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, 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.)
1820 Bison, B-9-529
Newport Beach, California
(Address of principal executive offices)
92660
(Zip Code)
(949) 451-4518
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(Issuer's Telephone Number)
Former Address:
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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 November 1, 2002, was 5,300,098
1
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three and nine month periods
ended September 30, 2002, are attached hereto.
2
UNITED TRADING.COM
(A Development Stage Enterprise)
BALANCE SHEET
ASSETS
------
Sept 30, 2002 Dec. 31, 2001
(Unaudited)
------------ -------------
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . $ - 1,590
Current portion of contacts receivable (Note 2) . - -
Deposits. . . . . . . . . . . . . . . . . . . . . - -
------------ ----------
Total Current Assets . . . . . . . . . . . . . . . . - 1,590
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PROPERTY AND EQUIPMENT
Fixed Assets - -
------------ ----------
Total Property and Equipment . . . . . . . . . - -
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OTHER ASSETS . . . . . . . . . . . . . . . . . . . . - -
------------ ----------
- -
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Total Assets . . . . . . . . . . . . . . . . . $ - 1,590
============ ==========
Liabilities and Shareholder Equity
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . . . . 111,926 55,499
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Total Current Liabilities. . . . . . . . . . . . . . 111,926 55,499
OTHER LIABILITIES. . . . . . . . . . . . . . . . . . - -
------------ ----------
111,926 55,499
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STOCKHOLDERS' EQUITY
Common Stock Par value $0.001 (50,000,000 shares
authorized, 6,500,000,and 5,150,098 issued
and outstanding). . . . . . . . . . . . . . . . 6,500 5,150
Additional Paid-in Capital. . . . . . . . . . . . 1,215,977 1,167,829
Retained Deficit - accumulated during
Development Stage. . . . . . . . . . . . . . . (1,334,403) (1,226,889)
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Total Stockholders' Equity. . . . . . . . . . . . (111,926) (53,909)
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Total Liabilities and
Stockholders' Equity . . . . . . . . . $ - 1,590
============ ==========
See accompanying notes to financial statements
3
UNITED TRADING.COM
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
(Unaudited)
Three months Three Months
Ended Ended
September 30, 2002 September 30, 2001
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REVENUES
Consulting fees. . . . . . . . . . . . . . . $ - $ -
Sales. . . . . . . . . . . . . . . . . . . . - -
Interest Income. . . . . . . . . . . . . . . - -
--------------- ---------------
Total Revenues. . . . . . . . . . . . . . - -
EXPENSES
General and Administrative . . . . . . . . . 30,625 652
--------------- ---------------
Total Expenses. . . . . . . . . . . . . . 30,625 652
--------------- ---------------
Net Pre-Tax Income (Loss) . . . . . . . . . . . $ (30,625) $ (652)
Income Taxes (Note 4). . . . . . . . . . . . - -
--------------- ---------------
Net Income (Loss) After Taxes . . . . . . . . . $ (30,625) $ (652)
=============== ===============
Net Income (loss) per
Common Share, basic and diluted . . . . . . ($0.005) $ (0.000)
=============== ===============
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 . . . . . . . . 5,913,107 5,150,368
=============== ===============
See accompanying notes to financial statements
4
UNITED TRADING.COM
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
(Unaudited)
Inception
Nine months Nine Months December 31, 1994
Ended Ended Thru
Sept 30, 2002 Sept 30, 2001 Sept 30, 2002
--------------- --------------- ---------------
REVENUES
Consulting fees. . . . . . . . . . . . . . . $ - $ - $ 544,894
Sales. . . . . . . . . . . . . . . . . . . . - - 770,000
Interest Income. . . . . . . . . . . . . . . - - 3,764
--------------- --------------- ---------------
Total Revenues. . . . . . . . . . . . . . - - 1,318,658
EXPENSES
General and Administrative . . . . . . . . . 107,514 71,437 1,198,529
Allowance for Uncollectable Debt . . . . . . - - 160,937
Loss from write-down of software . . . . . . - 538,492 538,492
Loss from write-down of notes receivable . . - 406 067 406,067
Depreciation and Amortization. . . . . . . . - 64,792 164,508
Loss from activities of NetBet . . . . . . . - - 184,528
--------------- --------------- ---------------
Total Expenses. . . . . . . . . . . . . . 107,514 1,080,788 2,653,061
--------------- --------------- ---------------
Net Pre-Tax Income (Loss) . . . . . . . . . . . $ (107,514) $ (1,080,788) $ (1,334,403)
Income Taxes (Note 4). . . . . . . . . . . . - 40,000 -
--------------- --------------- ---------------
Net Income (Loss) After Taxes . . . . . . . . . $ (107,514) $ (1,040,788) $ (1,334,403)
=============== =============== ===============
Net Income (loss) per
Common Share, basic and diluted . . . . . . ($0.020) $ (0.202) ($0.662)
=============== =============== ===============
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 . . . . . . . . 5,483,054 5,150,368 2,016,776
=============== =============== ===============
See accompanying notes to financial statements
5
UNITED TRADING.COM
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
(Unaudited)
Inception
Nine Months Nine Months Dec 31, 1994
Ended Ended Thru
Sept 30, 2002 Sept30, 2001 Sept 30, 2002
--------------- --------------- ---------------
OPERATING ACTIVITIES
- ----------------------------------
Net Income (Loss). . . . . . . . . . . . . . . . $ (107,514) $ (1,040,788) $ (1,334,403)
Adjustments to reconcile Net Loss to Cash
provided (used) by operating activities:
Depreciation and Amortization . . . . . . . . - 64,791 140,963
Loss on disposal of office Furniture & Equip. - 10,258 15,972
Loss on write-off of software for license . . - 538,492 538,492
loss on cancellation of notes receivable. . . - 406 067 406,067
Changes in operating assets and liabilities:
Decrease (increase) in Deferred
Offering Costs . . . . . . . . . . . . . . - - -
Increase (decrease) in Accounts Payable . . . 56,427 - 111,926
(Increase) decrease in Receivable from
Software License Sales . . . . . . . . . . - 133,933 (406,067)
Increase (decrease) in Advance License Fees . - (91,300) -
(Increase) decrease in Deposits . . . . . . . - 25,000 -
Increase (decrease) in Deferred Taxes . . . . - (40,000) -
--------------- --------------- ---------------
Net cash provided by Operating Activities. . . . (51,087) 6,453 (527,050)
--------------- --------------- ---------------
INVESTMENT ACTIVAITIES
- --------------------------------------
Decrease (increase) in Property and
Equipment. . . . . . . . . . . . . . . . . - - (36,318)
Decrease (increase) in Software for
License. . . . . . . . . . . . . . . . . . - (27,400) (661,618)
Decrease (increase) in Organization Costs . . - - (1,190)
--------------- --------------- ---------------
Net cash (used) by Investment activities . . . . - (27,400) (699,126)
--------------- --------------- ---------------
FINANCING ACTIVITIES
- ---------------------------------
Disposal of Office Furniture & Equip. . . . . - 3,700 3,700
Increase (decrease) in Common Stock . . . . . 49,497 - 1,222,476
--------------- --------------- ---------------
Net cash provided by Financing Activities. . . . 49,497 3,700 1,226,176
--------------- --------------- ---------------
Increase (decrease) in Cash. . . . . . . . . . . (1,590) (17,247) -
Cash at Beginning of Period. . . . . . . . . . . 1,590 21,975 -
--------------- --------------- ---------------
Cash at End of Period. . . . . . . . . . . . . . $ - $ 4,728 $ -
=============== =============== ===============
See accompanying notes to financial statements
6
UNITED TRADING.COM
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
September 30, 2002
NOTE 1 - Basis of Presentation
------------------------
The accompanying consolidated balance sheet of United Trading.Com (A Development
Stage Company) at September 30, 2002, and the consolidated statements of
operations for the three and nine month periods ended September 30, 2002 and
2001 and the cumulative period during the development stage through September
30, 2002 and the statement of cash flows for three and nine month periods ended
September 30, 2002 and 2001 and the cumulative period during the development
stage through September 30, 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 nine month period ended September 30, 2002, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2002.
NOTE 2 - Contracts Receivable
In 2001, the company cancelled two contacts each for the licensed use of its
casino and sports book software. These contracts were 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. As
of June 30, 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 contracts for license use of the software, and 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 2001. The unamortized balance of expenditures for
the development of the Software for Licensing was written off to expense in 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 half of
2001, $40,000 of the deferred taxes were reversed in 2001.
7
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 three or nine month periods ended
September 30, 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, and to Quick
Draw executing a loan commitment for $1 million. As of September 30, 2002, Quick
Draw has still not been able to obtain a loan commitment as required. United
Trading has worked closely with Quick Draw to obtain such commitment but has
also been unable to develop alternatives for Quick Draw. The funding is believed
necessary by the Company to allow completion of the first phase of Quick Draw's
expansion. In accordance with the acquisition agreement, this funding is to be
completed prior to the finalization of the acquisition of Quick Draw by United
Trading. As of September 30, 2002, ADM Management and Technology, Inc., parent
of Quick Draw continues to operate, and has informed the Company that it will
continue to seek the required funding, or to evaluate alternatives to accomplish
the merger with United Trading.Com. There can be no assurance that required
financing for Quick Draw will be received by Quick Draw or that the acquisition
will ever be completed. The Company has however continued to research other
alternative acquisition/merger candidates and will aggressively pursue such
alternatives in the event the Quick Draw acquisition is not completed, or to
complement the Quick Draw acquisition if completed.
In August, 2002, the Company announced plans to merge with UC HUB, a privately
held California Corporation located in Pasadena, California. However, in
November, the Company announced that the merger plans had been terminated and
that the Company will instead, pursue plans to offer a suite of comprehensive
electronic products to the retail, restaurant and hospitality industries. The
lead innovative electronic transaction product is a unique Cash Advance program
that will fund short-term capital requirements of its credit card processing
clients. The company plans to also market stored value debit cards that will
include but not be limited to, gift cards, payroll cards and merchant credit
card processing. The Company has arranged strategic relationships with some of
the nation's leading electronic processing platforms. The Company plans to
market these items under a new corporate name, Global Links Corp.
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.
8
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES
a) NONE
b) NONE
c) The following is a summary of the information required for all the
sales of unregistered securities by Registrant for the reporting period
January 1, through June 30, 2002.
During the period January 1, to March 31, 2002, there were no sales of the
Company's securities.
During the quarter ended June 30, 2002 450,000 shares of common stock of the
Company were issued at a price of $0.06 per share. All such shares were issued
without registration pursuant to the exemption from registration under Section
4(2)-33 of the Securities Act of 1933. The shares were issued to Ellshay, LLC
(150,000) as compensation for investor relation services, and to BFI Limited
(300,000) to replace shares transferred to Ellshay from BFI in partial
satisfaction of the Company's obligations. The shares issued by the Company to
Ellshay and BFI contain certain restrictive legends as to future sales of the
stock.
During the quarter ended September 30, 2002 899,902 shares of common stock of
the Company were issued at a price of $0.025 per share. All such shares were
issued without registration pursuant to the exemption from registration under
Section 4(2)-33 of the Securities Act of 1933. The shares were issued to James
L. Hancock, a director of the Company (350,000) as compensation for services,
and James G. Brewer, President and Director (549,902) as compensation. The
shares issued by the Company to Mr. Hancock and Mr. Brewer contain certain
restrictive legends as to future sales of the stock.
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: One report on Form 8-K dated August 15, 2002, was
filed during the quarter ended September 30, 2002, reporting an event under Item
5, a letter of intent to merge with UC HUB. No financial statements were filed
as part of the filing.
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: September 14, 2002 By: /James G. Brewer
---------------------------
James G. Brewer, President, CEO, CFO and
Chief Accounting Officer
By:
-----------------------------
James L. Hancock, Chairman
9