SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only [as permitted by Rule
14a-6(e)(2)]
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GAMING VENTURE CORP., U.S.A..
(name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>2
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
GAMING VENTURE CORP., U.S.A (the "Company")
Alan R. Woinski is hereby authorized to represent and to vote the shares of
the undersigned in the Company at an Annual Meeting (hereinafter referred to
as "Annual Meeting") of Stockholders to be held on March 25, 1998 and at any
adjournment as if the undersigned were present and voting at the meeting.
NOTE: Cumulative voting for directors is not allowed.
1. Proposed Acquisition of Casino Journal Publishing Co.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Approval of the name change of the Company to Casino Journal Publishing
Group, Inc.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Election of Directors
FOR all nominees (except as written on the line below) [ ]
WITHHOLD AUTHORITY TO VOTE
for all nominees listed below [ ]
NOMINEES: Alan Woinski, Kim Santangelo-Woinski, Glenn Fine, Adam
Fine, Roger Gros, Lisa Robertson.
(INSTRUCTIONS: To withhold authority to vote for any individual nominees
write the nominee's name on the line below.)
-------------------------------------------------
4. Approval of Friedman, Alpren and Green LLP as Independent
Certified Accountants for fiscal year ending October 31, 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Approval of the increase in Common Shares reserved for the Company's
stock option plan from 750,000 Common Shares to 1,200,000 Common Shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. In their discretion, on any other business that may properly come
before the meeting.
The shares represented hereby will be voted. With respect to items 1 - 5
above, the shares will be voted in accordance with the specifications made
and where no specifications are given, said proxies will vote for the
proposals. This proxy may be exercised by a majority of those proxies or
their substitutes who attend the meeting.
Please sign and date and return to Gaming Venture Corp., U.S.A,
177 Main Street, Suite 312, Fort Lee, NJ 07024
Dated February 28, 1998
----------------------
Signature
----------------------
Signature
Joint Owners should each sign. Attorneys-in-fact, executors, administrators,
trustees, guardians or corporation officers, should give full title.
<PAGE>3
GAMING VENTURE CORP., U.S.A
177 Main Street
Suite 312
Telephone: (201) 947-4642
Facsimile: (201) 585-5217
February 28, 1998
To the Stockholders of
Gaming Venture Corp., U.S.A
You are cordially invited to attend an Annual Meeting (hereinafter referred
to as "Annual Meeting") of Stockholders of Gaming Venture Corp., U.S.A (the
"Company"), to be held on Wednsday, March 25, 1998 at The Sands Expo Center,
201 East Sands Avenue, Las Vegas, Nevda 89109, Room 202, at 1:00 P.M.,
Pacific time, to consider and vote upon the matters set forth in the
accompanying Notice of Annual Meeting of Stockholders.
In addition to the election of directors and the approval of independent
certified public accountants for the fiscal year ended October 31, 1998,
Shareholders will be asked to approve the proposed acquisition of Casino
Journal Publishing Company along with a name change. This acquisition will
result in a change of control of the Company with an initial issuance of an
additional 3,000,000 Common Shares to owners of Casino Jounral Publishing
company. Approval of the proposals would allow the Company to move forward
with its new business plan and would be economically beneficial to the
Company. Shareholders will be asked to approve an increase in the amount of
Common Shares reserved for the Company's stock option plan. Approval of the
increase in Common Shares would be economically beneficial to the Company.
The Company would be able to partially compensate eligible participants in a
non-monetary manner with the 1996 Non-Statutory Stock Option Plan.
Since it is important that your shares be represented at the meeting whether
or not you plan to attend in person, please indicate on the enclosed proxy
your decisions about how you wish to vote and sign, date and return the proxy
promptly in the envelope provided. If you find it possible to attend the
meeting and wish to vote in person, you may withdraw your proxy at that time.
Your vote is important, regardless of the number of shares you own.
Sincerely,
- -------------------------
Alan R. Woinski
Chairman of the Board of Directors
Chief Executive Officer
<PAGE>4
GAMING VENTURE CORP., U.S.A
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
To Be Held
March 25, 1998
To the Stockholders of
Gaming Venture Corp., U.S.A
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of Gaming
Venture Corp. U.S.A. (the "Company") will be held on March 25, 1998 at 3:00
o'clock in the afternoon, local time at the for the following purposes; all
as more specifically set forth in the attached Proxy Statement.
1. To consider and vote upon the proposal to acquire Casino Journal
Publishing Group.
2. Approval of the name change of the Company to Casino Journal Publishing
Group, Inc.
3. To consider and vote upon the election of the Officers and Directors
of the Company.
4. Approval of Friedman, Alpren and Green LLP as Independent
Certified Accountants for fiscal year ending October 31, 1998.
5. Approval of the increase in Common Shares reserved for the Company's
stock option plan from 750,000 Common Shares to 1,200,000 Common Shares.
6. To transact such other business as may properly be brought before this
meeting.
Only holders of record of Common Stock of the Corporation as of the close of
business on February 27, 1998, are entitled to notice of or to vote at the
meeting or any adjournment thereof. The stock transfer books of the
Corporation will not be closed.
Stockholders are encouraged to attend the meeting in person. To ensure that
your shares will be represented, we urge you to vote, date, sign and mail the
Proxy Card in the envelope which is provided, whether or not you expect to be
present at the meeting. The prompt return of your Proxy Card will be
appreciated. It will also save the Company the expense of a reminder
mailing. The giving of such Proxy will not affect your right to revoke such
Proxy by appropriate written notice or to vote in person should you later
decide to attend the meeting.
By order of the Board of Directors
Alan R. Woinski
February 28, 1998 Chairman of the Board of Directors
Chief Executive Officers
<PAGE>5
PROXY STATEMENT
GAMING VENTURE CORP., U.S.A
ANNUAL MEETING OF STOCKHOLDERS
To Be Held March 25, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Gaming Venture Corp., U.S.A, a Nevada
corporation (the "Company"), to be voted at an Annual Meeting of Stockholders
of the Company to be held on Wednesday, March 25, 1998 at 1:00 P.M., Pacific
time, at The Sands Expo Center, 201 East Sands Avenue, Las Vegas, Nevada
89109, Room 202 and at any adjournment thereof (the "Meeting"). The Proxy
may be revoked by appropriate written notice at any time before it is
exercised. See, "Voting and Solicitation of Proxies".
This Proxy Statement and the accompanying Notice and Form of Proxy are being
mailed on or about March 15, 1998 to record holders of the Company's Common
Stock as of February 27, 1998 (the "Record Date").
As of Record Date, 1,616,734 shares of Common Stock of the Corporation were
issued and outstanding. Each share of Common Stock entitles the holder to
one vote on all matters brought before the Annual Meeting.
The Company was incorporated in Nevada on June 1, 1995. The Company is
authorized to issue Fifty Million (50,000,000) Common Shares, $.001 par
value per Common Shares. There are currently 1,616,734 Common Shares,
64,333 Class "A" Warrants and 94,333 Class "B" Warrants issued and
outstanding. In May of 1997, the "A" and "B" Warrants were extended for two
years to expire on June 4, 1999. Additionally there are 120,000 options
oustanding. See "Stock ownership of Beneficial Owners" and
The Company provides a daily 900 number hotline information service, weekly
and daily newsletter regarding all aspects of the gaming industry. The
Company also publishes a daily newsletter regarding all aspects of the
Lodging Industry.
The Company also furnishing consulting services. These services
include information services described above, consulting regarding day to day
operations of gaming enterprises and regarding investor relations and
corporate communications for gaming enterprises.
ACQUISITION OF CASINO JOURNAL PUBLISHING GROUP
The Company is acquiring 100% of Casino Journal Publishing Group and its
affiliates (the "Acquired Company") in exchange for the initial issuance of
3,000,000 Common Shares of the Company to the owners and managers of the
acquired Company and the granting of Two Year options to them covering
380,000 Common Shares of Gaming at an exercise price of $3.3125. In
addition, if the operations of the Acquired Company meet certain financial
tests, these owners and managers will be entitled to another 1,500,000 Common
Shares of the Company. As part of this arrangement, the Company has agreed
that the composition of its Board of Directors will be divided between the
Acquired Company group and the Company group in a four/three ratio
respectively. As a result, the control of the Company will be transferred to
the owners and managers of the Acquired Company. The Company has further
agreed to enter into a new five-year employment contract with Alan Woinski
which substantially increases his compensation and similar five year
contracts with four of the current officers of the Acquired Company. See
pages 13, 18 and 19 for additional information. In order to further induce
Mr. Woinski's continued employment with the Company, the parties to this
arrangement have agreed that the Company will grant Mr. Woinski an option to
purchase up to 350,000 Common Shares of Gaming at an exercise price equal to
the average of the closing bid and asked prices as reported on NASDAQ BB on
January , 1998. Such option shall not become effective until
after the Closing and shall run for five years from the Closing Date. Under
this arrangement, Mr. and Mrs. Woinski have entered into an ancillary
agreement which allows an opportunity for the Company to reacquire their
shares in the event of Mr. Woinski's termination, disability or death under
certain terms and conditions.
The Acquired Company publishes magazines and newsletters primarily for the
U.S. gaming industry and its consumers. It also organizes and sponsors major
trade shows and conventions for the gaming industry as well as consumer
gaming festivals for specific resorts or casinos. Moreover, the Acquired
Company publishes a mail order-catalog selling various gaming-related
products. The term "Acquired Company" as used herein shall include Casino
Journal of Nevada, Inc., Casino Journal Publishing Group, Inc., Casino
Communications, Inc. and Gaming Entertainment Exposition, Inc, all of which
corporations are currently owned by four of the Acquired Company's officers.
<PAGE>6
Its two most important publications are Casino Journal ("CJ") and Casino
Player ("CP"). CJ is a leading trade magazine for the gaming industry. Its
primary audience is upper and middle management at U.S. casinos, state and
federal legislators and regulators, institutional investors in casino stocks
and bonds and securities analysts who concentrate on the gaming industry.
CP, on the other hand, is devoted principally to consumers of the gaming
industry, and management believes it is the foremost publication of its kind.
Both magazines are high-end, full-color, glossy publications, issued on a
monthly basis with circulations of 20,000 for CJ and 200,000 for CP although
actual monthly readerships for both magazines are considered to be
significantly higher.
On a custom-basis the Acquired Company also publishes magazines for travel-
entertainment trade associations, individual casinos and entertainment
events like concerts directed at their tourists, guests, employees and
others. Published bi-monthly, monthly or only occasionally, these magazines
include, among others, Nevada Hospitality, Boyd Gaming, Pararotti concerts
and generally provide their readers with information about hotel
accommodations, restaurant, entertainment, Acquired Company developments and
special promotions. Also part of its customized publishing is the Acquired
Company's production of brochures, direct mail pieces and directories for
such industry conventions and casino festivals.
The Acquired Company issues three newsletters on a weekly or monthly basis
for the gaming industry or its consumers. These include "National Gaming
Summary,"Atlantic City Insider" and "Gaming Marketer". Shorter, less
elaborate than its magazines and without advertising, each of these
publications has a different orientation yet together give the Acquired
Company a more diversified product line.
The Acquired Company organizes and sponsors four industry-wide trade shows
each year: the American Gaming Summit in Las Vegas, Nevada, the Southern
Gaming Summit in Biloxi, Mississippi, the Atlantic City Chamber of Commerce
Business Expo and the University of Nevada Las Vegas Casino Operations. At
these events, products and services related to the gaming industry are
exhibited at trade shows by vendors, casinos and government/political
organizations. Educational programs are disseminated though seminars,
lectures and speeches. And special events are held such as luncheons,
cocktail receptions and dinners.
From time to time, the Acquired Company hosts a series of gaming festivals at
specific casinos in Las Vegas, Nevada, Atlantic City, New Jersey or
elsewhere. At these special events the Acquired Company helps a casino
attract and assemble the subscribers of Casino Player and other gambling
customers for a multi-day convention at that casino. Seminars and "how-to"
sessions to improve ones' gambling skills are conducted by renown gambling
experts who usually write for the Acquired Company publications.
The Acquired Company's mail-order catalog markets gaming-related products,
such as books and manuals for gamblers and industry executives,
instructional video tapes on all casino games, gaming memorabilia like
replica slot machines and decks of playing cards, sporting items signed by
famous athletes, clothing and furnishings with casino logos.
The Acquired Company distributes and sells its magazines by subscription, in
bulk through hotels and casinos, over the Internet and on newsstands; its
newsletters by subscription, and its gaming products through a direct-mail
catalog to subscribers' lists. Its convention and festival services are
marketed and sold through subscriber and advertiser lists using direct-mail
techniques as well as over the Internet and through advertisements in its own
magazines.
The Acquired Company primarily generates revenue from its various activities
as follows: (a) magazines though subscription charges and advertising fees,
(b) newsletters through subscription charges, (c) custom magazines through
fees charged to individual clients, (d) conventions through exhibitor,
sponsor and attendee fees as well as sales of directories and other items and
(e) festivals through fees charged to attendees or a specific casino, (f)
mail-order catalog through sales of gaming products. Subscription charges
and advertising fees from CJ and CP represent a substantial portion of the
Acquired Company's annual revenue.
History
The first issue of Casino Journal was published in 1985 and was devoted
essentially to management and labor issues involving the Atlantic City
casinos. Gradually, its coverage became more diverse and it grew into a
feature-oriented trade magazine exploring a host of gaming industry issues---
for example, gambling legislation, drug testing, internal security, casino
marketing, game protection. At the suggestion of Steve Wynn, chairman of
Mirage Resorts, the Acquired Company later started to publish another version
of Casino Journal for the Nevada market. For a time the Acquired Company
published two editions of Casino Journal, one for Atlantic City and the other
for the Nevada area. In 1996, these two editions were merged, but as early
as 1993 they both became glossy, full-colored magazines.
<PAGE>7
In 1988, the Acquired Company, under a joint venture arrangement with Players
International, commenced publication of The Player magazine. In 1989, it
purchased the interest of Players International in this magazine venture and
changed its name to Casino Player. While Casino Journal is directed at the
gaming industry and its operators, regulators and the investment community,
Casino Player targets the industry's consumers and gambling enthusiasts.
The Acquired Company's custom magazine business began in 1992 with the
publication of a quarterly magazine for the Atlantic City's Showboat, a
casino. Subsequently, in conjunction with Gelb Productions, it produced one-
time magazines for special events such as Luciano Pavarotti's Atlantic City
and Nevada concerts. Moreover, since 1994 it has produced an employee-
oriented magazine for Boyd Gaming, now an operator of as many as twelve
casinos in various states.
In 1994 the Acquired Company arranged with the Nevada Hotel & Motel
Association and Nevada Restaurant Association to produce their publication,
called "Nevada Hospitality". This magazine goes beyond the gaming industry
and covers all tourism, lodging and restaurant operations in Nevada. Today,
Nevada Hospitality is published by the Acquired Company on a bi-monthly basis
and distributed throughout the state.
The Acquired Company started its newsletter operations in 1993 with the
"National Gaming Summary". On a weekly basis, subscribers to this newsletter
receive gaming news and developments on a state-by-state basis. In 1996 the
Acquired Company issued its second newsletter--"Atlantic City Insider" which
informs gamblers monthly which casinos in Atlantic City are offering the best
promotions, room rates, discounts and innovations. In 1996, the Acquired
Company assumed operation of
"The Gaming Marketer" in conjunction with Claridge Casino Marketing Vice
President Howard Klein. This publication is geared toward marketing
professionals and focuses on marketing trends and developments in the gaming
industry. To date, only five issues of this newsletter have been
distributed.
Since 1993 the Acquired Company, in association with several other entities,
including Bear Stearns & Acquired Company, has produced the American Gaming
Summit, a trade show and convention for the gaming industry held annually in
Las Vegas, Nevada. Since 1994 it has sponsored Southern Gaming Summit, under
a joint venture with the Mississippi Casino Operators Association, which is
an annual trade show and convention for Southern and Midwestern gaming
interests. From 1995 to date, the Acquired Company has sponsored Gaming
Festivals at various casinos in Atlantic City and Las Vegas. The Acquired
Company's mail-order catalog business commenced in 1993 and continues to
date.
Industry-Overview
As new legislation and regulations have permitted new casino destinations and
made it easier to expand existing ones, the gaming market has dramatically
increased during the 1990's. These trends, coupled with a growing
population seeking more varied entertainment, have made gambling an
additional source of jobs and tax revenue for many states. This growth
appears to be continuing.
While the nation's two primary gaming centers, Atlantic City, New Jersey and
Las Vegas, Nevada have functioned for years, new casinos and hotels are being
built in these cities as well. In addition, casino gambling has been
legitimized in nearly 17 States and along Mississippi River on riverboats. A
total of 48 states permit casino gaming, horse racing or a state-wide
lottery. In various states, Indian casinos have been established and, for
most part, seem to be popular. In Connecticut, in particular, two Indian
casinos, Foxwood operated by the Pequot tribe and Mohegan Sun run by the
Mohegan tribe, have become among the highest revenue producers in U.S casino
gambling. Other cities and states in the U.S. are considering the
legalization of casino gambling in their locales.
Management believes that the Acquired Company's past development has been
directly linked to the growth of the gaming industry. If that growth
continues, in management's opinion, it may have opportunities for increased
revenue. However, should industry growth cease or level-off or new
competition emerge, the Acquired Company's prospects may be restricted or
diminish. Industry growth can be negatively impacted by a failure of
government to permit casino gambling in new areas, more restrictive
government regulations on existing locations, a legislative repeal of
gambling licenses in certain locales, or changes in the moral climate to an
anti-gambling bias, thereby promoting governmental bans or cut-backs or even
dampening consumer demand.
PUBLICATIONS & SPECIAL EVENTS
Proprietary Magazines
The Acquired Company publishes two of its own gambling-oriented magazines---
one for those in the gaming industry and the other for gaming consumers and
enthusiasts.
<PAGE>8
Casino Journal
Casino Journal is the Acquired Company's premier trade magazine serving the
U.S. gaming industry. It is generally distributed to executives and
personnel of casinos and vendors, interested legislators and regulators,
institutional investors and security analysts. Published monthly, it
features articles on issues pertinent to the gaming industry, such as---new
gambling legislation or regulations, new gaming locales, special casino
games, casino marketing, innovative technology, security and the attitude of
investment community to the gaming industry. Casino Journal also contains
profiles on, and interview with, casino chairmen and CEO's, political
personalities, new hotel/casino operators as well as gaming vendors, their
products and the latest technology. Containing articles, editorials and
advertisements, this magazine is a large full-colored, glossy periodical that
usually has between 80 page to 160 pages per issue. Actual circulation
approximates 20,000 copies with total readership estimated to be 80,000 .
Casino Player
Casino Player is a magazine designed for consumers of the gaming industry,
and management believes it has the largest readership of any gaming magazine
in the nation. It is generally distributed to frequent casino gamblers,
tourists, gambling enthusiasts and its 70,000 paid subscribers. It seeks to
create and disseminate gaming information and statistics for players and
visitors to casino destinations ---such as Atlantic City, Las Vegas, Reno,
Mississippi and elsewhere to enable them to play the games better and take
advantage of special situations and casino promotions in order to save money,
achieve better value and enhance their holiday experience.
The Acquired Company has retained a group of professional gamblers and
experts to furnish its readers with gambling strategies and helpful tips on
different games---such as slot machines, video poker, keno, blackjack,
roulette. Moreover, as a portrayer of the gaming lifestyle, the magazine
covers new and established gambling resorts, travel destinations, gaming
news, developments and trends, hotel amenities and in-depth entertainment
interviews, reviews and listings.
Also published monthly, this magazine, though smaller in size then Casino
Journal, is a full-color, glossy magazine that usually runs from 80 pages to
112 pages in each issue. Actual circulation approximates 200,000 copies,
and total readerships is estimated at 600,000. So advertising may be
specifically tailored to the major gaming destinations, this magazine has
four regional editions and one national one although the editional content
remains the same for each edition.
Custom Magazines
The Acquired Company publishes a series of custom magazines for its clients
which are disseminated to their customers, employees, vendors, or members in
the gaming and hospitality areas.
Nevada Hospitality
On a bi-monthly basis, the Acquired Company has contracted to publish a
magazine for the members of the Nevada Hotel & Motel Association and the
Nevada Restaurant Association. With their assistance the magazine is
designed to cover tourism and the available amenities in food, beverage,
lodging, entertainment and sightseeing on a local basis and throughout the
state of Nevada. This magazine's scope goes beyond the gaming industry and
focuses on the lodging and restaurant business as it exists in Nevada.
Contributions to the magazine's content come from these associations, city
convention and visitors authorities, outside experts and consultants in the
hotel, food and beverage fields at the University of Nevada-Las Vegas, and
other firms and associations as well as the Acquired Company. The Acquired
Company's staff establishes cohesive editorial outline and mission, assembles
and edits various articles and supervises the production and distribution of
the magazine.
A full-color, glossy periodical, it carries advertisements and is distributed
to high-level hotel, restaurant and beverage executives within the gaming
industry, to independent hoteliers and restaurateurs throughout Nevada as
well as vendors in the hospitality industry and their patrons. Circulation
runs from 7,000 to 10,000, and total readership is estimated at 14,000 for
each issue.
Boyd Gaming Magazine
On a quarterly basis the Acquired Company publishes an in-house magazine for
the employees of Boyd Gaming, an operator of 12 casinos in Nevada, Louisiana,
Missouri, Mississippi and Illinois. Representatives from Boyd and the
Acquired Company plan each issue. Relevant information is provided by Boyd
to the Acquired Company, and its staff assemblies, edits and produces the
magazine which Boyd then distributes. The magazines focuses on events,
philosophies, projects and developments within Boyd's gaming complex and
carries no advertisements from outside vendors. It is a full-color, glossy
periodical that runs from 64 to 72 pages per issue. Its circulation is
approximately 10,000, and total readership is estimated to be 20,000.
<PAGE>9
Other Publications
The Acquired Company has published other magazines for specific casinos and
entertainment events as well as brochures, direct-mail pieces and directories
for its trade shows and conventions. In the past it has published Atlantic
City Showboat's in-room magazine for its guests, Harrah's recent 60th
Anniversary Commemorative magazine and Gelb Productions Luciano Pavarotti's
concerts in Atlantic City, New Jersey and Reno, Nevada. This type of custom
publishing only occurs from time to time and cannot be relied upon on an on-
going basis.
Newsletters
The Acquired Company publishes three newsletter related to the gaming
industry: National Gaming Summary, Atlantic City Insider and Gaming Marketer.
None of the newsletters carry advertising, and all are distributed through
subscriptions.
National Gaming Summary ("NGS")
Presented in an easily readable format, this newsletter is published weekly
and is designed primarily for those in the gaming industry. Unlike Casino
Journal or Casino Player, the contents of this newsletter are not feature-
oriented, but instead focus on current gaming news and developments from
state-to-state. This approach permits its readers to concentrate on the
states or regions of particular concern to them. In addition, NGS furnishes
investment information, such as stock quotes and analyses for gaming concerns
that are publicly-traded, monthly revenues from all gaming jurisdictions
broken down by casino and special reports.
Noted as a quick-read, this newsletter provides the week's latest gambling
news and is mailed for Monday delivery or faxed or E-mailed for Friday
afternoon disseminations, giving its subscribers up-to-date information on a
timely basis.
Atlantic City Insider ("ACI")
This newsletter is published monthly and is directed at the consumer who
visits, or plans to visit, Atlantic City casinos. Accordingly, it informs
its readership which casinos are offering at different times the best
consumer promotions, cashback, room rates, slot clubs, food discounts and
innovative games. On occasion, ACI criticizes casinos for poor or
inconsistent food, uninteresting entertainment and too costly games with a
low-win percentage. It also announces the location of innovative slot
machines and compares restaurants, buffets, rooms and table games common to
all Atlantic City casinos.
Gaming Marketer ("GM")
This newsletter is the Acquired Company's latest publication and operates as
a joint venture between it and Claridge Casino Marketing Vice President and
Casino Journal Columnist Howard Klein. Written essentially by Mr. Klein, GM
analyzes, assesses and forecasts marketing trends in the gaming industry and
addresses executives and marketing personnel in, or related to, the gaming
industry. This highly specialized newsletter covers such topics as data base
marketing, reassessing customer relations via direct mail, staff management.
To date, the Acquired Company has only published five issues of this
newsletter and may discontinue it in the future.
Trade Show/Conventions/ Special Events
The Acquired Company organizes and sponsors four trade show / conventions and
other special events, although two such trade shows and conventions are being
produced for the first time in 1998.
America Gaming and Lodging Summit ("AGLS")
Held every December in Las Vegas, Nevada, AGLS represents the highest level
executive conference in the gaming industry. It features a trade show where
vendors and casinos exhibit products and services; specialized seminars that
explore timely issues such as new developments in government regulation, the
latest gaming technology, Internet gaming; keynote speakers and social
events such as dinners, cocktail receptions and lunches.
This conference is primarily designed for senior gaming executives and the
investment community as well as those otherwise interested or involved
professionally or commercially in the gaming industry. Each summit usually
draws upwards of 1,000 people and includes government regulators and
legislators, institutional investors, casino executives, manufacturer,
marketing, financial and purchasing executives.
Although the Acquired Company handles most of the arrangements for the
Summit, this conference operates under a joint venture with a principal
member of a Nevada law firm and co-sponsored by Bear, Stearns and Co. Inc.
The Acquired Company primarily generates revenue from this event from
exhibitor, sponsor and attendee fees and charges for directories.
Southern Gaming Summit ("SCS")
Held each spring in Biloxi, Mississippi, SCS is a conference that focuses on
Southern and Midwestern gambling destinations. The Acquired Company, in
conjunction with its joint venture partner, the Mississippi Casino Operators
<PAGE>11
Association, produces the conference. This Summit offers an extensive
exhibit floor where manufacturers, distributors and vendors as well as
casinos display their gaming products and services. Seminars are held that
explore the legal issues confronting Southern and Midwestern casinos, gaming
developments in these areas and federal issues and regulations affecting
gaming. At this Summit keynote speakers, receptions, tours of local
casinos, meals, and a golf tournament are provided.
Those attending SCS entail developers, land owners, representatives from
Native American tribes, legislators, regulators, institutional investors,
security analysts, portfolio managers, vendors and casino executives.
Revenue is generated for the Acquired Company from this Summit in much the
same manner as it is from AGLS.
Greater Atlantic City Chamber of
Commerce Business Expo
The Acquired Company will produce the first Greater Atlantic City Chamber of
Commerce Business Expo in partnership with the Atlantic City Chamber of
Commerce on March 4 and 5, 1998 at the new Atlantic City Convention City.
The purpose of the Expo is to expose local, regional and national businesses
to the commercial opportunities offered in Atlantic City. It is anticipated
that attendees will encompass executives from new and existing casinos,
public utilities, major retail establishments and other businesses interested
in doing business with the casinos of Atlantic City as well as concerned
public officials. The Expo will offer exhibits, seminars, speakers and other
activities.
UNLV's Casino Ops'98
On June 22 and 23, 1998 the Acquired Company will produce, under the
sponsorship of and in partnership with UNLV's the International Gaming
Institute at the University of Nevada Las Vegas, UNLV's Casino Ops'98. This
is a yearly educational conference which will explore the latest trends,
strategies and developments in casino operations. The conference will
feature keynote speakers, seminars, exhibits and special events designed to
emphasize more efficient and profitable casino operations. It is expected
that casino employees and mid-management personnel of, and consultants to,
casinos and their vendors will attend.
Gaming Festivals
In conjunction with and at specific casinos in Atlantic City, New Jersey and
Las Vegas, Nevada, the Acquired Company also occasionally sponsors and
organizes gaming festivals utilizing its list of Casino Player subscribers.
In this regard, such subscribers and other hotel customers are offered a
program specially designed for them at a casino like the Taj Mahal in
Atlantic City. Gambling experts run how-to seminars for the attendees
providing them with tips and techniques on playing various casino games. The
sponsoring hotel typically fills blocks of room through the stays of CP
subscribers and its existing customers during such event. Moreover, it can
expect greater utilization of its games and other facilities. To induce
better attendance, the sponsoring hotel frequently offers free tournaments, a
reception and a gala banquet, thereby building customer loyalty, promoting
its casino and generating additional revenue.
Merchandising
Casino Player's Gaming MarketPlace is a mail-order catalog sent to over
70,000 CP subscribers, room guests of casino hotels and on the Internet. It
offers for sale a host of books and instructional video tapes on all casino
games, apparel with gaming logos or motifs, sport-related items autographed
by professional players, and gaming memorabilia. Products may be ordered by
mail or telephone from the catalog or over the Internet at the Acquired
Company's web site.
Production of Publications
For each issue of its magazines the Acquired Company's editors set the
direction of that issue at editorial meetings, select topics for articles and
editorials, then assign writers, art work and photographs. The Acquired
Company uses both on-staff and free-lance writers, as well as contributors
from organizations it serves, many of whom are gambling experts or
knowledgeable in other fields such as investment analysis. When articles
are submitted, they are edited and the facts are verified by the editors.
Prior to each issue its staff lays out the art, graphics and photographs, and
the editors review them in conjunction with the articles and editorials, then
make the necessary changes. Afterwards, these items are all sent to an
outside printer for initial proofs, later touched up and printed. these
printers run thousands of copies of each issue and arrange, directly or
indirectly, for deliveries to individual subscribers, newsstands, hotels and
casinos or associations. The Acquired Company's editors and staff rely
heavily on desktop publishing technology to write, edit , layout and design
each issue. Typically, each magazine issue will take between one week and ten
days for the staff to complete.
<PAGE>11
The production of its newsletters and convention attendee directories are
usually less time-consuming and involves fewer staff members to produce.
With little graphic art input and no photographs, newsletters are more
editorially intensive than the magazines. Like the magazines, however, items
and topics in the newsletter are assigned to specific writers. Editors
subsequently review all copy and make corrections. The issue is then
designed, edited again and sent to outside printers.
Although often containing art, graphics and photographs, the printed
materials used for Summits, Festivals and other special events tend to be
less complicated than either the magazines or newsletters, are usually
shorter, are produced with less frequency and have more lead time. These
materials are prepared in similar fashion to its magazines.
Distribution
The Acquired Company distributes its magazines in several different ways.
Copies of Casino Player and Casino Journal are mailed directly to
subscribers, including libraries, and are delivered in bulk to casinos and
hotels. Issues of Casino Player are also delivered and sold to selected
bookstores and newsstands nationwide.
Custom magazines are either mailed directly to specific individuals on lists
provided by clients or are delivered to the client itself for redistribution.
Acquired Company newsletters are mailed, faxed or E-mailed to its
subscribers.
Marketing, Advertisement & Fees
The Acquired Company's magazines and newsletters are cross-marketed and sold
through ads in its own publications, over the Internet, by its staff at
conventions, via direct mail and to casino customers in casino mailings.
Attendance at trade shows and conventions sponsored by the Acquired Company
is typically marketed to subscribers to its magazine, through direct mail
and by special invitation. Acquired Company merchandise is generally sold by
catalog through direct mailings to its magazine subscribers and over the
Internet at the Acquired Company's site.
The Acquired Company's in-house sales staff directly solicits advertisers for
its magazines through face-to-face presentations, direct mail and by
telephone. Typically, advertising rates in the Acquired Company's magazines
vary, depending on
size of the ad (2/3,1/2, 1/3, 1/6,1/12 page), frequency of the ad (1,3,6,12
times), number of colors of the ad (1,2,3, full color). In Casino Player,
advertisers have the choice of having their ads published in any of the four
regional editions, eastern, western, mid-western, southern or in the national
edition. Advertising rates vary in this magazine with the region selected.
Subscription rates for its proprietary magazines will depend on the
particular magazine and the length of the subscription: Casino Player : 1
year--- $ 24, 2 years ----$37; Casino Journal: 1 year --- $ 79. The
newsstand price for Casino Journal is $10 per issue and for Casino Player --
$2.95 in U.S. and $4.25 in CDA. Bulk deliveries to casino hotels are either
free or at a negotiated fixed rate .
Annual subscription rates for the Acquired Company's newsletters range from
$49 to $395, depending on the specific newsletter. Attendee rates for the
Acquired Company's Summits usually vary from $395 to $695 and exhibitor rates
from $1195 to $1495, depending on the particular summit or convention.
Competition
The Acquired Company's trade magazine essentially competes with two other
publications, "Casino Executive ("CE") and 'International Gaming and Wagering
Business." ("IG WB"). Though in business for 17 years, IGWB's focus is on the
international gaming market and lotteries in addition to gaming in the U.S.
The foreign market tends to be fragmented, small and spread among many
countries. The Acquired Company concentrates on the U.S. market and avoids
lottery coverage. CE, in its third year of publication, targets the U.S.
market. Competition among these concerns occurs on the bases of advertising
rates and quality of editorial and articles. Currently, CP, the Acquired
Company's consumer magazine, has no direct competition.
In regard to its newsletters, the Acquired Company has experienced little
competition although there is a slight overlap in business between it and
Gaming Venture Corp. USA. Two other newsletters, 'Atlantic City Observer'
and 'Las Vegas Advisor', offer some competition to the Acquired Company's
newsletters. Each of those competitors tends to target a specific area: 'Las
Vegas Advisor' and 'Atlantic City Observer.'
The only competitor of the Acquired Company in the trade show/convention area
is IGWB's World Gaming Congress. This Congress is international in scope and
does not appear to conflict with the Acquired Company's U.S. trade shows.
With regard to its other publications, events and merchandizing, the Acquired
Company has either experienced no or minimal competition. The only other
trade show for the gaming industry, IGBE, has hired the Acquired Company as a
consultant. This consulting agreement expires in 2001.
<PAGE>12
Employees
As of December 31, 1997, the Acquired Company had 37 full-time employees
including its officers of whom 9 served as writers and editors, 5 in arts and
graphics, 7 in sales and marketing, 3 in bookkeeping and accounting, 10 in
circulation and customer service and 3 in general office. None of its
employees is covered by a collective bargaining agreement. The Acquired
Company considers its relationship with its employees to be satisfactory.
Property and Facilities
As of January 31, 1998 the following table lists the Acquired Company's two
offices by location which are both leased:
<TABLE>
<CAPTION>
Approximate Total Expiration Date Approximate Annual
Area Leased of Lease Rental
<S> <C> <C> <C>
Atlantic City, New Jersey 4,500 sq. ft. November 30,1999 $ 48,000(1)
Las Vegas, Nevada(2) 10,000 sq. ft. Month-to-Month $ 135,000
(1) Includes proportionate cost of utilities, repairs and cleaning.
(2) Leased from Glenn Fine, an officer and director of the Acquired Company,
under an oral arrangement, though a multi- year written lease is
being prepared.
</TABLE>
Management
The following individuals have served in the capacities with the Acquired
Company indicated below and will serve as officers and directors of Gaming
Ventures Corp. USA or in other capacities after the approval and consummation
of the acquisition/exchange of shares:
NAME AGE POSITION
Glenn Fine 39 Chairman, CEO & Director
Adam Fine 28 President, Director
Lisa Robertson 31 Vice President, Director
Roger Gros 45 Vice President, Director
Derek James 40 Controller
All of the individuals set forth above have been employed by Acquired Company
as officers for more than five years except for Derek James. Mr. James has
been employed by the Acquired Company for two years. Prior to that time he
had served as a controller of Silver Threads, a manufacturer of women's
sportswear in New York City for 3 years.
Upon approval and consummation of the acquisition/exchange of shares, Gaming
Ventures Corp. USA will entered into a five-year employment contracts
commencing on the Closing with Messr Fines and Gros and Ms. Robertson in
which they will serve as officers. Their annual base salaries will range
from $150,000 to $575,000 and they will be entitled to increases of 10% in
the second through fifth year. Under the agreement, they may also receive
additional unspecified bonuses. Such bonuses shall be determine by the
independent members of the Board of Directors who shall take into account
their individual performances in making such determination. They will be
subject to a two-year covenant-not-to-compete with Gaming Ventures that
begins at the end of the term of such agreements. Such employment contracts
will be similar in terms and conditions to that for Alan R. Woinski.
Under the Acquisition/Exchange of Stock Agreement, Messrs Fines and Gros and
Ms Robertson hold in the aggregate five year options to purchase 380,000
shares of Gaming's Common Stock at an exercise price of $2.40 per share.
Certain Transactions
As previously indicated, the Acquired Company's offices in Las Vegas, Nevada
are being leased from Glenn Fine, an officer and director of the Acquired
Company, on a month-to-month basis at an annual rental of $135,000. A
written lease with a five-year term is currently being prepared. The
Acquired Company began leasing this space in May 1997 for which it paid a
total rent of $80,000 in that year. Until May 1997, the Acquired Company
made mortgage payments to cover interest and principal due to a local bank on
a home owned by Glenn Fine located in Absecon, New Jersey. Those payment
amounted to $19,548 in 1997, $22,105 in 1996 and $22,210 in 1995. The
Acquired Company has made no further payments under this mortgage.
<PAGE>13
Prior to the Closing, Glenn Fine, Adam Fine and Mrs Iris Fine, their mother,
owed the Acquired Company $350,000, $110,000 and $27,000 with interest at 6%
per annum, respectively, in connection with certain loans. Prior to the
closing, those loans will be repaid or netted out against funds owed by the
Acquired Company to them.
Certain distributions will be made to the shareholders and officers of the
Acquired Company prior to the Closing to enable them to pay taxes due and
owing by them because of the ownership of the Acquired Company (treated as an
S Corpoation under the Internal Revenue Code) and in connection with
remaining accrued profits. Such amounts are estimated to be $300,000 in the
aggregate.
Financials
CASINO JOURNAL PUBLISHING GROUP, INC.
AND AFFILIATES
COMBINED FINANCIAL STATEMENTS
WITH ACCOMPANYING INFORMATION
YEARS ENDED DECEMBER 31, 1996 AND 1995 (AUDITED)
AND ELEVEN MONTHS ENDED NOVEMBER 30, 1997
AND 1996 (UNAUDITED)
AND
INDEPENDENT AUDITORS' REPORT
CASINO JOURNAL PUBLISHING GROUP, INC. AND AFFILIATES
COMBINED FINANCIAL STATEMENTS WITH ACCOMPANYING INFORMATION
YEARS ENDED DECEMBER 31, 1996 AND 1995 (AUDITED)
AND ELEVEN MONTHS ENDED NOVEMBER 30, 1997 AND 1996 (UNAUDITED)
<PAGE>14
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS OF CASINO JOURNAL PUBLISHING GROUP, INC.
AND AFFILIATES
We have audited the accompanying combined balance sheet of CASINO
JOURNAL PUBLISHING GROUP, INC. AND AFFILIATES as of December 31,
1996 and 1995, and the combined statements of income and retained
earnings and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these combined financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
combined financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of
CASINO JOURNAL PUBLISHING GROUP, INC. AND AFFILIATES as of December
31, 1996 and 1995, and the results of their operations and their
cash flows for the years then ended, in conformity with generally
accepted accounting principles.
December 17, 1997, except for
Note 9, as to which the date is
January 13, 1998
<PAGE>15
CASINO JOURNAL PUBLISHING GROUP, INC. AND AFFILIATES
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
December 31, November 30,
1996 1995 1997
(Unaudited)
<S> <C> <C> <C>
Current assets
Cash $412,546 $523,156 $376,746
Accounts receivable 925,627 772,896 901,954
Investment in marketable securities 24,177 20,539 27,891
Inventories 22,128 19,529 38,042
Loans receivable, employees and related parties 113,991 116,191 149,421
Prepaid expenses and taxes 15,004 18,900 23,705
Total current assets 1,513,473 1,471,211 1,517,759
Property and equipment - at cost, less accumulated
depreciation 150,463 128,962 226,203
Loan receivable, shareholder 522,764 357,728 204,055
Other assets 27,016 25,490 27,228
$ 2,213,716 $ 1,983,391 $1,975,245
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities
Accounts payable and accrued expenses $ 874,698 $ 437,603 $ 900,443
Note payable 65,659 180,928 -
Current portion of deferred subscription revenues 548,295 625,150 539,894
Deferred income, trade show - - 205,082
Current maturities of loan payable, automobile 14,585 14,972 10,283
Total current liabilities 1,503,237 1,258,653 1,655,702
Deferred subscription revenues,
less current portion 499,689 379,645 478,006
Loan payable, automobile, less current maturities 9,025 23,610 -
2,011,951 1,661,908 2,133,708
Minority interest in American Gaming Summit, LLC 63,849 108,709 43,849
Shareholders' equity (deficiency)
Common stock 11,100 11,100 11,100
Additional paid-in capital 66,177 66,177 66,177
Retained earnings (deficit) 60,639 135,497 (279,589)
137,916 212,774 (202,312)
$ 2,213,716 $ 1,983,391 $ 1,975,245
</TABLE>
<PAGE>16
CASINO JOURNAL PUBLISHING GROUP, INC. AND AFFILIATES
COMBINED STATEMENT OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
<TABLE>
<CAPTION>
Eleven Months Ended
Year Ended December 31, November 30,
1996 1995 1997 1996
(Unaudited)
<S> <C> <c. <C> <C>
Revenues
Advertising $ 3,885,898 $ 3,482,320 $ 4,504,082 $ 3,449,289
Subscriptions 1,845,233 1,531,255 1,311,697 1,266,531
Trade shows 864,531 528,190 476,103 437,646
Management fee - related party - 56,000 - -
Other 393,494 332,168 144,125 309,348
6,989,156 5,929,933 6,436,007 5,462,814
Operating costs
Printing 1,573,927 1,237,834 1,489,558 1,427,908
Production 883,993 506,750 565,284 537,671
Postage 396,075 324,656 359,727 334,458
Distribution 269,018 213,307 284,306 229,697
Commissions 491,917 476,002 628,663 466,777
Other 259,469 304,136 85,917 82,545
3,874,399 3,062,685 3,413,455 3,079,056
Gross profit 3,114,757 2,867,248 3,022,552 2,383,758
General and administrative expenses 3,018,466 2,553,144 2,651,713 2,703,616
Operating income (loss) 96,291 314,104 370,839 (319,858)
Other income 31,293 12,158 12,583 87,973
Income (loss) before income taxes
and minority interest 127,584 326,262 383,422 (231,885)
Income taxes 6,715 4,415 - -
Income (loss) before minority
interest 120,869 321,847 383,422 (231,885)
Minority interest in earnings of American
Gaming Summit, LLC 80,139 101,917 - -
Net income (loss) 40,730 219,930 383,422 (231,885)
Retained earnings, beginning of period 135,497 35,567 60,639 135,497
Dividends paid (115,588) (120,000 (723,650) (115,588)
Retained earnings (deficit),
end of period $ 60,639 $135,497 $(279,589) $ (211,976)
</TABLE>
<PAGE>17
CASINO JOURNAL PUBLISHING GROUP, INC. AND AFFILIATES
COMBINED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Eleven Months Ended
Year Ended December 31, November 30,
1996 1995 1997 1996
(Unaudited)
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $40,730 $219,930 $383,422 $(231,885)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities
Depreciation and amortization 50,737 58,017 47,952 23,098
Minority interest in earnings of American
Gaming Summit, LLC 80,139 101,917 - -
Changes in assets and liabilities
Accounts receivable (152,731) (102,966) 23,673 (316,870)
Inventories (2,599) 7,108 (15,914) (4,253)
Prepaid expenses and taxes 3,896 (5,567) (8,701) 7,741
Other assets (1,526) (2,727) (212) (1,826)
Accounts payable and accrued
expenses 437,096 (96,085) 25,745 383,428
Deferred subscription revenue 43,189 268,788 (30,084) 216,552
Deferred income, trade show - - 205,082 289,668
Net cash provided by operating
activities 498,931 448,415 630,963 365,653
Cash flows from investing activities
Additions to property and equipment (72,238) (62,014) (123,692) (51,792)
Investment in marketable securities (3,638) (4,997) (3,714) (420)
Loans receivable, employees 2,200 (35,162) (35,430) (1,894)
Loans receivable, shareholder (165,036) (5,360) 318,709 (126,326)
Net cash provided by (used in)
investing activities (238,712) (107,533) 155,873 (180,432)
Cash flows from financing activities
Principal payments on note payable (115,269) (112,072) (65,659) (106,197)
Principal payments on loan payable,
automobiles (14,972) (8,774) (13,327) (14,178)
Capital contributed - 10,000 - -
Dividends paid (115,588) (120,000) (723,650) (115,588)
Dividends paid to minority interest (125,000) (40,000) (20,000) (65,000)
Net cash used in financing activities (370,829) (270,846) (822,636) (300,963)
Net increase (decrease) in cash (110,610) 70,036 (35,800) (115,742)
Cash, beginning of period 523,156 453,120 412,546 523,156
Cash, end of period $ 412,546 $ 523,156 $376,746 $ 407,414
Supplemental cash flow disclosures
Interest paid $ 30,584 $ 36,874 $ 23,380 $ 29,656
Income taxes paid 6,858 6,120 - -
</TABLE>
<PAGE>18
CASINO JOURNAL PUBLISHING GROUP, INC. AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
The Company, with offices in Atlantic City, New Jersey, and Las Vegas,
Nevada, publishes consumer gaming magazines and gaming industry trade
publications. The Company also sponsors and operates gaming industry trade
shows.
Basis of Combination
The accompanying financial statements include the accounts of Casino Journal
Publishing Group, Inc. (formerly known as Ace Marketing, Inc.) and its
affiliates, Casino Journal of New Jersey, Inc., Casino Journal of Nevada,
Inc., Casino Communications, Inc., Gaming Entertainment Expositions, Inc.,
and its 60%-owned subsidiary, American Gaming Summit, LLC (collectively, the
"Company"). These entities have been combined based on common control and
the shareholders' plan to sell the stock of these entities in a single
transaction. All significant intercompany transactions and balances have
been eliminated.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses.
Investment in Marketable Securities
Marketable securities, consisting of common stock, are classified as
available-for-sale in accordance with the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". SFAS No. 115 requires that such
investments be stated at fair value, with unrealized gains or losses shown as
a separate component of shareholders' equity. Unrealized gains and losses at
December 31, 1996 and 1995 are not material and, accordingly, have not been
reflected in the accompanying financial statements.
Inventories
Inventories, which consist principally of books, are stated at the lower of
cost (first-in, first-out) or market.
Property and Equipment
Property and equipment are carried at cost. Depreciation is computed on the
straight-line and accelerated methods over the estimated useful lives of the
assets.
Revenue Recognition
Subscription revenues are deferred and recognized in income as issues of
magazines and newsletters are delivered to the subscribers. Advertising
revenue is recognized on publication of the respective magazine.
Income Taxes
Each entity has elected S Corporation status for Federal and New Jersey
income tax purposes, where applicable. Under these elections, taxable income
or loss is reportable on the shareholders' individual income tax returns, and
the Companies are not required to make provision for Federal income tax.
Provisions are made for New Jersey S Corporation tax.
Interim Unaudited Financial Information
The financial statements as of November 30, 1997 and for the eleven months
ended November 30, 1997 and 1996 are unaudited; however, in the opinion of
management, all adjustments (consisting solely of normal recurring
adjustments) necessary for fair presentation of the financial statements for
these interim periods have been included. The results of interim periods are
not necessarily indicative of the results to be obtained for a full fiscal
year.
<PAGE>19
2 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
December 31, November 30,
1996 1995 1997
(Unaudited)
<S> <C> <C> <C>
Equipment 82,993 $ 88,250 $ 87,809
Furniture and fixtures 174,419 130,229 292,996
Vehicles 75,123 75,123 75,123
332,535 293,602 455,928
Less - Accumulated
depreciation 182,072 164,640 229,725
$ 150,463 $ 128,962 $ 226,203
</TABLE>
3 - NOTE PAYABLE
The note, which was payable to a vendor (see Note 7), was satisfied in 1997
and required monthly payments of $10,000 including interest at 10%. Interest
expense on the note was $15,947 and $23,306 for the years ended December 31,
1996 and 1995, respectively.
4 - LOAN PAYABLE, AUTOMOBILE
The loan, which matures in 1998, requires monthly payments of $1,322,
including interest at 7.5%. Interest expense on the loan was $1,261 and
$2,327 for the years ended December 31, 1996 and 1995, respectively.
5 - COMMON STOCK
Common stock, all of which is no par value, consists of the following:
<TABLE>
<CAPTION>
Shares
Issued and
Company Authorized Outstanding Amount
<S> <C> <C>
Casino Journal Publishing Group, Inc. 2,500 100 $ 100
Casino Journal of New Jersey, Inc. 5,000 100 -
Casino Journal of Nevada, Inc. 5,000 100 -
Casino Communications, Inc. 2,500 100 1,000
Gaming Entertainment Expositions, Inc. 25,000 300 10,000
40,000 1,600 $ 11,100
</TABLE>
6 - RELATED PARTY TRANSACTIONS
The Company rents office space on a month-to-month basis from one of its
shareholders. Rent expense was $17,735 (unaudited) and $18,581 (unaudited)
for the eleven months ended November 30, 1997 and 1996, respectively, and
$22,105 and $22,210 for the years ended December 31, 1996 and 1995,
respectively.
Included in loans receivable, employees and related parties is a loan to a
family member of a shareholder. The balance of this loan was $35,110
(unaudited), $25,343 and $15,143 at November 30, 1997 and December 31, 1996
and 1995, respectively. Also included is a loan to a shareholder of one of
the entities. The balance of this loan was $104,454 (unaudited), $62,734 and
$88,878 at November 30, 1997 and December 31, 1996 and 1995, respectively.
In 1995, the Company received a nonrecurring management fee of $56,000 from
an entity that was 50% owned by its majority shareholder.
7 - ADDITIONAL CASH FLOWS STATEMENT INFORMATION
In 1995, an automobile was acquired with financing of $42,492.
During 1996, fully depreciated assets with a cost of approximately $32,700
were written off.
In 1995, a liability of $293,000 to a vendor was converted to a note payable
secured by accounts receivable and inventory (see Note 3).
<PAGE>20
8 - LEASE COMMITMENT
The Company leases premises under a noncancelable operating lease expiring
September 30, 1999. The lease requires additional rent payments based on
increases in real estate taxes and operating expenses over base period
amounts.
Approximate future minimum rent payments are as follows:
Year Ending
December 31,
1997 $ 56,000
1998 58,000
1999 49,000
$ 163,000
Rent expense, including month-to-month rentals (see Note 6), was $154,507
(unaudited) and $94,307 (unaudited) for the eleven months ended November 30,
1997 and 1996, respectively, and $105,042 and $93,958 for the years ended
December 31, 1996 and 1995, respectively.
9 - SUBSEQUENT EVENT
On January 13, 1998, the Company entered into an exchange of stock/purchase
agreement with Gaming Venture Corp., USA, ("Gaming"), a publicly held company
traded on the OTC Bulletin Board, pursuant to which Gaming would acquire all
of the outstanding ownership interests of the Company. Upon consummation of
the merger, the shareholders of Casino Journal Publishing Group, Inc. and
affiliates will own 3,000,000 shares, or approximately 65% of Gaming.
The Board of Directors unanimously recommends a vote FOR the acquistion of
Casino Journal Publishing Group. Proxies solicited by management will be so
voted unless stockholders specify otherwise.
The affirmative vote of a majority of the shares of Common Stock of the
Acquired Company represented and voting at the Annual Meeting is required for
approval of the above Directors.
ELECTION OF BOARD OF DIRECTORS
Pursuant to the Bylaws, each Director shall serve until the annual meeting of
the stockholders, or until his successor is elected and qualified. The
Company's basic philosophy mandates the inclusion of directors who will be
representative of management, employees and the minority shareholders of the
Company. Directors may only be removed for "cause". The term of office of
each officer of the Company is at the pleasure of the Company's Board.
The principal executive officers, directors and nominees of the Company are
as follows:
<TABLE>
<CAPTION>
Name Position Term(s) of Office
<S> <C> <C>
Alan Woinski, age 33 President Inception to
and Director present
Kim Santangelo-Woinski, Vice President, Secretary, Inception to
age 34 Treasurer and Director present
Louis Dachis, age 28 Director Inception to present
Bruce Merrin, age 52 Vice President August 1, 1997 to present
Pat Cruzen, age 50 Director October, 1997 to present
Jean Regan, age 40 Director October, 1997 to present
Glenn Fine, age 39 nominee
Adam Fine, age 28 nominee
Roger Gros, age 45 nominee
Lisa Robertson, age 31 nominee
</TABLE>
Pursuant to the proposed acquisition of Casino Journal Publishing Group,
Inc., only AlaN Woinski and Kim Santangelo-Woinski are being re-nominated for
directors. The resumes of current re-nominees and nominees for Directors of
the Company are as follows:
<PAGE>21
Alan Woinski - Mr. Woinski is currently President and a Director of
the Company. Mr. Woinski founded The Gaming Industry Daily Report in March,
1993 and has been its editor since August 1993. Mr. Woinski was Vice
President of A & E Printing, Inc. from January 1988 to December 1994. From
January 1995 to July, 1996, Mr. Woinski was President of A & E Printing,
Inc., a commercial printing company. As Vice-President, Mr. Woinski was
in charge of sales, marketing and production. As president, Mr. Woinski's
duties were expanded to hiring and firing personnel, inventory control and
overseeing all operations of the company. From December 1992 to August
1995, Mr. Woinski was also President of Lucky Management Corp, an
investment advisory firm which also held interests in other businesses
including printing, real estate, etc. As president, Mr. Woinski handled
all investment advisory accounts including being the advisor to the
Monitrend Gaming and Leisure fund. Mr. Woinski served as an advisor
for the Monitrend Gaming and Leisure Mutual Fund from October 1993 to
December 1994 and was Portfolio Manager of the High Rollers Investment
Partnership from December 1992 to October 1993. Duties as advisor and
portfolio manager included updates on the gaming industry including trend
analysis, technical analysis on securities on companies in the
gaming industry, buy and sell recommendations, etc. Mr. Woinski
graduated from Hofstra University in 1986.
Kim Santangelo-Woinski - Mrs. Woinski is currently Vice President,
Secretary/Treasurer and a Director of the Company. Mrs. Woinski was
Vice President of Lucky Management Corp., an investment advisory firm
which also held interests in other businesses including printing, real
estate, etc. from December 1992 to August 1995. Mrs. Woinski was vice
president in charge of all in-house accounting and customer relations as
well as running the entire office including ordering supplies, equipment,
etc. From January 1992 to January 1994, Mrs. Woinski worked as operations
manager/personal assistant to the President of Tee Dee's, Inc., a women's
clothing store. Mrs. Woinski's duties included office management and
personnel supervision. From 1990 to 1992, Mrs. Woinski was beverage
manager of Waypointe, Inc., and served as beverage manager of Treadway
Inn Hotel from 1989 to 1991. Her duties as beverage manager included
hiring staff, inventory and overseeing and filing reports for the parent
company.
Glenn Fine. Mr. Fine is a nominee for Director of the Company. Mr. Fine is
Publisher and Chief-Executive-Officer of Casino Journal Publishing Group.
Mr. Fine started Casino Journal Publishing Group in 1984 as a small Atlantic
City employee publication. He has directed the growth of the Company which
now includes the largest group of gaming publications in the world, with four
trade magazines and newsletters, including the industry-leading Casino
Journal; a custom publishing division; Casino Player, the nation's largest
circulation consumer gaming magazines; and a gaming entertainment convention
division.
Roger Gros. Mr. Gros is a nominee for Director of the Company. Mr. Gros
is Vice President/Development of Casino Journal Publishing Group. Since
joining Casino Journal Publishing Group in 1984, he has held virtually every
editorial title. He is a founding editor of Casino Player magazine,
directing its editorial division until December 1994. He remains a senior
editor of the Casino Journal and Casino Player as well as the National Gaming
Summary and the Atlantic City Insider. Mr. Gros also directs Gaming
Entertainment Expositions, the trade and consumer show division of Casino
Journal Publishing Group.
Adam A. Fine. Mr Fine is a nominee for Director of the Company. Adam Fine
is Chief Operating Officer of Casino Journal Publishing Group. After
attending Rutgers University, Mr. Fine played a critical role in the
development of Casino Journal Publishing Group from its inception in 1984.
In addition to serving as Editor-in-Chief of all the groups' publications,
including Casino Journal and Casino Player magazines, he serves also as Chief
Operating Officer, with oversight responsibility for marketing, circulation,
sales, new product development and day-to-day operations. In 1989, Mr. Fine
established Casino Journal's Las Vegas office, which has since become the
nerve center for the Company's editorial and sales functions.
Lisa Robertson. Ms. Robertson is a nominee for Director of the Company.
Ms. Robertson is Vice President/Creative Director of Casino Journal
Publishing Group. Before joining Casino Journal Publishing Group in 1988,
she served as production director for the Times Beacon Newspapers of Ocean
County, New Jersey. As Vice President in charge of Casino Journal's creative
services, Ms. Robertson directs the Company's art department and coordinates
the production schedules for all its publications, as well as the design and
production of corporate direct mail and promotional materials. She has also
played a key role in the development of Gaming Entertainment Expositions
Inc., the Company's trade show division.
The Board of Directors unanimously recommends a vote FOR the election of
Glenn Fine, Adam Fine, Roger Gros and Lisa Robertson and the re-election of
Alan Woinski and Kim Santagele-Woinski to the Board of Directors of the
Company. Proxies solicited by management will be so voted unless
stockholders specify otherwise.
<PAGE>22
The affirmative vote of a majority of the shares of Common Stock of the
Company represented and voting at the Annual Meeting is required for approval
of the above Directors.
CHANGE OF NAME
Upon approval of the proposed acquisition of Casino Journal Publishing Group,
Inc., the Company will be primarily pursuing the current business of the
acquired company. Moreover, since the acquired company is much larger than
the Company and has been in business since 1984, the Board of Directors
determined that it would be economically beneficial to change the name of the
Company to Casino Journal Publishing Group, Inc. to maintain continued
goodwill of the acquired business and to more accurately reflect the change
in focus of the Company's operations.
The Board of Directors unanimously recommends a vote FOR the Name Change.
Proxies solicited by management will be so voted unless stockholders specify
otherwise.
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock is necessary to approve the name change.
APPROVAL OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors recommends for approval by the Shareholders the
selection of Friedman, Alpren and Green LLP as the independent certified
public accountants of the Company for the fiscal year ending October 31,
1998.
In additional to its principal service of examining the financial statement
of the Company, Friedman, Alpren and Green LLP provided certain non-
audit services for the Company during the preceding fiscal year and such
services were approved by management. In approving the services, management
determined that the nature of the services and the estimated fees to be
charged would have no adverse effect on the independence of the accountants.
Representatives of Freidman, Alpren and Green LLP are expected to be
able via telephone at the Annual Meeting and to have the opportunity to make
a statement should they desire to do so and to be available to respond to
appropriate questions.
The Board of Directors unanimously recommends a vote FOR the approval of
Friedman, Alpren and Green LLP. Proxies solicited by management will be so
voted unless stockholders specify otherwise.
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock is necessary to approve Friedman, Alpren and
Green LLP as the Company's auditors.
Increase in Common Shares Reserved For Issuance Pursuant to
Non-Statutory Stock Option Plan
The Company needs to continue to attract and retain persons of experience and
ability and whose services are considered valuable. In addition the Company
needs to continue to encourage the sense of proprietorship in such perons and
to stimulate the active interest of such persons in the development and
success of the Company. As a result, the Board of Directors has approved the
increased in the Common shares reserved for issuance to 1,200,000 Common
Shares pursuant to the 1996 Stock Option Plan. The source of Common Shares
to be reserved for issuance under the 1996 Non-Statutory Stock Option Plan
shall be a portion of the currently authorized Common Shares. The Plan will
terminate on March 15, 2006 and no option may be granted pursuant to the Plan
thereafter.
Options are granted only to persons who are employees of the Company or a
subsidiary corporation of the Company (including any subsidiary which may be
organized or acquired subsequent to adoption of the Plan) who agree to remain
in the employ of, and render services to, the Company or a subsidiary
corporation of the Company for a period of at least one (1) year from the
date of the granting of the option. The term "employees" shall include
officers, directors, executives, consultants, and supervisory personnel, as
well as other employees of the Company or a subsidiary corporation of the
Company.
The purchase price under each option issued is determined by a Committee (of
not less than three members, at least one of whom shall be a Director of the
Company), at the time the option is granted, but in no event shall such
purchase price be less than 85 percent of the fair market value of the
Company's Common Stock on the date of the grant. All options issued under
the Plan shall be for such period as the Committee shall determine, but for
not more than ten (10) years from the date of grant thereof.
<PAGE>23
New Plan Benefits. The benefits or amounts that will be received by or
allocated to the executive officers, directors or employees cannot be
determined. At the end of each fiscal year, the compensation committee
determines who shall receive the options. The compensation committee, which
is composed of the Board of Directors, reviews all employees after the end of
each fiscal year. Particular attention is paid to each employee's
contribution to the current and future success of the Company along with
their salary level as compared to the market value of personnel with similar
skills. The compensation committee also looks at accomplishments which are
above and beyond management's normal expectations for their position.
The Board of Directors unanimously recommends a vote FOR the increase in the
Common Shares reserved for the non-statutory stock option plan. Proxies
solicited by management will be so voted unless stockholders specify
otherwise.
The affirmative vote of a majority of the shares of Common Stock of the
Cormpany represented and voting at the Annual Meeting is required for
approval of the 1996 Non-Statutory Stock Option Plan. The Board of
Directors recommends a vote FOR the proposed 1996 Non-Statutory Stock Option
Plan. Proxies solicited by management will be so voted unless stockholders
specify otherwise.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following tables list the Company's stockholders who, to the best of the
Company's knowledge, own of record or, to the Company's knowledge,
beneficially, more than 5% of the Company's outstanding Common Stock; the
total number of shares of the Company's Common Stock beneficially owned by
each Director; and the total number of shares of the Company's Common Stock
beneficially owned by the Directors and elected officers of the Company, as a
group. The following does not reflect the 3,000,000 Common Shares to be
issued to owners and managers of the Acquired Company upon completion of the
proposed offering. Currently, none of the nominees to the Board of
Directors own any securities of the Company,
<TABLE>
Percentage of
Number & Class Outstanding
Name and Address of Shares Common Shares
<S> <C> <C>
Alan Woinski 714,000(1)(2)(3) 45.19%
177 Main Street
Suite 312
Fort Lee, NJ 07024
Lucky Management Corp. 714,000(1)(2)(3) 44.16%
177 Main Street
Suite 374
Fort Lee, NJ 07024
Kim Santangelo-Woinski 714,000(1)(2)(3) 44.16%
177 Main Street
Suite 312
Fort Lee, NJ 07024
Louis Dachis 5,000 .31%
13705 1st Avenue North
Minneapolis, MN 55441
Pat Cruzen 0 0%
6310 Maple Ridge Drive
Victoria, MN 55331
Bruce Merrin 0 0%
3885 So. Decatur Boulevard
Suite 3001
Las Vegas, NV 89103
Jean Regan 0 0%
140 Carlson Parkway
Minnetonka, MN 55305
All Directors & Officers
as a group (6 persons) 719,000 44.47%
</TABLE>
(1)pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or sole
or shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through a contract,
<PAGE>24
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, each person indicated above has sole power to vote, or dispose or
direct the disposition of all shares beneficially owned, subject to
applicable community property laws.
(2)Includes Lucky Management Corp., Alan Woinski, the principal
shareholder thereof, and Kim Santangelo-Woinski, who is married to Mr.
Woinski, who together constitute a "group," as that term is defined in
Section 13D of the Securities Exchange Act of 1934, as amended.
(3)The above disclosure does not include common shares which may be issued
upon the exercise of the Class A or Class B Warrants. Assuming exercise
of the Class A and Class B Warrants, Alan Woinski, Kim Santangelo-Woinski
and Lucky Management shall beneficially own a total of 947,332 common
shares.
There are currently 64,333 Class A Warrants outstanding. The following
tabulates holdings of Class A Warrants of the Company by each person who,
subject to the above, at the date of this Prospectus, holds of record or is
known by Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company individually
and as a group.
<TABLE>
<CAPTION>
<S> <C> <C>
Name Total Number of Percentage
Class A Warrants Owned
Alan Woinski(1) 0 0%
Kim Santangelo-Woinski(1) 0 0%
Lucky Management Corp.(1) 0 0%
Louis Dachis 667 .0104%
Pat Cruzen 0 0%
Jean Regan 0 0%
Bruce Merrin 0 0%
All Officers and Directors -3 667 .0104%
</TABLE>
(1)pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition)
with respect to a security whether through a contract, arrangement,
understanding, relationship or otherwise. Unless otherwise indicated, each
person indicated above has sole power to vote, or dispose or direct the
disposition of all shares beneficially owned, subject to applicable community
property laws.
(2)Includes Lucky Management Corp., Alan Woinski, the principal shareholder
thereof, and Kim Santangelo-Woinski, who is married to Mr. Woinski, who
together constitute a "group," as that term is defined in Section 13D of the
Securities Exchange Act of 1934, as amended.
There are currently 99,333 Class B Warrants outstanding. The following
tabulates holdings of Class B Warrants of the Company by each person who,
subject to the above, at the date of this Prospectus, holds of record or is
known by Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company individually
and as a group.
<TABLE>
<CAPTION>
<S> <C> <C>
Name Total Number of Percentage
Class B Warrants Owned
Alan Woinski(1) 0 0%
Kim Santangelo-Woinski(1) 0 0%
Louis Dachis 667 .0071%
Lucky Management Corp.(1) 0 0%
Pat Cruzen 0 0%
Jean Regan 0 0%
Bruce Merrin 0 0%
All Officers and Directors - 667 .0071%
</TABLE>
(1)pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition)
with respect to a security whether through a contract, arrangement,
<PAGE>25
understanding, relationship or otherwise. Unless otherwise indicated, each
person indicated above has sole power to vote, or dispose or direct the
disposition of all shares beneficially owned, subject to applicable community
property laws.
(2)Includes Lucky Management Corp., Alan Woinski, the principal shareholder
thereof, and Kim Santangelo-Woinski, who is married to Mr. Woinski, who
together constitute a "group," as that term is defined in Section 13D of the
Securities Exchange Act of 1934, as amended.
EXECUTIVE COMPENSATION During fiscal 1997, and as of the date
of filing this report, only cash compensation has been paid. Mr. Woinksi
was paid $65,550 as an officer of the Company., Kim Santangelo-Woinski was
paid $26,000 as an officer of the Company. and Bruce Merrin was paid
$18,076 as an officer of Gaming Venture Corp. and President of Gaming
Venture's West. Bruce was also paid a $20,000 compensation signing bonus on
August 1, 1997. There been not been any compensation arrangements or plans,
other than what has been indicated below.
The Company has not entered into Employment Agreements with any of its
officers except for Bruce Merrin. Pursuant to the proposed acquisition of
Casino Journal Publishing group, the Company shall enter into an employment
agreement with Alan Woinski and four of the current officers of the Acquired
Company. See "Acquisition of Casino Journal Publishing Group" for further
discussion of these employment agreements.
Pursuant to his employment agreement effective August 1, 1997, Mr. Merrin
shall receive a salary of $30,000. Mr. Merrin shall receive a total of
15,000 Common Shares of the Company over the next three quarters ended July
31, 1998. The agreement has a term of one year.
Pursuant to the Agreement Mr. Merrin agreed that, during the period of his
contract and for a further period of Two (2) years after leaving the employ
of the Company, he will not, directly or indirectly, engage in the
production, manufacture, or distribution of any products similar to or
competitive with, those manufactured or sold by the Company, either for his
own benefit or for the benefit of any other person, firm or Company whatsoever
other than the Company.
Additionally, during the Employment Term and for a period of Two (2) years
thereafter, Mr. Merrin shall not (a)(i) compete with Company in defined
Territory in the conduct of its business or in the conduct of any other
business carried on by Company or (ii) engage or participate, directly or
indirectly, in any business or businesses substantially similar to the
business as conducted by Company as at the time of this agreement or as may
thereafter be conducted by Company at any time during the Employment Term (b)
solicit or cause to be solicited within or without the Territory any customers
of Company or (c) recruit or cause any other person to recruit any employee of
Company to any of said business or businesses.
The Board of Directors and shareholders have approved a Non-Statutory Stock
Option Plan to attract and retain persons of experience and ability and whose
services are considered valuable and to encourage the sense of proprietorship
in such persons and to stimulate the active interest of such persons in the
development and success of the Corporation.
1. Persons Eligible to Participate in Non-Statutory Stock Option Plan.
The persons eligible for participation in the Plan as recipients of
Non-statutory Stock Options ("NSOs") shall include full-time and part-time
employees (as determined by the Committee) and officers of the Company or of
an Affiliated Corporation. In addition, directors of the Company or any
Affiliated Corporation who are not employees of the Company or an Affiliated
Corporation and any attorney, consultant or other adviser to the Company or
any Affiliated Corporation shall be eligible to participate in the Plan. For
all purposes of the Plan, any director who is not also a common law employee
and is granted an option under the Plan shall be considered an "employee"
until the effective date of the director's resignation or removal from the
Board of Directors, including removal due to death or disability. The
Committee shall have full power to designate, from among eligible individuals,
the persons to whom NSOs may be granted. A person who has been granted an NSO
may be granted an additional NSO or NSOs, if the Committee shall so determine.
The granting of an NSO shall not be construed as a contract of employment or
as entitling the recipient thereof to any rights of continued employment.
2. Stock Reserved for the Plan. Subject to adjustment, a total of
750,000 shares of Common Stock, $.001 par value per share ("Stock"), of the
Company shall be subject to the Plan. The Stock subject to the Plan shall
consist of unissued shares or previously issued shares reacquired and held by
the Company or any Affiliated Corporation, and such amount of shares shall be
and is hereby reserved for sale for such purpose. Any of such shares which
may remain unsold and which are not subject to outstanding NSOs at the
termination of the Plan shall cease to be reserved for the purpose of the
Plan, but until termination of the Plan, the Company shall at all times
reserve a sufficient number of shares to meet the requirements of the Plan.
Should any NSO expire or be canceled prior to its exercise in full, the
unexercised shares theretofore subject to such NSO may again be subjected to
an NSO under the Plan.
<PAGE>26
3. Option Price. The purchase price of each share of Stock placed under
NSO shall not be less than Eighty Five percent (85%) of the fair market value
of such share on the date the NSO is granted. The fair market value of a
share on a particular date shall be deemed to be the average of either (i) the
highest and lowest prices at which shares were sold on the date of grant, if
traded on a national securities exchange, (ii) the high and low prices
reported in the consolidated reporting system, if traded on a "last sale
reported" system, such as NASDAQ, for over the counter securities, or (iii)
the high bid and high asked price for other over-the-counter securities. If
no transactions in the Stock occur on the date of grant, the fair market value
shall be determined as of the next earliest day for which reports or
quotations are available. If the common shares are not then quoted on any
exchange or in any quotation medium at the time the option is granted, then
the Board of Directors or Committee will use its discretion in selecting a
good faith value believed to represent fair market value based on factors then
known to them. The cash proceeds from the sale of Stock are to be added to
the general funds of the Company.
4. Exercise Period. (a) The NSO exercise period shall be a term of
not more than ten (10) years from the date of granting of each NSO and shall
automatically terminate:
(i) Upon termination of the optionee's employment with the Company
for cause;
(ii) At the expiration of twelve (12) months from the date of
termination of the optionee's employment with the Company for any reason other
than death, without cause; provided, that if the optionee dies within such
nine-month period, subclause (iii) below shall apply; or
(iii) At the expiration of fifteen (15) months after the date of
death of the optionee.
(b) "Employment with the Company" as used in the Plan shall include
employment with any Affiliated Corporation, and NSOs granted under the Plan
shall not be affected by an employee's transfer of employment among the
Company and any Parent or Subsidiary thereof. An optionee's employment with
the Company shall not be deemed interrupted or terminated by a bona fide leave
of absence (such as sabbatical leave or employment by the Government) duly
approved, military leave or sick leave.
The following options and warrants are currently issued to officers and
directors of the Company.
Alan Woinski 10,000 options to purchase Common Shares at $.01.
Expiration date is June, 1998
15,000 options to purchase Common Shares at $1.50
Expiration date is July, 1999
5,000 options to purchase Common Shares at $4.50
Expiration date is January 7, 2000
Kim Woinski 10,000 options to purchase Common Shares at $.01.
Expiration date is June, 1998
15,000 options to purchase Common Shares at $1.50
Expiration date is July, 1999
5,000 options to purchase Common Shares at $4.50
Expiration date is January 7, 2000
Louis Dachis 10,000 options to purchase Common Shares at $.01
Expiration date is June, 1998
15,000 options to purchase Common Shares at $1.50
Expiration date is July, 1999
5,000 options to purchase Common Shares at $4.50
Expiration date is January 7, 2000
Bruce Merrin 10,000 options to purchase Common Shares at $2.50
Expiration date is June 3, 2000
Pat Cruzen 10,000 options to purchase Common Shares at $4.50
Expiration date is January 7, 2000
Jean Regan 10,000 options to purchase Common Shares at $4.50
Expiration date is January 7, 2000
Louis Dachis 667 "A" Warrants, exercisable into Common Shares at
$4.00 per Common Share
Expiration date is June 1999
<PAGE>27
667 "B" Warrants, exercisable into Common Shares at
$6.00 per Common Share
Expiration date is June 1999
These amounts do not include the 350,000 options to be issued to Mr. Woinski
after the Closing of the proposed acquisition or the 380,000 options to be
issued to the owners and managers of the Acquired Company. See discussion
under "Acquisition of Casino Journal ublishing Group."
Board of Directors Compensation. Members of the Board of Directors
may receive an amount yet to be determined annually for their
participation and will be required to attend a minimum of four meetings
per fiscal year. All expenses for meeting attendance or out of pocket
expenses connected directly with their Board representation will be
reimbursed by the Corporation. Director liability insurance may be
provided to all members of the Board of Directors. No differentiation is
made in the compensation of "outside directors" and those officers of
the Corporation serving in that capacity.
There is no plan or arrangement with respect to compensation received or
that may be received by the executive officers in the event of
termination of employment or in the event of a change in responsibilities
following a change in control.
CERTAIN TRANSACTIONS
During the period ended October 31, 1995, Mr. Alan Woinski, an officer of
the Company, lent the Company $1,100. The loan was payable upon demand.
Based on the fact that there is no annual interest rate for the loan and the
fact that Mr. Woinski is a principal in the Company and is aware of the
current financial situation of the Company, the Company is of the opinion
that the terms are as or more favorable as those which could have been
obtained by nonaffiliates. The Company repaid $585 in July, 1995.
During June, 1995, affiliates of the Company exchanged office equipment with a
historical cost basis of $7,498 for common stock of the Company.
During November, 1995 the Company entered into a lease for its office
facilities with a related party expiring during November 2000. The rent
pursuant to the lease approximates fair market. Minimum annual rent payment
due under the lease totals $18,000 for each year ended October 31, 1996
through 2000.
DISTRIBUTION OF SECURITIES. On June 4, 1995, the Board of Directors
authorized the distribution of 100,000 each of A and B stock purchase warrants
exercisable as follows:
$4.00 plus one A warrant for each share of common stock; and
$6.00 plus one B warrant for each share of common stock.
The warrants are exercisable for a period of two years from the date of issue
and are callable with 30 days notice at a price of $.001 per warrant.
Upon the resignation of a director, 667 of the Class "A" and Class "B"
Warrants were retired.
LOCKUP AGREEMENT. Pursuant to a written agreement in October, 1995, the
principal shareholders and officers and directors (Alan Woinski, Kim
Santangelo-Woinski, Lucky Management Corp., Louis Dachis who received warrants
issued them pursuant to the Special Meeting of the Board of Directors held on
June 4, 1995 have agreed as follows:
In the event the shareholder exercises any warrants, the stock issued to the
shareholder pursuant to the exercise shall be locked in and restricted from
trading for a period of two years. A notice is to be placed on the face of
each stock certificate covered by the terms of the Agreement stating that the
transfer of the stock evidenced by the certificate is restricted until
twenty-four (24) months from the date of issuance. The shareholder also
agrees not to sell or otherwise transfer their interest in the warrants except
to an underwriter or other market makers in the stock once a market is
established. The shareholder further agrees that the total value in cash, or
other consideration, paid by the buyer to the seller shall not exceed $.01 per
warrant.
VOTING AND SOLICITATION OF PROXIES
Stockholders represented by properly executed proxies received by the Company
prior to or at the Meeting and not duly revoked will be voted in accordance
with the instructions thereon. If proxies will be voted in instructions are
indicated thereon, such proxies will be voted in favor of Items 1 through 5
inclusive. Execution of a proxy will not prevent a stockholder from
attending the Meeting and revoking his proxy by voting in person (although
attendance at the Meeting will not in itself revoke a proxy). Any
stockholder giving a proxy may revoke it at any time before it is voted by
giving to the Company's Secretary/Treasurer written notice bearing a later
<PAGE>28
date than the proxy, by delivery of a later dated proxy, or by voting in
person at the Meeting. Any written notice revoking a proxy should be sent to
Gaming Venture Corp., U.S.A, 177 Main Street, Suite 312, Fort Lee, NJ 07024.
The Company's Board of Directors does not know of any other matters which
will be presented for consideration at the Meeting. However, if any other
matters which will be presented for consideration at the Meeting. However,
if any other matters are properly presented for action at the Meeting, it is
the intention of the person(s) named in the accompanying Form of Proxy to
vote the shares represented thereby in accordance with their best judgment on
such matters.
All costs relating to the solicitation of proxies made hereby will be borne
by the Company. Proxies may be solicited by officers and directors of the
Company personally, by mail or by telephone or telegraph, and the Company may
pay brokers and other persons holding shares of stock in their names of those
of their nominees for their reasonable expenses in forwarding soliciting
material to their principals.
It is important that proxies be returned promptly. Stockholders who do not
expect to attend the Meeting in person are urged to sign and date the
accompanying Form of Proxy and mail it in a timely fashion so that their vote
can be recorded.
ADDITIONAL INFORMATION
The Company's Annual Report to Shareholders for the fiscal year ended October
31, 1998, including the consolidated financial statements and related notes
thereto, together with the report of the independent auditors and other
information with respect to the Company, accompanies this Proxy Statement.
OTHER MATTERS
The Company is not aware of any other business to be presented at the Annual
Meeting. If matters other than those described herein should properly
arise at the meeting, the proxies will vote on such matters in accordance
with their best judgment.
SHAREHOLDER PROPOSALS
Proposals by Shareholders intended to be presented at the 1998 Annual Meeting
must be received by the Company no later than November 15, 1998.
