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: March 31, 2002
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)
(949) 553-9660
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(Issuer's Telephone Number)
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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 March 31, 2002, was 5,150,098
1
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three month period
ended March 31, 2002, are attached hereto.
2
UNITED TRADING.COM
(A Development Stage Enterprise)
BALANCE SHEET
ASSETS
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March 31, 2002 Dec. 31, 2001
(Unaudited)
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CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . $ 23 1,590
Current portion of contacts receivable (Note 2) . - -
Deposits. . . . . . . . . . . . . . . . . . . . . - -
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Total Current Assets . . . . . . . . . . . . . . . . 23 1,590
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PROPERTY AND EQUIPMENT
Fixed Assets - -
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Total Property and Equipment . . . . . . . . . - -
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OTHER ASSETS . . . . . . . . . . . . . . . . . . . . - -
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- -
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Total Assets . . . . . . . . . . . . . . . . . $ 23 1,590
============ ==========
Liabilities and Shareholder Equity
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . . . . 98,086 55,499
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Total Current Liabilities. . . . . . . . . . . . . . 98,086 55,499
OTHER LIABILITIES. . . . . . . . . . . . . . . . . . - -
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98,086 55,499
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STOCKHOLDERS' EQUITY
Common Stock Par value $0.001 (50,000,000 shares
authorized, 5,150,098,and 5,150,098 issued
and outstanding). . . . . . . . . . . . . . . . 5,150 5,150
Additional Paid-in Capital. . . . . . . . . . . . 1,167,829 1,167,829
Retained Deficit - accumulated during
Development Stage. . . . . . . . . . . . . . . (1,271,043) (1,226,889)
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Total Stockholders' Equity. . . . . . . . . . . . (98,063) (53,909)
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Total Liabilities and
Stockholders' Equity . . . . . . . . . $ 23 1,590
============ ==========
See accompanying notes to financial statements
3
UNITED TRADING.COM
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
(Unaudited)
Inception
Three months Three Months December 31, 1994
Ended Ended Thru
March 31, 2002 March 31, 2001 March 31, 2002
--------------- --------------- ---------------
REVENUES
Consulting fees. . . . . . . . . . . . . . . $ - $ - $ 544,894
Sales. . . . . . . . . . . . . . . . . . . . - - 770,000
Interest Income. . . . . . . . . . . . . . . - - 3,764
--------------- --------------- ---------------
Total Revenues. . . . . . . . . . . . . . - - 1,318,658
EXPENSES
General and Administrative . . . . . . . . . 44,154 65,694 1,135,169
Allowance for Uncollectable Debt . . . . . . - - 160,937
Loss from write-down of software . . . . . . - - 538,492
Loss from write-down of notes receivable . . - - 406,067
Depreciation and Amortization. . . . . . . . - 32,396 164,508
Loss from activities of NetBet . . . . . . . - - 184,528
--------------- --------------- ---------------
Total Expenses. . . . . . . . . . . . . . 44,154 98,090 2,589,701
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Net Pre-Tax Income (Loss) . . . . . . . . . . . $ (44,154) $ (98,090) $ (1,271,043)
Income Taxes (Note 4). . . . . . . . . . . . - 24,000 -
--------------- --------------- ---------------
Net Income (Loss) After Taxes . . . . . . . . . $ (44,154) $ (74,090) $ (1,271,043)
=============== =============== ===============
Net Income (loss) per
Common Share, basic and diluted . . . . . . ($0.009) $ (0.014) ($0.734)
=============== =============== ===============
Weighted Average number of Common
Shares outstanding, basic and diluted
adjusted for 1/50 reverse split in 1999,
3/1 forward spit in October, 2000,
and 1/8 reverse split in 2001 . . . . . . . . 5,150,098 5,150,098 1,732,378
=============== =============== ===============
See accompanying notes to financial statements
4
UNITED TRADING.COM
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
(Unaudited)
Inception
Three Months three Months Dec 31, 1994
Ended Ended Thru
March 31, 2002 March 31, 2001 March 31, 2002
--------------- --------------- ---------------
OPERATING ACTIVITIES
- ----------------------------------
Net Income (Loss). . . . . . . . . . . . . . . . $ (44,154) $ (74,090) ($1,271,043)
Adjustments to reconcile Net Loss to Cash
provided (used) by operating activities:
Depreciation and Amortization . . . . . . . . - 32,396 140,963
Loss on disposal of office Furniture & Equip. - 10,258 15,972
Loss on write-off of software for license . . - - 538,492
loss on cancellation of notes receivable. . . - - 406,067
Changes in operating assets and liabilities:
Decrease (increase) in Deferred
Offering Costs . . . . . . . . . . . . . . - - -
Increase (decrease) in Accounts Payable . . . 42,588 3,271 98,087
Increase (decrease) in Income Taxes Payable . - - -
(Increase) decrease in Receivable from
Software License Sales . . . . . . . . . . - 50,000) (406,067)
(Increase) decrease in Other Receivables. . . - (2,819) -
Increase (decrease) in Advance License Fees . - (20,362) -
(Increase) decrease in Deposits . . . . . . . - 25,000 -
Increase (decrease) in Deferred Taxes . . . . - 24,000 -
--------------- --------------- ---------------
Net cash provided by Operating Activities. . . . (1,566) 2,473 (477,529)
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INVESTMENT ACTIVAITIES
- --------------------------------------
Decrease (increase) in Property and
Equipment. . . . . . . . . . . . . . . . . - - (36,318)
Decrease (increase) in Software for
License. . . . . . . . . . . . . . . . . . - (27,399) (661,618)
Decrease (increase) in Organization Costs . . - - (1,190)
--------------- --------------- ---------------
Net cash (used) by Investment activities . . . . - (27,399) (699,126)
--------------- --------------- ---------------
FINANCING ACTIVITIES
- ---------------------------------
Disposal of Office Furniture & Equip. . . . . - 3,700 3,700
Increase (decrease) in Common Stock . . . . . - - 1,172,979
--------------- --------------- ---------------
Net cash provided by Financing Activities. . . . - 3,700 1,176,679
--------------- --------------- ---------------
Increase (decrease) in Cash. . . . . . . . . . . (1,566) (21,226) 1,590
Cash at Beginning of Period. . . . . . . . . . . 1,590 21,975 -
--------------- --------------- ---------------
Cash at End of Period. . . . . . . . . . . . . . $ 23 $ 749 $ 23
=============== =============== ===============
See accompanying notes to financial statements
5
UNITED TRADING.COM
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
March 31, 2002
NOTE 1 - Basis of Presentation
------------------------
The accompanying consolidated balance sheet of United Trading.Com (A Development
Stage Company) at March 31, 2002, and the consolidated statements of operations
for the three month period ended March 31, 2002 and 2001 and the cumulative
period during the development stage through March 31, 2002 and the statement of
cash flows for three month period ended March 31, 2002 and 2001 and the
cumulative period during the development stage through March 31, 2002, have been
prepared by the Company's management and they do not include all information of
the financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature. The unaudited financial statements should be
read in conjunction with the financial statements and footnotes thereto included
in the Company's Form 10-KSB for the year ended December 31, 2001.
Operating results for the three month period ended March 31, 2002, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2002.
NOTE 2 - Contracts Receivable
The Company had 2 contacts each outstanding for the licensed use of its casino
and sports book software at March 31, 2001. These contracts were cancelled
effective June 30, 2001 and replaced by a License Agreement calling for 7 1/2
percent of the net revenues from the Licensee's use of the Software for its own
account or from any sub-license of the Software. The Company recorded a loss of
$406,067 from the write-off of the contracts in the quarter ended June 30, 2000.
As of March 31, 2002, no revenues have been received from the 7 1/2 % net
revenues license agreement. While the holder of the 7 1/2% net revenues license
agreement has reported an increase in receipts from player activity on its
Internet site, there have been no net revenues to date, and there can be no
assurance that there will ever be any such net revenues.
NOTE 3 - Software for Licensing
The Company capitalized costs of developing its Software for Licensing as costs
were incurred, and began amortizing such costs in the final quarter of 2000.
Amortization was also taken in the three and six months ended June 30, 2001 in
the amounts of $32,396 and 64,792 respectively. The unamortized balance of
expenditures for the development of the Software for Licensing was written off
to expense effective June 30, 2001 due to the Company's inability to determine
the future worth of the 7 1/2 % net revenue license agreement for use of the
Software.
Note 4 - Income Taxes
The Company recorded $40,000 in deferred income taxes in the year ended December
31, 2000 based on income reported in 2000. Due to losses in the first quarter of
2001, $24,000 of the deferred taxes were reversed in the quarter ended March 31,
2001.
6
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 recorded no revenues for the quarters
ended March 31, 2002, or 2001 .
In February 2002, the Company announced an agreement to acquire Quick Draw,
Inc., a Nevada corporation, owner of ATM machines located throughout the United
States, subject to completion of due diligence by United Trading. As of March
31, 2002, United Trading was working closely with Quick Draw to complete funding
for the first phase of Quick Draw's expansion. In accordance with the
acquisition agreement, this funding was to be completed prior to the
finalization of the acquisition of Quick Draw by United Trading. Quick Draw is
still in the process of acquiring such financing and is unable to provide an
explicit date for completion. United Trading continues to be committed to
completing the acquisition of Quick Draw and has authorized an extension of the
agreement to enable Quick Draw to complete the required financing.
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.
7
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
three month period ended March 31, 2002.
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 - NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits None
(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: April 14, 2002 By: /James G. Brewer
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James G. Brewer, President, CEO, CFO and
Chief Accounting Officer
8