UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment No. 1
to
FORM 10-QSB
QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2001
Commission File No. 000-29477
PLAYANDWIN, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-039116
(State of organization) (I.R.S. Employer Identification No.)
7050 Weston Rd., Vaughn, Ontario, Canada L4L 8G7
(Address of principal executive offices)
Registrant's telephone number, including area code (905) 850-3940
Check whether the issuer (1) filed all reports required to
be file by Section 13 or 15(d) of the Exchange Act during
the past 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X
As of July 9, 2001, there were 46,751,428 shares of common
stock outstanding
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Playandwin, Inc. And Subsidiaries
(A Development State Company)
Consolidated Balance Sheet - May 31, 2001
(Unaudited)
ASSETS
Current
Cash $ 1,727
Prepaid expenses and other current assets 132,021
------------
133,748
Investment 1,036
Furniture And Equipment, net 12,938
Intellectual Property 39,765
------------
$ 187,487
============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current
Accounts payable and accrued liabilities $ 385,584
Loans payable - stockholders 81,473
Convertible note payable 84,238
Note payable 16,194
Advances from officer 115,073
------------
682,562
------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock - $0.001 par
Class A - 200,000,000 shares authorized;
50,853,109 shares issued and outstanding 50,853
Class B - 9,643,359 shares authorized, issued
and outstanding 9,643
Additional paid-in capital 5,395,250
Accumulated other comprehensive loss (9,242)
Deficit accumulated during the development (5,941,579)
stage
------------
Total Stockholders' Equity (Deficiency) (495,075)
------------
$ 187,487
============
Playandwin, Inc. And Subsidiaries
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
For The Three Total From
Months Ended Inception To
May 31, May 31, May 31,
2001 2000 2001
Revenues $ - $ - $ -
General And Administrative Expenses 170,873 283,691 5,941,579
------------ ----------- -------------
Loss From Operations Before Income Taxes (170,873) (283,691 (5,941,579
Provision For Income Taxes - -
------------ ----------- -------------
Net Loss (170,873) (283,691) (5,941,579)
Other comprehensive Loss, net of tax
Foreign currency translation adjustment 13,490 (1,741) (9,242)
------------ ----------- -------------
Comprehensive Loss $ (157,383) $ (285,432) $ (5,950,821)
============= =========== =============
Loss Per Common share - basic and diluted $ (0.00) $ (0.01)
============= ===========
Weighted Average Number Of Common
Share Outstanding - basic and diluted 50,853,109 29,372,232
============= ===========
Playandwin, Inc. And Subsidiaries
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
For The Three Total From
Months Ended Inception To
May 31, May 31, May 31,
2001 2000 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (170,873) $ (283,891) $ (5,941,579)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization 52,002 62,269 418,277
Write-off of due from related party - - 43,840
Write-off of intellectual property - - 86,620
Common stock issued for services rendered - - 3,006,767
Expense for shares sold below market value - - 402,150
Changes in assets and liabilities
Prepaid expense and other current assets 5,472 - (52,101)
Intellectual property (1,908) - -
Accounts payable and accrued expenses 86,900 (49,645) 385,584
----------- ------------ -------------
Net Cash Used In Operating Activities (28,407) (271,267) (1,650,442)
----------- ------------ -------------
CASH FLOWS FROM INVESTING ACTIVITY
Advances to related company - - (56,944)
Repayments from related company - - 13,104
Investment - - (1,036)
Purchase of intellectual property - - (126,386)
Purchase of furniture and equipment - (5,100) (26,940)
----------- ------------ -------------
Net Cash Used In Investing Activity - (5,100) (198,202)
----------- ------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from note payable - - 16,194
Advances from officer 16,030 - 115,073
Advances from (repayments of) loans
payable, stockholders (98) - 81,473
Proceeds from convertible note payable - - 84,238
Issuance of common stock for cash - 280,625 1,562,635
----------- ------------ -------------
Net Cash Provided By Financing Activities 15,932 280,625 1,859,613
----------- ------------ -------------
CHANGE IN FOREIGN CURRENCY TRANSLATION 13,490 (1,741) (9,242)
ADJUSTMENT
----------- ------------ -------------
NET CHANGE IN CASH 1,015 2,517 1,727
CASH, Beginning of period 712 9,555 -
----------- ------------ -------------
CASH, End of period $ 1,727 $ 12,072 $ 1,727
=========== ============ =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the period for
Interest $ - $ - $ -
=========== ============ =============
Income taxes $ - $ - $ -
=========== ============ =============
Playandwin, Inc. And Subsidiaries
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity
May 31, 2001
(Unaudited)
Deficit
Accumulated Accumulated Total
Common Stock Additional Other During the Stockholders'
Class A Class B Paid-in Comprehensive Development Equity
Shares Amount Shares Amount Capital Loss Stage (Deficiency)
Balance at
February 29, 2001 50,853,109 $ 50,853 9,643,359 $ 9,643 $ 5,395,250 $ (22,732) $(5,770,706) $(337,692)
Foreign currency
translation adjustment - - - - - 13,490 - 13,490
Net loss - - - - - - (170,873) (170,873)
---------- -------- --------- ------- ----------- ---------- ------------ ----------
Balance at May 31, 2001 50,853,109 $ 50,853 9,643,359 $ 9,643 $ 5,395,250 $ (9,242) $(5,941,579) $(495,075)
========== ======== ========= ======= =========== ========== ============ ==========
Playandwin, Inc. And Subsidiaries
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements have
been prepared by Playandwin, Inc. (the "Company") pursuant to the
rules and regulations of the Securities and Exchange Commission.
The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments) which
are, in the opinion of management, necessary to fairly present
the operating results for the respective periods. Certain
information and footnote disclosures normally present in annual
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been omitted
pursuant to such rules and regulations. The results of the three
months ended May 31, 2001 are not necessarily indicative of the
results to be expected for the full year ending February 28,
2002. These financial statements should be read in conjunction
with the financial statements and related footnotes for the year
ended February 28, 2001 included in the annual report filed on
Form 10-KSB for that year.
NOTE 2 - EARNINGS PER SHARE
In 1997, the Financial Accounting Standard Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share." SFAS No. 128 replaced the previously
reported primary and fully diluted earnings per share with basic
and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of
options, warrants, and convertible securities. Diluted earnings
per share is very similar to the previously reported fully
diluted earnings per share. Basic earnings per share is computed
using the weighted-average number of common shares outstanding
during the period. Common equivalent shares are excluded from the
computation if their effect is anti-dilutive.
NOTE 3 - SALE OF SECURITIES
There have been no recent sale of securities since the year end
February 28, 2001.
NOTE 4 - SUBSEQUENT EVENTS
On June 6, 2001, the Company renegotiated its $75,000 loan
payable to a stockholder for the unpaid principal and interest to
be converted into 1,500,000 shares of the Company's common stock
at a rate of $0.05 per share, which is the current market value
based on the closing price for the Company's common stock on the
date of conversion.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
Management's Discussion and Analysis of Financial Condition
General
The following discussion and analysis should be read in
conjunction with the Company's consolidated financial statements
and related footnotes for the year ended February 28, 2001
included in its Annual Report on form 10 - KSB. The discussion of
results, causes and trends will necessarily continue in the
future.
Results Of Operation
For the three months ended May 31, 2001, and the three months
ended May 31, 2000 the Company had no revenue.
The net loss for the three months ended May 31, 2001 was $170,873
compared with a net loss of $283,691 for the three months ended
May 31, 2000. These losses consisted primarily of General and
administrative ("G&A") expenses of $118,871 and $230,865
respectively and amortization expense of $52,000 and $52,826
respectively.
Liquidity And Capital Resources
Historically, the Company has not incurred any revenues. The
current period operating cash flow deficit of approximately
$28,000 was funded primarily by $16,000 received from advances
from officer.
The Company has certain cash requirements to initiate its
business plan. Management has estimated these requirements to be
as follows: i) begin the operations of the Racingo Land Based
operation estimated to be approximately $1,000,000 and ii)
general and administrative costs estimated to be approximately
$250,000. The Company must also arrange for insurance for
guaranteed jackpots. Management has been in discussions with an
insurance carrier and has an estimated costs of $70,000 per $1
million guaranteed.
The Company estimates that the above requirements will be
expended during the fiscal year 2002. The Company has entered
into a "best efforts basis" private placement of its equity
securities with an investment banking firm, Austin Capital
Management to raise the required funds under the commitments. The
Company is also pursuing other opportunities within the gaming
industry for financing alternative for Racingo.
Current Developments
On March 28, 2001, the Company announced the recent endorsement
of the Racingo Rules and Regulations from the Association of
Racing Commissioners International ("RCI"). On May 1, 2001, the
Company announced the final approval of the Racingo Rules and
Regulations by the Association of Racing Commissioners
International.
Subsequent Events
On June 6, 2001, the Company renegotiated its $75,000 loan
payable to a stockholder for the unpaid principal and interest to
be converted into 1,500,000 shares of the Company's common stock
at a rate of $0.05 per share, which is the current market value
based on the closing price for the Company's common stock on the
date of conversion.
On June 25, 2001, the Company announced that it had entered into
an Internet Investor Relations Agreement with Agora International
Enterprises Corp. as well as an Investor Relations contract with
LiquidT, Inc.
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This registration statement contains statements that are forward-
looking statements within the meaning of the federal securities
laws. These include statements about our expectations, beliefs,
intentions or strategies for the future, which we indicate by
words or phrases such as "anticipate," "expect," "intend,"
"plan," "will," "believe" and similar language. These statements
involve known and unknown risks, including those resulting from
economic and market conditions, the regulatory environment in
which we operate, competitive activities, and other business
conditions, and are subject to uncertainties and assumptions set
forth elsewhere in this registration statement. Our actual
results may differ materially from results anticipated in these
forward-looking statements. We base our forward-looking
statements on information currently available to us, and we
assume no obligation to update these statements.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities.
The information required under this Item 2 is incorporated by
reference in its entirety to Note 3 of the financial statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS
3.1a The exhibit, consisting of the Company's Articles of
Incorporation, is attached to the Company's Amended Form 10-
SB, filed on May 31, 2000. This exhibit is incorporated by
reference to that Form.
3.1b The Company's Certificate of Change Pursuant to NRS 78.209
is attached to this Form 10-QSB is hereby incorporated by
referenced to the Form 10-QSB filed on January 22, 2001.
3.2 The exhibits, consisting of the Company's Bylaws, are
attached to the Company's Amended Form 10-SB, filed on May
31, 2000. These exhibits are incorporated by reference to
that Form.
Reports on Form 8-K:
The Company filed a Form 8-K and an Amended Form 8-K on January
22, 2001 and April 23, 2001, respectively, regarding the
Company's change in accountants.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Playandwin, Inc.
By: /s/ Stewart Garner
Stewart Garner,
President/Secretary/Treasurer
Date: July 20, 2001