<PAGE>1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter ended July 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
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Commission file number - 33-98184
GAMING VENTURE CORP., U.S.A.
(Exact name of Registrant as specified in its charter)
NEVADA 22-3378922
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
177 Main Street, Suite 312, Fort Lee, NJ 07024
(Address of principal executive offices) (Zip Code)
(201) 947-4642
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding twelve months (or such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
file such filing requirements for the past thirty days.
Yes x No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
1,591,834 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
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GAMING VENTURE CORP., U.S.A.
PART I: Financial Information
ITEM 1 - Financial statements
ITEM 2 - Management's' discussion and analysis of
financial condition and results of operations
PART II: Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
<PAGE>3
PART I
Item 1. Financial Statements:
<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
BALANCE SHEET
JULY 31, 1996
(UNAUDITED)
<S> <C>
Assets
Current Assets
Cash and Cash Equivalents $ 771,433
Accounts Receivable 24,621
Prepaid Advertising Expense 718
Trading Securities 86,080
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Total Current Assets 882,852
Fixed Assets
Furniture & Equipment 17,696
Less: Accumulated Depreciation 2,629
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Fixed Assets - Net 15,067
Other Assets
Organization Costs net of amortization 2,389
Other Investments 180,000
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Total Other Assets 182,389
Total Assets $1,080,308
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 2,271
Due to Affiliate 515
Deferred Revenue 164,008
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Total Current Liabilities 166,794
Stockholders' Equity
Common Stock, $.001 par value, 50,000,000 shares 1,592
authorized, 1,591,834 shares issued & outstanding
Paid in Capital 1,276,002
Accumulated Deficit (364,080)
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<PAGE>4
Total Stockholders' Equity 913,514
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Total Liabilities and Stockholders' Equity $1,080,308
===========
</TABLE>
See the accompanying notes to the financial statements
<PAGE>5
<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM NOVEMBER 1, 1995
to JULY 31, 1996
(UNAUDITED)
THREE NINE
MONTHS MONTHS
<S> <C> <C>
Revenue $92,666 $207,165
Costs and expenses:
General and administrative 47,351 133,300
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Net Income from operations 45,315 73,865
Other income:
Gain on sale of securities $ 8,871 $27,440
Interest Income 10,003 29,079
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18,874 56,519
Net income before taxes 64,189 130,384
Provision for income taxes 0 0
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Net income $64,189 $130,384
Per share information:
Weighted average number of common
shares outstanding 1,591,834 1,591,834
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Net income per share $0.04 $0.08
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See the accompanying notes to the financial statements
</TABLE>
<PAGE>6
<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM NOVEMBER 1, 1995 to July 31, 1996
(UNAUDITED)
THREE NINE
MONTHS MONTHS
<S> <C> <C>
Cash flows from operating activities:
Net Income $64,189 $130,384
Increase in Accounts Receivable (13,468) (19,792)
Acquisition of Trading Securities (15,348) (59,905)
Acquisition of other investments 0 (180,000)
Other 1,608 1,636
Increase in Deferred Revenue (22,003) 147,611
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14,978 19,934
Cash flows from investing activities:
Acquisition of equipment (8,278) (8,278)
Cash flows from investing activities: 0 0
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Net increase in cash 6,700 11,656
Cash and Cash Equivalents -
Beginning 764,733 759,777
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Cash and Cash Equivalents
July 31, 1996 771,433 $771,433
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Supplement cash flow information:
Cash paid to Income taxes $ 0 $ 0
Interest $ 0 $ 0
</TABLE>
See the accompanying notes to the financial statements.
<PAGE>7
GAMING VENTURE CORP., U.S.A.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JULY 31, 1996
Note. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial information and Article 10 of Regulation S-X. They do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year. The
accompanying financial statements should be read in conjunction with the
Company's audited financial statements for the period ended October 31,
1995 included elsewhere in this Form 10-QSB.
Net income per share
The net income per share is computed by dividing the net income for the
period by the weighted average number of common shares outstanding for
the period.
Note 2. STOCKHOLDERS' EQUITY
During October, 1995 the Company filed a registration statement with the
Securities and Exchange Commission on Form S-1 which was declared
effective on June 4, 1996 which registered 100,000 Class A Warrants,
100,000 Class B Warrants and 1,196,834 shares of common stock
(including the 200,000 common shares underlying the Class A and Class B
Warrants).
Note 3. MARKETABLE SECURITIES
The Company's securities that are bought and held principally for the
purpose of selling them in the near term are classified as trading securities.
Trading securities are recorded at fair value as a current asset with the
change in fair value during the period included in earnings.
At July 31, 1996, the Company held equity securities with a fair value of
$86,080 and a cost of $89,539. The unrealized loss included in earnings
was $3,459 for the period ended July 31, 1996. The Company had sales
proceeds of $8,871 from trading securities during the period ended
July 31, 1996.
<PAGE>8
Note 4. INCOME TAXES
The Company provides for income taxes pursuant to Financial Accounting
Standards Board Statement No. 109 "Accounting for Income Taxes". No
provision for income taxes has been provided for during the period ended
July 31, 1996 because of the operating loss for the period. The Company
may use this operating loss through 2010 to offset future income. The
Company is unable to predict future taxable income that would enable it to
utilize any deferred tax asset and therefore the deferred tax asset of
approximately $160,000 has been fully reserved.
Note 5. CONCENTRATION OF CREDIT RISK
The Company currently has $709,869 on deposit in a money market fund at
a singe broker. The amount of SIPC insurance on this fund is limited to
$100,000.
<PAGE>9
GAMING VENTURE CORP., U.S.A.
PART I (cont.)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations:
Trends and Uncertainties. Inasmuch as a major portion of the
Company's activities is the development and operation of a daily 900
number hotline information service, a daily and a weekly newsletter
regarding the gaming industry and providing consulting services,
the Company's business operations may be adversely affected by
competitors and prolonged recessionary periods.
In addition, the future exercise of any of the outstanding Warrants is
uncertain based on the current financial condition of the Company. The lack
of future exercise of the Class A or Class B Warrants would negatively
impact the Company's ability to successfully expand operations.
During the period ended October 31, 1995 consulting fees were received
from Europa Cruises, Champps Entertainment and Game Financial Corp.
amounted to $12,205, $4,000 and $4,000 respectively. During the nine
months ended July 31, 1996 consulting fees were received from Europa
Cruises ($23,535), Champps Entertainment($4,000), Game Financial
Corp. ($9,000), Royal Casino Group, Inc. ($16,000), Vodavi Technology
($10,000), American Wagering, Inc. ($4,400) and Players Network, Inc.
($60,000). There can be no certainty that this limited number of
consulting service customers will continue to utilize the Company's services
or that the Company can replace or add to these consulting customers.
Capital and Source of Liquidity. The Company signed a lease to
rent 700 square feet of office space through June 30, 2000. The Company
exercised its option to rent an additional six hundred square feet of space
commencing November 1, 1995. Total lease payments per month
increased from $700 per month to $1,500. This may have a negative
impact on the cash flow of the Company. The landlord is Lucky
Management Corp. Other than the lease, the Company has no material
commitments for capital expenditures.
For the period ended October 31, 1995, the Company purchased fixed
assets for $1,920 and incurred organization costs of $3,191. This resulted
in net cash used in investing activities of $5,111 for the period ended
October, 1995.
For the nine month period ended July 31, 1996, the Company had no cash
flow from investing activities.
<PAGE>10
For the period ended October 31, 1995, the Company received $842,151
from the sale of its common stock and received a loan from Mr. Woinski,
an officer, net of a repayment of $515. As a result, the Company had net
cash provided by financing activities of $842,666 for the period ended
October 31, 1995.
For the nine month period ended July 31, 1996 the Company acquired
equipment for $8,278 resulting in net cash used by financing activities of
$8,278.
On a long term basis, liquidity is dependent on increased revenues from
operations, additional infusions of capital and debt financing. The
Company believes that additional capital and debt financing in the short term
will allow the Company to increase its marketing and sales efforts and
thereafter result in increased revenue and greater liquidity in the long term.
However, there can be no assurance that the Company will be able to obtain
additional equity or debt financing in the future, if at all.
Results of Operations. The Company experienced net operating loss of
$488,139 for the period ended October 31, 1995. General and
administrative expenses for the period ended October 31, 1995 were
$531,732 and consisted of principally common stock issued for services of
$427,945 and miscellaneous general and administrative expenses of
$103,787. Depreciation and amortization totaled $794 and $320
respectively for the period ended October 31, 1995. The Company had an
increase in accounts receivable of $4,829, accounts payable of $2,234 due
to commencement of operations. The Company had deferred revenue of
$16,397 from the sale of its newsletter subscriptions and unrealized gain on
trading securities of $2,500 for the period ended October 31, 1995. The
Company also purchased trading securities of $30,000. The material factor
in the large net operating loss of the Company resulted from the issuance of
common stock and options for non-cash consideration of $427,945. Net
cash used in operations for the period ended October 31, 1995 was
$77,778.
The Company had net income of $64,189 for the three months ended July
31, 1996. General and administrative expenses for the three months ended
July 31, 1996 were $47,351 and consisted principally of officer's salaries
of $24,050, rent of $4,607, telephone of $3,422 and miscellaneous general
and administrative expenses of $15,272. The Company had an increase in
accounts receivable of $13,468 due to increased operations. The Company
acquired trading securities for $15,348 to attempt to achieve a greater return
on its money than could be obtained in a bank account. Deferred revenue
increased $22,003 from the sale of its newsletter subscriptions. Net cash
provided by operations for the three months ended July 31, 1996 was
$14,978.
The Company is seeking to lower its operating expenses while expanding
operations and increasing its customer base and operating revenues. The
Company is focusing on decreasing administrative costs. However,
increased marketing expenses will probably occur in future periods as the
Company attempts to further increase its marketing and sales efforts.
<PAGE>11
GAMING VENTURE CORP., U.S.A.
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
None
(b) Reports on Form 8-K
SIGNATURE
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.
Date: /s/ Alan Woinski
------------------------- -------------------------
Alan Woinski, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 771,433
<SECURITIES> 86,080
<RECEIVABLES> 24,621
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 882,852
<PP&E> 17,696
<DEPRECIATION> 2,629
<TOTAL-ASSETS> 1,080,308
<CURRENT-LIABILITIES> 2,271
<BONDS> 0
<COMMON> 1,592
0
0
<OTHER-SE> 1,276,002
<TOTAL-LIABILITY-AND-EQUITY> 1,080,308
<SALES> 207,165
<TOTAL-REVENUES> 263,684
<CGS> 0
<TOTAL-COSTS> 133,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 130,384
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,865
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 130,384
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
</TABLE>
