<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 January 31, 1997
[ ] 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:
1,631,834 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
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<PAGE>2
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.
COMPARATIVE BALANCE SHEET
JANUARY 31
(UNAUDITED)
<S> <C> <C>
1997 1996
Assets
Current Assets
Cash and Cash Equivalents $ 1,012,684 $ 737,545
Accounts Receivable 35,813 2,736
Prepaid Advertising Expense 3,388 1,490
Trading Securities 38,875 77,250
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Total Current Assets 1,090,760 $ 819,021
Fixed Assets
Furniture & Equipment 18,369 9,418
Less: Accumulated Depreciation 4,390 1,264
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Fixed Assets - Net 13,979 8,154
Other Assets
Organization Costs net of amortization 2,073 2,711
Other Investments 330,000 11,562
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Total Other Assets 332,073 14,273
Total Assets $1,436,812 $ 841,448
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 2,474 $ 2,517
DUE TO AFFILIATES 0 515
Deferred Revenue 180,887 34,431
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Total Current Liabilities $183,361 $ 37,463
Stockholders' Equity
Common Stock, $.001 par value, 50,000,000 shares 1,592
1,592
authorized, 1,591,834 AND 1,631,834 shares issued
& outstanding Paid in Capital 1,446,002 1,276,002
Accumulated Deficit (194,143) (473,609)
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Total Stockholders' Equity 1,253,451 809,965
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Total Liabilities and Stockholders' Equity $1,436,812
$841,448
======== ========
</TABLE>
See the accompanying notes to the financial statements
<PAGE>5
<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
COMPARATIVE STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 31,
(UNAUDITED)
1997 1996
<S> <C> <C>
Revenue $134,922 $ 44,657
Costs and expenses:
General and administrative 63,827 39,549
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Net Income from operations 71,095 $ 5,108
Other income:
Interest Income 9,883 10,051
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Net income before taxes 80,978 15,159
Provision for income taxes 0 0
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Net income $80,978 $15,159
Per share information:
Weighted average number of common
shares outstanding 1,599,911 1,591,834
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Net income per share $ 0.05 $ 0.01
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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 THREE MONTHS ENDED JANUARY 31
(UNAUDITED)
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net Income $80,978 $15,159
Dpreciation and Amortization 1,045 630
Increase in Accounts Receivable (3,514) 2,093
Increase in Prepaid Expenses (998) (1,490)
Decrease in Accounts Payable (645) 283
Other (53) 0
Increase in Deferred Revenue (63,812) 18,034
------------ ---------
Net cash provided by (used in) operations $ 13,001 $34,709
Cash flows from investing activities:
Acquisition of equipment 0 0
Acquisition of Trading Securities 0 (45,378)
Acquisition of Other Securities 0 (11,563)
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Net cash provided by (used in)
investing activities $ 0 (56,941)
Cash flows from financing activities:
Decrease in Loan Receivable 18,000 0
Increase in Additional Paid in Capital 170,000 0
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$188,000 $ 0
Net increase in cash 200,328 (22,232)
Cash and Cash equivalents
November 1 812,356 759,777
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Cash and Cash Equivalents
January 31, 1997 1,012,684 $737,545
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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
JANUARY 31, 1997
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 three months ended January 31,
1997 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 January 31, 1997, the Company held equity securities with a fair value of
$ 38,875 and a cost of $ 60,252. The unrealized holding loss for the
period is shown as a separate component of stockholders equity. The Company
had sales proceeds of $0 from trading securities during the period ended
January 31, 1997.
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 $729,275.75 on deposit in a money market fund at
a single 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 year ended October 31, 1996 consulting fees were received from
Hilton Hotels Corporation ($4,625) Europa Cruises ($31,190), Champps
Entertainment ($4,000), Game Financial Corp. ($12,000), Royal Casino
Group,Inc. ($37,000), Vodavi Technology ($16,000), American Wagering, Inc.
($11,145) and New Horizon Kids Quest ($4,400). Comparatively, during the
period from November 1, 1995 to January 31, 1996 consulting fees were received
from Europa Cruises, Champps Entertainment and Game Financial Corp. amounted
to $7,660, $3,000 and $4,000 respectively. There can be no certainty that
this limited number of onsulting service customers will continue to utilize
the Company's services or that the Company can replace or add to these
consulting customers.
During the three months ended January 31, 1997 consulting fees were received
from Europa Cruises ($7,500), Game Financial Corp. ($3,000), Royal Casino Group,
Inc. ($7,500), New Horizon Kids Quest, Inc.($6,600), Vodavia Technology, Inc.
($6,000) American Wagering, Inc. ($6,600). 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 December 31, 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 year ended October 31, 1996, the Company had an increase of a note
receivable of $18,000. The Company advanced an unrelated entity $18,000 in
exchange for a profit sharing arrangement with two of the entity's retail
locations in New York City. The financing was provided interest free for the
months of November and December, 1996 in return for the following profit
participation: On the first $10,000 of net pre-tax cash flows from these
locations, the Company will receive $10,000. On the next $10,000 of net
pre-tax cash flows, the Company will receive $5,000. On the next $10,000 of
net pre-tax cash flows, the Company will receive $4,000. On the fourth
$10,000 of net pre-tax cash flows, the Company will receive $3,000 and on any
net pre-tax cash flows above $40,000, the Company will receive 20% of the
excess. In the event that the profit participation arrangement is in
sufficient to repay the $18,000 investment, it will convert into a loan
arrangement as follows: If the Company has received at least $20,000 of net
pre-tax cash flows, no additional payment will be due. In the event that
less than $20,000 has been received, the Company will permit the borrower
until February 28, 1997 to repay the difference between $15,000 and whatever
payment has been made to the Company from net pre-tax cash. Should repayment
in full not be made by February 28, 1997, the unpaid balance will convert to a
one year term loan with interest at 8.25%.
For the year ended October 31, 1996, the Company received proceeds from the
sale of marketable securities of $54,129 and acquired securities valued at
$56,941. The Company also acquired property and equipment of $8,278. As a
result, the Company had net cash used in investing activities of $29,090 for
the year ended October 31, 1996.
For the three month period ended January 31, 1997, the Company had cash flow
from investing activities of $0.
For the period from November 1, 1995 to January 31, 1996, the Company had no
cash flow from investing activities.
For the year ended October 31, 1996, the Company pursued no financing
activities.
For the three month period ended January 31, 1997, the Company had a
decrease in loan receivable of $18,000 and received additional paid in capital
of $170,000 resulting in cash flows from financing activities of $188,000
For the period from November 1, 1995 to January 31, 1996 the Company had no
cash flow from financing activities.
Results of Operations. The Company had net operating income of $170,152 for
the year ended October 31, 1996. General and administrative expenses
for the year ended October 31, 1996 were $186,375 and consisted principally of
officer's salaries of $92,750, rent of $18,312, telephone of $13,556 and
miscellaneous general and administrative expenses of $61,757. The Company
had an increase in accounts receivable of $27,470 due to increased
operations. Deferred revenue increased $228,302 from the sale of its
newsletter subscriptions and prepaid consulting revenue. The Company acquired
common stock and options as
non-cash consideration valued at $330,000 as partial payment of its consulting
services. The Company realized gain on the sale of securities of $27,440 and
had amortization and depreciation of $638 and $2,711 for the year ended
October 31, 1996. The Company had an increase in prepaid expenses of $2,390
due to increased operations and had a slight increase in accounts payable of
$422. Net cash provided by operations for the year ended October 31, 1996
was $81,669.
The Company had net income of $80,978 for the three months ended January
31, 1997. General and administrative expenses for the three months ended
January 31, 1997 were $63,827 and consisted principally of officer's salaries
of $29,250, rent of $4,672, telephone of $5,930, printing press releases and
advertising of $4,501, professional fees of $3,375 and miscellaneous general
and administrative expenses of $16,099. The Company had an increase in
accounts receivable of $3,514 due to increased operations. Deferred revenue
decreased $63,812. Net cash provided by operations for the three months ended
January 31, 1997 was $13,001.
The Company had net income of $14,530 for the period from November 1, 1995 to
January 31, 1996. General and administrative expenses for the period from
November 1, 1995 to January 31, 1996 were $39,549 and consisted principally of
officer's salaries of $22,100, rent of $4,649 and miscellaneous general and
administrative expenses of $12,800. The Company acquired trading securities
for $45,378 to attempt to achieve a greater return on its money than could be
obtained in a bank account. Deferred revenue increased $18,034 from the sale
of its newsletter subscriptions. Additionally, the Company purchased
furniture and office equipment valued at $9,418. Net cash used in operations
for the period from November 1, 1995 to January 31, 1996 was $22,232.
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> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 1,012,684
<SECURITIES> 38,875
<RECEIVABLES> 35,813
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,090,760
<PP&E> 18,369
<DEPRECIATION> 4,390
<TOTAL-ASSETS> 1,436,812
<CURRENT-LIABILITIES> 183,361
<BONDS> 0
<COMMON> 1,592
0
0
<OTHER-SE> 1,251,859
<TOTAL-LIABILITY-AND-EQUITY> 1,436,812
<SALES> 29,416
<TOTAL-REVENUES> 134,922
<CGS> 0
<TOTAL-COSTS> 63,827
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 80,978
<INCOME-TAX> 0
<INCOME-CONTINUING> 80,978
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,978
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
