UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: SEPTEMBER 30, 2001
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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649.COM, INC.
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(Exact name of small business issuer as specified in its charter)
Texas 0-30381 760495640
- -------------------------------- ----------------- -------------------------
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification No.)
Suite 212, 1166 Alberni Street V6E 3Z3
Vancouver, British Columbia, Canada
- ------------------------------------------ ----------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (604) 648-2090
(including area code)
----
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(Former name, former address and former (Zip Code)
fiscal year, if changed since last report)
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Page 1
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 [_]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Not applicable.
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. 18,520,650 COMMON SHARES AS AT
SEPTEMBER 30, 2001.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
Yes [_] No [X]
(Check one)
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Page 2
649.COM INC.
(A Development Stage Company)
FORM 10-QSB
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Operations. . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Cash Flows. . . . . . . . . . . . . . . . . F-6
Notes to the Consolidated Financial Statements . . . . . . . . . . . . F-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. . 13
ITEM 3. CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . 16
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 16
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . . 16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . 16
ITEM 5. OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . 16
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Page 3
649.com, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
(U.S. Dollars)
=========================================================================================================
September 30, December 31,
2001 2000
(unaudited) (audited)
$ $
- ---------------------------------------------------------------------------------------------------------
ASSETS
Current Assets
Cash 68 39
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Total Assets 68 39
=========================================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable 53,910 50,741
Accrued liabilities 3,500 2,000
Due to stockholders (Note 4) 501,800 492,879
- ---------------------------------------------------------------------------------------------------------
Total Current Liabilities 559,210 545,620
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Stockholders' Deficit
Common Stock: 100,000,000 common shares authorized with a par
value of $0.001; 18,520,650 and 18,020,650 shares issued and
outstanding respectively 18,521 18,021
Preferred stock, 5,000,000 shares authorized with a par value of $0.001 - -
Additional paid-in capital 1,460,957 1,436,457
Donated capital (Note 4) 124,195 67,774
Deficit Accumulated During the Development Stage (2,162,815) (2,067,833)
- ---------------------------------------------------------------------------------------------------------
Total Stockholders' Deficit (559,142) (545,581)
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Total Liabilities and Stockholders' Deficit 68 39
=========================================================================================================
The accompanying notes are an integral part of these financial statements.
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Page F-4
649.com, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(U.S. Dollars)
(unaudited)
=======================================================================================================================
Accumulated from
June 13, 1990
Three Months Ended Nine Months Ended (Date of Inception)
September 30, September 30, to September 30,
2001 2000 2001 2000 2001
$ $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Revenue - - - - 45,500
- -----------------------------------------------------------------------------------------------------------------------
Expenses
Accounts payable written-off - - - (46,622) (46,622)
Depreciation and amortization - - - - 4,111
Equipment and software written-off - - - 58,026 54,188
General and administrative 1,906 15,906 10,461 174,843 484,171
Imputed interest 18,932 18,244 56,421 49,507 124,195
Prepaid expenses written-off - - - 35,000 36,000
Research and development - (507) 28,100 42,086 117,450
Stock-based compensation - - - - 1,434,822
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Total Expenses 20,838 33,643 94,982 312,840 2,208,315
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Net Loss for the Period (20,838) (33,643) (94,982) (312,840) (2,162,815)
=======================================================================================================================
Basic loss per share - - (0.01) (0.02)
=======================================================================================================================
Weighted average number of
common shares outstanding 18,521,000 18,521,000 18,493,000 17,906,000
=======================================================================================================================
(Diluted loss per share has not been presented as the result is anti-dilutive)
The accompanying notes are an integral part of these financial statements.
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Page F-5
649.com, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(U.S. Dollars)
(unaudited)
====================================================================================
Nine Months Ended
September 30,
2001 2000
$ $
- ------------------------------------------------------------------------------------
Cash Flows Used In Operating Activities
Net loss (94,982) (312,840)
Adjustments to reconcile net loss to cash
Imputed interest 56,421 49,507
Shares issued for domain name 25,000 -
Assets written-off - 58,026
Prepaid expenses written-off - 35,000
Accounts payable - (46,622)
Changes in non-cash working capital items
Increase in accounts payable and accrued liabilities 4,669 48,588
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Net Cash Used In Operating Activities (8,892) (168,341)
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Cash Flows From Financing Activities
Advances 8,921 161,292
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Net Cash Provided By Financing Activities 8,921 161,292
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Increase (Decrease) in Cash 29 (7,049)
Cash - Beginning of Period 39 7,227
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Cash - End of Period 68 178
====================================================================================
Non-Cash Financing and Investing Activities
Shares issued for domain name 25,000 -
====================================================================================
Supplemental Disclosures
Interest paid - -
Income taxes paid - -
====================================================================================
The accompanying notes are an integral part of these financial statements.
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Page F-6
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 4). No
amount was recorded for the issuance of shares.
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
United States generally accepted accounting principles, 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
September 30, 2001, the Company has not recognized any revenue, has a
working capital deficit of $559,142, and has accumulated operating losses
of $2,162,815 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 conditions 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. Recapitalization
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 4). No
amount was recorded for the issuance of shares.
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 are 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 and the Company's net
liabilities of $120,383 were assumed. 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.
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Page F-7
649.com, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
3. Significant Accounting Principles
a) Basis of Accounting
These consolidated financial statements have been prepared in
accordance with United States generally accepted accounting principles
and are expressed in United States dollars.
b) Consolidation
These consolidated financial statements include the accounts of the
Company and its wholly-owned Canadian subsidiary, 649.com, Inc.
c) Year End
The Company's fiscal year end is December 31.
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 Exchange
The wholly-owned operating subsidiary is domiciled in Canada and
primarily uses the Canadian dollar as its currency.
Transactions undertaken in Canadian dollars are translated to US
dollars using the exchange rate in effect as of the transaction date.
Monetary assets and liabilities denominated in Canadian dollars are
then translated to US dollars using the period end rate. Any exchange
gains and losses are included in operations.
f) Use of Estimates
The preparation of financial statements in conformity with United
States generally accepted accounting principles 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 management's best estimates as additional
information becomes available in the future.
g) Revenue Recognition
Revenue will be recognized when the game has been completed and will
be recorded net of payments.
h) Long-Lived Assets
Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate
the carrying amount of an asset may not be recoverable. For the
purposes of evaluating potential impairment, the Company's assets are
grouped by the entity to which they relate. Since adopting this
statement, the Company gives consideration to events or changes in
circumstances for each of its entities. To date, management has not
noted any evidence of impairment, and no related charges have been
recognized by the Company.
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Page F-8
649.com, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
3. Significant Accounting Principles (continued)
i) 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 September 30, 2001.
j) 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.
k) 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 excludes all dilutive potential common shares if
their effect is anti-dilutive.
l) Comprehensive Income
In June 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 130, "Reporting Comprehensive Income". This statement
establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in an
entity's financial statements. This statement requires an entity to
classify items of other comprehensive income by their nature in a
financial statement and display the accumulated balance of other
comprehensive income separately from retained earnings and additional
paid-in-capital, in the equity section of a statement of financial
position. The Company had no items of other comprehensive income
(loss) during each of the periods presented in the accompanying
financial statements.
m) Financial Instruments
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.
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Page F-9
649.com, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
3. Significant Accounting Principles (continued)
n) New Accounting Pronouncements
In June 2001, SFAS No. 141, "Business Combinations," was approved by
the Financial Accounting Standards Board ("FASB"). SFAS No. 141
requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. Goodwill and
certain intangible assets will remain on the balance sheet and not be
amortized. On an annual basis, and when there is reason to suspect
that their values have been diminished or impaired, these assets must
be tested for impairment, and write-downs may be necessary. The
Company implemented SFAS No. 141 on July 1, 2001 and its impact is not
expected to be material on its financial position or results of
operations.
In June 2001, SFAS No. 142, "Goodwill and Other Intangible Assets,"
was approved by FASB. SFAS No. 142 changes the accounting for goodwill
from an amortization method to an impairment-only approach. SFAS No.
142 is effective for fiscal years beginning after December 15, 2001.
Amortization of goodwill, including goodwill recorded in past business
combinations, will cease upon adoption of this statement. The Company
adopted SFAS No. 142 on January 1, 2002 and its impact is not expected
to have a material effect on its financial position or results of
operations.
In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligation." SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002, and will require companies to record a
liability for asset retirement obligations in the period in which they
are incurred, which typically could be upon completion or shortly
thereafter. The FASB decided to limit the scope to legal obligations
and the liability will be recorded at fair value. The effect of
adoption of this standard on the Company's results of operations and
financial position is being evaluated.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 is
effective for fiscal years beginning after December 15, 2001. It
provides a single accounting model for long-lived assets to be
disposed of and replaces SFAS No. 121 "Accounting for the Impairment
of Long-Lived Assets and Long-Lived Assets to Be Disposed Of." The
Company adopted SFAS No. 144 on January 1, 2002. The effect of
adoption of this standard on the Company's results of operations and
financial position is not expected to be material.
o) 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.
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Page F-10
649.com, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
4. Related Party Transactions/Balances
The Company made advances to, and received advances from, its largest
stockholder, Bay Cove Investments Limited ("Bay Cove"). Nor formal
arrangement exists for such advances, which have historically been made or
received on an "as-needed" basis. As a result, the Company owes net
advances of $502,558 at September 30, 2001 (2000: $480,631). Such amount
was not collateralized, did not bear interest, and had no stated repayment
terms. Imputed interest of $55,494 at September 30, 2001 (2000: $48,580)
was charged to operations and treated as donated capital.
During the years ended December 31, 1999 and 1998, the Company received
legal services from Intrepid International, Ltd. ("Intrepid"), a
significant stockholder of the Company. As of September 30, 2001, the
Company owes this stockholder $8,242 (2000 - $8,242). During the nine
months ended September 30, 2001 imputed interest of $927 (2000: $927) was
charged to operations and treated as donated capital.
5. 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 September 30, 2001 and December 31, 2000
there were 750,000 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-employees 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 weighted average number of shares under option and option price is as
follows:
Weighted Weighted
Shares Average Average
Under Option Remaining Life
Option Price of Options
# $(Months)
Beginning balance - December 31, 2000 750,000 0.50 7
(audited)
Granted -
Exercised -
Cancelled -
Lapsed (750,000) (7)
---------
Ending balance - September 30, 2001 - - -
(unaudited)
========= ======== ================
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Page F-11
649.com, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(unaudited)
5. Common Stock (continued)
If compensation expense had been determined pursuant to SFAS 123, the
Company's net loss and net loss per share would have been as follows:
September 30, December 31,
2001 2000
$ $
(unaudited) (audited)
Net loss
As reported (94,982) (341,959)
Pro forma (188,490) (502,259)
Basic net loss per share
As reported (0.01) (0.02)
Pro forma (0.01) (0.03)
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Page F-12
649.COM INC. (SIXN.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 fee 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.
On January 12th 2001, a resolution was passed by the Board of Directors
authorizing the purchase of the domain name "abetGaming.com" for the purchase
price of $25,000. The President of the Corporation was given the authority to
take the necessary steps to affect this purchase.
On March 7th 2001, 500,000 common shares of 649.com's common stock were issued
as payment for the domain name "abetGaming.com". The total purchase price of
$25,000 was paid with stock valued at the market price of $0.05. This stock was
restricted under Rule 144.
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS 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 $2,162,815 and has a working capital
deficit of $559,142. 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
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Page 13
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.
We expect to continue to incur substantial losses in our efforts to establish a
new business. Since inception, we have funded operations through common stock
issuances and related party loans in order to meet our strategic objectives. We
believe that the Company will be able to arrange additional financing to
maintain start-up operations over the next 12 months. However, there can be no
assurance that we will be able to obtain sufficient funds to continue with our
efforts to establish a new business. As a result of the foregoing, there exists
substantial doubt about our ability to continue as a going concern. The interim
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
RESULTS OF CONTINUING OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2001 ("2001") COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2000 ("2000"):
The Company has no revenue for 2001 and 2000. Expenses decreased by $217,858 to
$94,982 in 2001 as compared to $312,840 in 2000. There were no prepaid expenses
written off in 2001 as compared to $35,000 in 2000 nor were there any accounts
payable written off in 2001 as compared to $46,622 in 2000. There was no
equipment and software written off in 2001 as compared to $58,026 in 2000.
General and administrative expenses decreased by $164,382 and research and
development decreased by $13,986.
The net loss for 2001 was $94,982 as compared to $312,840 in 2000. Our net loss
per share was $(0.01) compared to $(0.02) for the nine month period ended
September 30, 2001 and 2000, respectively.
FINANCIAL CONDITION AND LIQUIDITY
At September 30, 2001 the Company had cash and cash equivalents totaling $68
compared to $39 at December 31, 2000.
Net cash used in operating activities of $8,892 was used during the nine months
ended September 30 2001 compared to $168,341 during the same period in 2000.
At September 30, 2001 the Company had advances of $8,921 compared to advances of
$161,292 at September 30 2000. The Company receives advances from its' largest
stockholder, Bay Cove Investments Limited on an "as needed" basis. There is no
formal arrangement for these advances.
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
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Page 14
and operation of our disclosure controls and procedures pursuant to Exchange Act
Rule 13a-15. 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 September 30 2001.
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.
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Page 15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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.
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/ Cary Martin Date: July 22, 2005
- ------------------------------
Cary Martin
Director / President and
Corporate Secretary
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/ Cary Martin Date: July 22, 2005
- ------------------------------
Cary Martin
Director / President and
Corporate Secretary
- --------------------------------------------------------------------------------
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