<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 April 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
---------- ----------
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
------ ------
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>3
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>4
PART I
Item 1. Financial Statements:
<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
COMPARATIVE BALANCE SHEET
APRIL 30
(UNAUDITED)
<S> <C> <C>
1997 1996
Assets
Current Assets
Cash and Cash Equivalents $ 1,011,705 $ 764,733
Accounts Receivable 15,048 11,153
Prepaid Advertising Expense 6,062 1,118
Trading Securities 27,000 89,275
----------- ----------
Total Current Assets 1,059,815 $ 866,279
Fixed Assets
Furniture & Equipment 21,136 9,417
Less: Accumulated Depreciation 5,275 1,736
---------- ----------
Fixed Assets - Net 15,861 7,681
Other Assets
Organization Costs net of amortization 1,914 2,551
Other Investments 600,000 180,000
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Total Other Assets 601,914 182,551
Total Assets $1,677,590 $ 1,056,511
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 9,496 $ 2,390
DUE TO AFFILIATES 0 515
Deferred Revenue 380,739 186,011
---------- --------
Total Current Liabilities $390,739 $ 188,916
Stockholders' Equity
Common Stock, $.001 par value, 50,000,000 shares 1,592 1,592
authorized, 1,631,834 AND 1,591,834 shares issued
& outstanding Paid in Capital 1,446,002 1,276,002
Accumulated Deficit (88,743) (409,999)
Treasury Stock (71,496) 0
----------- ---------
Total Stockholders' Equity 1,287,355 867,595
------------- ---------
Total Liabilities and Stockholders' Equity $1,677,590 $1,056,511
======== ========
</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 and SIX MONTHS ENDED APRIL 30,
(UNAUDITED)
1997 1996
THREE SIX THREE SIX
MONTHS MONTHS MONTHS MONTHS
<S> <C> <C> <C> <C>
Revenue $ 176,716 $ 311,638 $ 69,842 $ 114,499
Costs and expenses:
General and administrative 71,547 135,374 46,400 85,949
--------- --------- --------- ---------
Net Income from operations $ 105,169 $176,264 23,442 $ 28,550
Other income:
Gain on Sale of Securities 1,188 1,188 18,569 18,569
Interest Income 10,918 20,801 9,025 19,076
--------- --------- --------- ---------
117,275 198,253 51,036 66,195
Provision for income taxes 0 0 0 0
--------- --------- --------- ---------
Net income $ 117,275 $ 198,253 $ 51,036 $ 66,195
Per share information:
Weighted average number of common
shares outstanding 1,602,234 1,593,734 1,591,834 1,591,834
---------- --------- --------- ---------
Net income per share $ 0.07 $ 0.12 $ 0.04 $ 0.05
--------- --------- --------- ---------
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 SIX MONTHS ENDED APRIL 30
(UNAUDITED)
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net Income $198,253 $66,195
Depreciation and Amortization 2,089 1,261
Increase (Decrease) in Accounts Receivable 17,251 (6,324)
Increase (Decrease) in Prepaid Expenses (3,672) (1,118)
Decrease in Accounts Payable 6,324 155
Decrease in Deferred Revenue 136,040 169,615
------------ ---------
Net cash provided by (used in) operations $ 356,285 $224,828
Cash flows from investing activities:
Acquisition of equipment (3,440) 0
Acquisition of Trading Securities 0 (44,828)
Acquisition of Other Securities (270,000) (180,000)
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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 Treasury Stock (71,496) 0
Increase in Additional Paid in Capital 170,000 0
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$116,504 $ 0
Net increase in cash $199,349 $4,956
Cash and Cash equivalents
November 1 812,356 759,777
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Cash and Cash Equivalents
April 1, 1997 1,011,705 $764,733
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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
April 30, 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.
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 April 30, 1997, the Company held equity securities with a fair value of
$27,000 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 April 30,
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
April 30, 1997 because of the tax loss carryforward. The Company may use
this tax loss carryforward 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 $738,648.88 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>8
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. On
On May 29, 1997, the Company extended the expiration of the Class A and Class
B Warrants to June of 1999. 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 consulting service customers will
continue to utilize the Company's services or that the Company can replace
or add to these consulting customers.
During the six months ended April 30, 1997 consulting fees were received from
Casinovations ($120,000), Players Network ($60,000), Royal Casino Group, Inc.
($15,000) Game Financial Corp. ($6,000), New Horizon Kids Quest, Inc.
($13,200), Vodavia Technology, Inc. ($12,000) American Wagering, Inc.
($13,260) and Europa Cruises Corporation ($15,130). 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.
During the three months ended April 30, 1997 consulting fees were received
from Casinovations ($82,500), Players Network ($30,000), Royal Casino Group,
Inc. ($7,500) Game Financial Corp. ($3,000), New Horizon Kids Quest, Inc.
($6,600), Vodavia Technology, Inc. ($6,000) American Wagering, Inc. ($6,600)
and Europa Cruises Corporation ($7,630). 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. The note was repaid in full in
the first quarter of 1997.
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 six month period ended April 30, 1997, the Company acquired equipment
valued at $3,440 and acquired other securities valued at $270,000. For the
sixth month period ended April 30, 1997, Company had cash flow from investing
activities of $273,440.
<PAGE>9
For the six month period ended April 30, 1996, the Company acquired trading
securities valued at $44,828 and other securities of $270,000. For the
sixth month period ended April 30, 1997, Company had cash flow from investing
activities of $224,828.
For the year ended October 31, 1996, the Company pursued no financing
activities.
For the six month period ended April 30, 1997, the Company repurchased 23,100
shares at an average price of $3.09. Total cash used for the share
repurchase was $71,436. The Board of Directors of the Company authorized
$200,000 to be allocated for the share repurchase. The Company intends to
repurchase additional shares as market conditions allow. The 23,100 shares
are currently held as Treasury Stock and it is anticipated that the shares
will be retired. For the six month period ended April 30, 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
$116,504.
For the six month period ended April 30, 1996, the Company pursued no
financing activities.
Results of Operations. The Company had net income of $198,253 for the six
months ended April 30, 1997. General and administrative expenses for the
six months ended April 30, 1997 were $135,374 and consisted principally of
officer's salaries of $52,450, rent of $9,328, telephone of $10,943, printing
press releases and advertising of $14,320, professional fees of $10,033,
travel and entertainment of $11,066 and miscellaneous general and
administrative expenses of $27,234. The Company had an increase in accounts
receivable of 17,251 due to increased operations. Deferred revenue
increased $136,040 due to the contracts with Casinovations, Inc. and Players
Network, Inc.. Net cash provided by operations for the six months ended
April 30, 1997 was $356,285.
The Company had net income of $117,275 for the three months ended April 30,
1997. General and administrative expenses for the three months ended April
30, 1997 were $71,547 and consisted principally of officer's salaries of
$23,200, rent of $4,656, telephone of $5,013 printing press releases and
advertising of $9,819, professional fees of $6,658, travel and entertainment
of $7,931 and miscellaneous general and administrative expenses of $14,270.
The Company had an increase in accounts receivable of $20,765 due to
increased operations. Deferred revenue increased $199,852. Net cash
provided by operations for the three months ended April 30, 1997 was
$343,284.
The Company had net income of $66,195 for the six months ended April 30,
1996. General and administrative expenses for the six months ended April
30, 1996 were $85,949 and consisted principally of officer's salaries of
$44,650, rent of $9,267, telephone of $6,303, printing press releases and
advertising of $3,995, professional fees of $5,275, travel and entertainment
of $2,071 and miscellaneous general and administrative expenses of $14,388.
The Company had a decrease in accounts receivable of 6,324. Deferred revenue
increased $169,615. Net cash provided by operations for the six months ended
April 30, 1996 was $229,784.
The Company had net income of $51,036 for the three months ended April 30,
1996. General and administrative expenses for the three months ended April
30, 1996 were $46,400 and consisted principally of officer's salaries of
$22,550, rent of $4,618, telephone of $3,965, printing press releases and
advertising of $3,042, professional fees of $3,635, travel and entertainment
of $268 and miscellaneous general and administrative expenses of $14,388.
The Company had a decrease in accounts receivable of 8,322. Deferred
revenue increased $151,580. Net cash provided by operations for the three
months ended April 30, 1996 was $195,626.
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 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>10
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: June 11. 1997 /s/ Alan Woinski
-------------------------------------
Alan Woinski, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> APR-30-1997
<CASH> 1,011,705
<SECURITIES> 27,000
<RECEIVABLES> 15,048
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,059,815
<PP&E> 21,136
<DEPRECIATION> 5,275
<TOTAL-ASSETS> 1,677,590
<CURRENT-LIABILITIES> 390,235
<BONDS> 0
<COMMON> 1,592
0
0
<OTHER-SE> 1,287,355
<TOTAL-LIABILITY-AND-EQUITY> 1,677,590
<SALES> 311,638
<TOTAL-REVENUES> 311,638
<CGS> 0
<TOTAL-COSTS> 135,374
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 198,253
<INCOME-TAX> 0
<INCOME-CONTINUING> 198,253
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 198,253
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
