,289 at August 31, 2006.
ITEM 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer are
responsible for establishing and maintaining disclosure controls and procedures
for the company.
(a) Evaluation of Disclosure Controls and Procedures
As of the end of the reporting period covered by this report,
the company carried out an evaluation, under the supervision of the
participation of the Company's management, including the Company's President, of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Rule 13a-15 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Based upon the evaluation, the
Company's President concluded that, as of the end of the period, the Company's
disclosure controls and procedures were effective in timely alerting him to
material information relating to the Company required to be included in the
reports that the Company files and submits pursuant to the Exchange Act.
(b) Changes in Internal Control
Based on his evaluation as of February 28, 2007, there were no
significant changes in the Company's internal control over financial reporting
or any other areas that could significantly affect the Company's internal
control subsequent to the date of his most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None/Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None/Not Applicable.
ITEM 5. OTHER INFORMATION
None/Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following documents are filed herewith or have been included as
exhibits to previous filings with the Commission and are incorporated herein by
this reference:
Exhibit No. Exhibit
3.1 Articles of Incorporation (1) 3.2 Bylaws (1)
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
period covered by this Form 10-QSB.
(1) Incorporated herein by reference from Registrant's Form SB-2,
Registration Statement, dated February 22, 2000.
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.
1-900 JACKPOT, INC.
April 12, 2007
/s/ Brian Fisher
Brian Fisher
President and Director
(Principal Executive Officer)
/s/ Joseph Batty
Joseph Batty
Chief Financial Officer, Secretary and Director
(Principal Financial Officer)