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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter ended January 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
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Commission file number - 33-98184
GAMING VENTURE CORP., U.S.A.
Exact name of Registrant as specified in its charter)
NEVADA 22-3378922
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
177 Main Street, Suite 312, Fort Lee, NJ 07024
(Address of principal executive offices) (Zip Code)
(201) 947-4642
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding twelve months (or such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
file such filing requirements for the past thirty days.
Yes x No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
1,616,834 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
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GAMING VENTURE CORP., U.S.A.
PART I: Financial Information
ITEM 1 - Financial statements
ITEM 2 - Management's' discussion and analysis of
financial condition and results of operations
PART II: Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
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PART I
Item 1. Financial Statements:
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<CAPTION>
GAMING VENTURE CORP., U.S.A.
COMPARATIVE BALANCE SHEET
JANUARY 31
(UNAUDITED)
<S> <C> <C>
1998 1997
Assets
Current Assets
Cash and Cash Equivalents $1,025,428 $ 1,012,684
Accounts Receivable 45.096 35,813
Prepaid Advertising Expense 12,836 3,388
Trading Securities 38,902 38,875
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Total Current Assets $1,122,262 $1,090,760
Fixed Assets
Furniture & Equipment 28,734 18,369
Less: Accumulated Depreciation 9,534 4,390
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Fixed Assets - Net 19,200 13,979
Other Assets
Organization Costs net of amortization 1,436 2,073
Other Investments 613,875 330,000
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Total Other Assets 615,311 332,073
Total Assets $1,756,733 $1,436,812
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Taxes Payable $21,606 $ -
Accounts Payable 13,314 2,474
DUE TO AFFILIATES - -
Deferred Revenue 201,607 180,887
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Total Current Liabilities $236,527 $183,361
Stockholders' Equity
Common Stock, $.001 par value, 50,000,000 shares 1,609 1,592
authorized, 1,591,834 AND 1,631,834 shares issued
& outstanding
Paid in Capital 1,388,489 1,446,002
Unrealized (Loss) on Investments (26,310) -
Retained Earnings 156,464 -
Accumulated Deficit - (194,143)
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Total Stockholders' Equity 1,520,246 1,253,451
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Total Liabilities and Stockholders' Equity $1,756,773 $1,436,812
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</TABLE>
See the accompanying notes to the financial statements
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<TABLE>
<CAPTION>
GAMING VENTURE CORP., U.S.A.
COMPARATIVE STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 31,
(UNAUDITED)
1998 1997
<S> <C> <C>
Revenue $192,458 $134,922
Costs and expenses:
General and administrative 121,041 63,827
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Net Income from operations 71,417 71,095
Other income:
Interest Income 14,318 9,883
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Net income before taxes $85,735 $80,978
Provision for income taxes 16,650 0
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Net income $69,085 80,978
Per share information:
Weighted average number of common
shares outstanding 1,612,903 1,599,911
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Net income per share $ 0.04 $ 0.05
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See the accompanying notes to the financial statements
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<CAPTION>
GAMING VENTURE CORP., U.S.A.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31
(UNAUDITED)
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net Income $69,085 $80,978
Depreciation and Amortization 1,560 1,045
Gain on Sale of securities (467 -
Common Stock issued for consulting services 14,000 -
Increase in Accounts Receivable (19,801) (3,514)
Increase in Prepaid Expenses (10,555) (998)
Decrease in Accounts Payable 1,163 (645)
Other (68,859) (53)
Increase in Deferred Revenue (11,981) (63,812)
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Net cash provided by (used in) operations $ 25,855 $ 13,001
Cash flows from investing activities:
Proceeds from sale of securities 3,063
(Increase in Fixed Assets (137) -
(Increase) in restricted cash (3,061) -
Decrease in note receivable - 18,000
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Net cash provided by (used in)
investing activities $ (135) $ 18,000
Cash flows from financing activities:
Common Stock issued for cash $ - $170,000
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Net increase in cash $ (25,900) $200,328
Cash beginning of period 845,785 812,356
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Cash end of period $ 819,795 1,012,684
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See the accompanying notes to the financial statements.
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GAMING VENTURE CORP., U.S.A.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JANUARY 31, 1998
Note. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial information and Article 10 of Regulation S-X. They do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year. The
accompanying financial statements should be read in conjunction with the
Company's audited financial statements for the twelve months ended October 31,
1997 included in Company's Form 10-KSB.
Net income per share
The net income per share is computed by dividing the net income for the
period by the weighted average number of common shares outstanding for
the period.
Note 2. STOCKHOLDERS' EQUITY
During October, 1995 the Company filed a registration statement with the
Securities and Exchange Commission on Form S-1 which was declared
effective on June 4, 1996 which registered 100,000 Class A Warrants,
100,000 Class B Warrants and 1,196,834 shares of common stock
(including the 200,000 common shares underlying the Class A and Class B
Warrants).
Note 3. MARKETABLE SECURITIES
The Company's securities that are bought and held principally for the
purpose of selling them in the near term are classified as trading securities.
Trading securities are recorded at fair value as a current asset with the
change in fair value during the period included in earnings.
At January 31, 1998, the Company held equity securities with a fair value of
$38,902 and a cost of $60,252. The unrealized holding loss for the
period is shown as a separate component of stockholders equity. The Company
had sales proceeds of $0 from trading securities during the period ended
January 31, 1997.
Note 4. INCOME TAXES
The Company provides for income taxes pursuant to Financial Accounting
Standards Board Statement No. 109 "Accounting for Income Taxes". A
provision for income taxes of $16,650 has been provided for the period. The
Company is unable to predict future taxable income that would enable it to
utilize any deferred tax asset and therefore the deferred tax asset of
approximately $160,000 has been fully reserved.
Note 5. CONCENTRATION OF CREDIT RISK
The Company currently has $746,788.96 on deposit in a money market fund at
a singe broker. The amount of SIPC insurance on this fund is limited to
$100,000.
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GAMING VENTURE CORP., U.S.A.
PART I (cont.)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations:
Trends and Uncertainties. nasmuch as a major portion of the Company's
activities is the development and operation of a daily 900 number hotline
information service, the Daily Lodging Newsletter, a daily and a weekly
newsletter regarding the gaming industry and providing consulting services,
the Company's business operations may be adversely affected by competitors
and prolonged recessionary periods.
In addition, the future exercise of any of the outstanding Warrants is
uncertain based on the current financial condition of the Company. The lack
of future exercise of the Class A or Class B Warrants would negatively impact
the Company's ability to successfully expand operations.
During the year ended October 31, 1997 consulting fees were earned from
Casinovations ($45,000), Players Network ($15,000) Europa Cruises
($30,620), Game Financial Corp. ($12,000), Royal Casino Group, Inc.
($37,500), Vodavi Technology ($24,000), American Wagering, Inc. ($32,060) and
New Horizon Kids Quest ($26,400). Consulting fees also included Casino
Resource Corp. ($17,500) and Chancellor Corp. ($5,250) Public Relations fees
for Gaming Venture's West included Players Network ($4500), Jeff Kutash
Productions ($2,000), Europa Cruises ($3,000). Celebrity Speaking fees
totaled $9,550. There can be no certainty that this limited number of
consulting service customers will continue to utilize the Company's services
or that the Company can replace or add to these consulting customers.
During the three months ended January 31, 1998 consulting fees were earned
from Casinovations ($37,500), Players Network ($30,000) Europa Cruises
($7,780), Game Financial Corp. ($2,000), Royal Casino Group, Inc. ($7,500),
Vodavi Technology ($6,000), American Wagering, Inc. ($15,060) and New Horizon
Kids Quest ($6,600). Consulting fees also included Casino Resource Corp.
($15,000), Nevada Gold & Casinos, Inc. ($600) and Chancellor Corp. ($10,500).
There can be no certainty that this limited number of consulting service
customers will continue to utilize the Company's services or that the Company
can replace or add to these consulting customers.
Capital and Source of Liquidity. The Company signed a lease to rent 700
square feet of office space through December 31, 2000. The Company exercised
its option to rent an additional six hundred square feet of space commencing
November 1, 1995. Total lease payments per month increased from $700 per
month to $1,500. This may have a negative impact on the cash flow of the
Company. The landlord is Lucky Management Corp. Other than the lease, the
Company has no material commitments for capital expenditures.
For the year ended October 31, 1997, the Company received $16,185 from the
sale of securities. The Company acquired securities valued at $28,438 and
property and equipment of $10,901. As a result, the Company had net cash
used in investing activities of $5,154.
For the three month period ended January 31, 1998, the Company purchased $137
worth of equipment, had an increase in restricted cash of $3,061 and received
proceeds from the sale of securities of $3,063. As a result, the Company had
cash flow used in investing activities of $(135).
For the year ended October 31, 1997, the Company made payments to related
parties of $515.. The Company issued common stock for cash of $170,000 and
acquired treasury stock valued at $71,496. As a result, the Company had net
cash provided by financing activities of $97,989.
For the three month period ended January 31, 1998, the Company had no
financing activities.
Results of Operations. The Company had net operating income of $338,622
for the year ended October 31, 1997. General and administrative expenses
for the year ended October 31, 1997 were $316,277 and related party general
and administrative expenses of $19,046. These consisted principally of
officer's salaries of $99,627, rent of $18,324, telephone of $20,390 and
other general and administrative expenses of $177,936. The Company had a
decrease in accounts receivable of $7,004. Deferred revenue increased
$23,767 from the sale of its newsletter subscriptions and prepaid consulting
revenue. The Company acquired common stock and options as non-cash
consideration valued at $270,000 as partial payment of its consulting
services. The Company realized gain on the sale of securities of $4,685 and
had amortization and depreciation of $4,628 and $638 for the year ended
October 31, 1997. The Company had an increase in prepaid expenses and
accounts payable of $43,082. Net cash provided by operations for the year
ended October 31, 1997 was $143,166.
The Company had net income of $80,978 for the three months ended January 31,
1998. General and administrative expenses for the three months ended
January 31, 1998 were $121,041 and consisted principally of officer's salaries
of $52,300, rent and utilities of $5,794, telephone of $5,209, printing and
advertising of $7,447, professional fees of $26,600 and miscellaneous general
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and administrative expenses of $23,691. The Company had an increase in
accounts receivable of $19,801 due to increased operations. Deferred revenue
decreased $68,859 and taxes payable decreased $11,981. Net cash provided by
operations for the three months ended January 31, 1998 was $25,855.
The Company is seeking to lower its operating expenses while expanding
operations and increasing its customer base and operating revenues. The
Company is focusing on decreasing administrative costs. However,
increased marketing expenses will probably occur in future periods as the
Company attempts to further increase its marketing and sales efforts.
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GAMING VENTURE CORP., U.S.A.
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
None
(b) Reports on Form 8-K
On January 26, 1998, the Company filed a report on Form 8-K regarding Item 2.
Acquisition or Disposition of Assets. On January 13, 1998, the Company
agreed to issue 3,000,000 shares of its common stock, par value $001 in
exchange for all of the outstanding Common stock of Casino Journal Publishing
Group. Current exchanging shareholders of Casino Journal Publishing Group
shall be issued an additional amount of common shares (up to 1,500,000
shares) upon reaching revenues of $8 million in 1998 and $9 million in 1999.
Additionally, the Company shall grant the exchanging shareholders options to
purchase 380,000 shares of its common stock at an exercise price of $2.40 per
share.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 16, 1998 /s/ Alan Woinski
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Alan Woinski, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> JAN-31-1998
<CASH> 1,025,428
<SECURITIES> 38,902
<RECEIVABLES> 45,096
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,122,262
<PP&E> 28,734
<DEPRECIATION> 9,534
<TOTAL-ASSETS> 1,756,773
<CURRENT-LIABILITIES> 236,527
<BONDS> 0
<COMMON> 1,609
0
0
<OTHER-SE> 1,251,859
<TOTAL-LIABILITY-AND-EQUITY> 1,756,773
<SALES> 53,938
<TOTAL-REVENUES> 192,458
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 121,041
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 85,735
<INCOME-TAX> 16,650
<INCOME-CONTINUING> 69,085
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 69,085
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
