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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, 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
------ ------
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:
1,608,734 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
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PART I
Item 1. Financial Statements:
<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
BALANCE SHEET
JULY 31, 1997
(UNAUDITED)
<S> <C>
Assets
Current Assets
Cash and Cash Equivalents $ 994,541
Accounts Receivable 25,742
Prepaid Advertising Expense 5,787
Trading Securities 30,000
-----------
Total Current Assets $1,095,320
Fixed Assets
Furniture & Equipment $24,695
Less: Accumulated Depreciation 6,160
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Fixed Assets - Net 18,535
Other Assets
Organization Costs net of amortization 1,755
Other Investments 616,327
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Total Other Assets 618,082
Total Assets $1,731,937
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 2,315
Taxes Payable 8,363
Deferred Revenue 331,376
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Total Current Liabilities 342,054
Stockholders' Equity
Common Stock, $.001 par value, 50,000,000 shares 1,609
authorized, 1,608,734626 shares issued & outstanding
Paid in Capital 1,445,985
Retained Earnings 13,785
Accumulated Deficit (71,496)
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Total Stockholders' Equity 1,389,883
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Total Liabilities and Stockholders' Equity $1,731,937
========
</TABLE>
See the accompanying notes to the financial statements
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<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED JULY 31, 1997
(UNAUDITED)
THREE THREE NINE NINE
MONTHS MONTHS MONTHS MONTHS
JULY 31, 1997 JULY 31, 1996 JULY 31, 1997 JULY 31, 1996
<S> <C> <C> <C> <C>
Revenue $155,716 $92,666 $467,354 $207,165
Costs and expenses:
General and administrative $74,941 $47,351 $210.315 133,300
--------- --------- --------- ---------
Net Income from operations $80.775 45,315 $257,039 73,865
Other income:
Gain on sale of securities $2,508 $ 8,871 $ 3,696 $27,440
Interest Income 11,768 10,003 32,569 29,079
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14,276 18,874 35,265 56,519
Net income before taxes 95,051 64,189 293,304 130,384
Provision for income taxes 6,600 0 6,600 0
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Net income $88,451 $64,189 $286,704 $130,384
Per share information:
Weighted average number
of common shares
outstanding 1,603,626 1,591,834 1,603,626 1,591,834
------------ ------------- ------------ ----------
Net income per share $0.06 $0.04 $.18 $0.08
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See the accompanying notes to the financial statements
</TABLE>
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<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
STATEMENT OF CASH FLOWS
Six Months Ended July 31, 1997 and 1996
NINE NINE
MONTHS MONTHS
ENDED ENDED
JULY 31, JULY 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net Income $286,704 $130,384
(Increase) Decrease in Accounts Receivable 6,557 (19,792)
Increase in Prepaid Expenses (3,397) -
Decrease in Accounts Payable (856) -
Increase in Deferred Revenue 86,667 147,611
Increase in Taxes Payable 8,363 -
Acquisition of Trading Securities - (59,905)
Acquisition of other investments - (180,000)
Other 1,044 1,636
------------ ------------
387,181 19,934
Cash flows from investing activities:
Increase in Fixed Assets (7,000) (8,278)
Increase in other investments (284,500) -
Net Cash (Used In) investing activities: (291,500) (8,278)
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Cash flows from Financing Activities
Increase in Common Stock 170,000 -
(Increase) in Loan Receivable (12,000) -
(Increase) in Treasury Stock (71,496) -
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Net Cash (Used in), Provided by
Financing Activities 86,504 -
Net increase in cash 182,185 11,656
Cash and Cash Equivalents -
Beginning 812,356 759,777
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Cash and Cash Equivalents
July 31, 1997/1996 994,541 $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, 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 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, 1997, the Company held equity securities with a fair value of
$ 39,250 and a cost of $60,252. The unrealized holding loss for the period
ended July 31, 1997 is shown as a separate component of stockholder's equity.
The Company had sales proceeds of $59,389 from trading securities during the
period ended
July 31, 1997.
<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 $727,309.17 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. 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). 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 nine months ended July 31, 1997 consulting fees were received from
New Horizon Kids Quest ($19,800), American Wagering, Inc. ($19,860), Game
Financial Corporation ($9,000), Vodavi Technology, ($18,000), Europa Cruises
Corporation ($22,900), Royal Casino Group, Inc. ($22,500), Casino Resource
Corporation ($7,500) Casinovations, Inc. ($157,500) and Players Network
($105,000).
During the three months ended July 31, 1997 consulting fees were received
from New Horizon Kids Quest ($6,600), American Wagering, Inc. ($6,600), Game
Financial Corporation ($3,000), Vodavi Technology, ($6,000), Europa Cruises
Corporation ($7,770), Royal Casino Group, Inc. ($7,500), Casino Resource
Corporation ($7,500) Casinovations, Inc. ($37,500) and Players Network
($45,000).
Capital and Source of Liquidity. For the three month period ended July 31,
1997, the Company had an increase in fixed assets of $3,559 and an increase
in other investments of $15,000. As a result, the Company had net cash used
in investing activities of $18,059 for the three months ended July 31, 1997.
For the nine month period ended July 31, 1997, the Company had an increase in
fixed assets of $7,000 and an increase in other investments of $284,500. As
a result, the Company had net cash used in investing activities of $291,500
for the nine months ended July 31, 1997.
For the three and nine month periods ended July 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 July 31, 1997, the Company had an increase
in loan receivable of $30,000 which resulted in net cash used in financing
activities of $30,000.
For the nine months ended July 31, 1997, the Company had an increase in
common stock of $170,000, an increase in loan receivable of $12,000 and an
increase in treasury stock of $71,496 due to the repurchase by the Company of
its common stock. As a result, the Company had net cash provided by
financing activities of $86,504.
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For the year ended October 31, 1996, the Company pursued no financing
activities.
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 had net operating income of $155,716 and $467,354 for the
three and nine months ended July 31, 1997. General and administrative
expenses for the three and nine months ended July 31, 1997 were $74,941
and $210,315, respectively and consisted principally of officer's salaries of
$29,400 and $81,850, respectively, rent of $4,687 and $14,015,
respectively, telephone of $5,273 and $16,216, respectively, printing and
advertising of $9,867 and $24,187, respectively, professional fees of $12,803
and $22,836, respectively and miscellaneous general and administrative
expenses of $12,911 and 51,211, respectively.
For the nine months ended July 31, 1997, the Company had an decrease in
accounts receivable of $6,557. Deferred revenue increased $86,677
from the sale of its newsletter subscriptions and prepaid consulting
revenue. The Company had amortization and depreciation of $1,044 and
$3,133 for the three and nine months ended July 31, 1997. The Company had
an increase in prepaid expenses of $3,397 for the nine months ended July 31,
1997 and a decrease in prepaid expenses of $275 for the three months ended
July 31, 1997 due to increased operations. The Company had a slight
decrease in accounts payable of $2,154 and 856, respectively for the three
and nine months ended July 31, 1997. Net cash provided by operations for the
three and nine months ended July 31, 1997 was $30,895 and $38 7,181,
respectively.
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 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>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: September 8, 1997 /s/ Alan Woinski
------------------ -------------------
Alan Woinski, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JUL-31-1997
<CASH> 994,541
<SECURITIES> 39,250
<RECEIVABLES> 23,742
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,095,320
<PP&E> 24,695
<DEPRECIATION> 6,160
<TOTAL-ASSETS> 1,731,937
<CURRENT-LIABILITIES> 342,054
<BONDS> 0
<COMMON> 1,609
0
0
<OTHER-SE> 1,388,274
<TOTAL-LIABILITY-AND-EQUITY> 1,731,937
<SALES> 467,354
<TOTAL-REVENUES> 508,619
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 133,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 293,304
<INCOME-TAX> 6,600
<INCOME-CONTINUING> 286,704
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 286,704
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
