UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1999
----------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For the transition period from ___________________ to ______________________
Commission file number 0-27226
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SPINTEK GAMING TECHNOLOGIES, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 33-0134823
- -------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1857 Helm Drive, Las Vegas, Nevada 89119
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(702) 263-3660
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the issuer (1) filed all reports to be filed
by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes _X_ No ___
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
146,087,055 shares of Common Stock, $0.002 par value as of February 5, 2000
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<PAGE>
SPINTEK GAMING TECHNOLOGIES, INC.
FORM 10-QSB
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at December 31, 1999 and June 30, 1999 3
Consolidated Statements of Operations for the Three Months and Six
Months Ended December 31, 1999 and 1998 4
Consolidated Statements of Cash Flows for the Six Months Ended
December 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE PAGE 13
EXHIBIT INDEX 14
</TABLE>
2
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SPINTEK GAMING TECHNOLOGIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
1999 1999
---------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash ........................................................ $ 341 $ 981
Accounts receivable, net .................................... 1,295 598
Prepaid and other current assets ............................ 667 389
Inventories, net ............................................ 2,055 1,996
-------- --------
Total current assets ...................................... 4,358 3,964
Furniture, fixtures and equipment, net ........................ 440 353
Licenses and patents, net ..................................... 929 959
Other assets .................................................. 115 120
-------- --------
Total assets .................................................. $ 5,842 $ 5,396
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................ $ 1,330 $ 1,590
Accounts payable to stockholder ............................. 90 490
Current portion of capitalized leases and notes payable ..... 191 593
Accrued liabilities ......................................... 622 693
Accrued interest ............................................ 95 14
Customer deposits ........................................... 479 580
-------- --------
Total current liabilities ................................. 2,807 3,960
-------- --------
Long-term debt, net of current portion ........................ 2,601 408
-------- --------
Stockholders' equity:
Convertible preferred stock, no par value, 100,000 shares
authorized, no shares issued and outstanding .............. -- --
Common stock, $.002 par value, 500,000,000 shares authorized,
146,087,505 and 143,560,448 shares issued and outstanding . 295 287
Additional paid-in capital .................................. 24,535 23,758
Accumulated deficit ......................................... (24,367) (22,988)
Treasury stock, 1,317,329 shares, at cost ................... (29) (29)
-------- --------
Total stockholders' equity ............................... 434 1,028
-------- --------
Total liabilities and stockholders' equity ................... $ 5,842 $ 5,396
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
3
<PAGE>
SPINTEK GAMING TECHNOLOGIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales .............................................. $ 2,545 $ 1,007 $ 4,046 $ 2,009
Cost of sales ...................................... 1,219 578 2,029 1,121
--------- --------- --------- ---------
Gross profit ..................................... 1,326 429 2,017 888
Selling, general and administrative expenses ....... 1,414 1,055 2,834 2,035
Research and development expense ................... 27 79 150 164
Stock option compensation expense .................. 148 -- 264 --
--------- --------- --------- ---------
Operating loss ................................... (263) (705) (1,231) (1,311)
Other income (expense):
Interest and other income ........................ 18 23 29 34
Depreciation and amortization .................... (49) (27) (90) (38)
Interest expense ................................. (59) (72) (87) (135)
--------- --------- --------- ---------
Net loss ........................................... (353) (781) (1,379) (1,450)
Conversion preference of convertible preferred stock -- (83) -- (166)
--------- --------- --------- ---------
Net loss applicable to common shares ............... $ (353) $ (864) $ (1,379) $ (1,616)
========= ========= ========= =========
Loss per common share information:
Weighted average common shares:
Basic .......................................... 145,355 18,793 143,982 18,733
========= ========= ========= =========
Diluted ........................................ 145,355 18,793 143,982 18,733
========= ========= ========= =========
Net loss per common share:
Basic .......................................... $ (0.00) $ (0.05) $ (0.01) $ (0.09)
========= ========= ========= =========
Diluted ........................................ $ (0.00) $ (0.05) $ (0.01) $ (0.09)
========= ========= ========= =========
</TABLE>
<PAGE>
SPINTEK GAMING TECHNOLOGIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
December 31,
------------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss ............................................... $(1,379) $(1,450)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization ........................ 90 38
Non-cash interest expense ............................ 81 126
Change in allowance for inventory obsolescence, net .. (3) (30)
Non-cash operating expenses for common stock
options vesting during period ....................... 264 --
(Increase) decrease in assets:
Accounts receivable .................................. (726) (223)
Inventory ............................................ (57) (1,103)
Prepaid expenses and other ........................... (242) (15)
Increase (decrease) in liabilities:
Accounts payable ..................................... (260) 36
Accrued liabilities .................................. 23 119
Customer deposits .................................... (101) (215)
------- -------
Net cash used in operating activities .................... (2,310) (2,717)
------- -------
Net cash used in investing activities:
Purchase of furniture, fixtures and equipment .......... (147) (87)
------- -------
Cash flows from financing activities:
Proceeds from issuance of convertible debentures ....... -- 2,650
Proceeds from draws under credit agreement ............. 1,800 --
Proceeds from issuance of term debt .................... 55 --
Payments on term debt .................................. (65) --
Repayments of notes payable to affiliates and
stockholders ......................................... -- (170)
Proceeds from issuance of common stock ................. 27 --
Net cash provided by financing activities ................ 1,817 2,480
------- -------
Net increase (decrease) in cash and cash equivalents ..... (640) (324)
Cash and cash equivalents, beginning of period ........... 981 500
------- -------
Cash and cash equivalents, end of period ................. $ 341 $ 176
======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements
5
<PAGE>
SPINTEK GAMING TECHNOLOGIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
December 31,
-----------------
1999 1998
---- ----
<S> <C> <C>
Supplemental schedule of non-cash investing and
financing activities:
Conversion preference of preferred stock ............. $ -- $(166)
====== =====
Issuance of common stock for debt ................... $ -- $ 26
====== =====
Issuance of common stock for accrued liability ...... $ 494 $ --
====== =====
Supplemental disclosure of cash flow information:
Cash paid for interest ............................... $ 6 $ 8
====== =====
</TABLE>
See accompanying Notes to Consolidated Financial Statements
6
<PAGE>
SPINTEK GAMING TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Spintek Gaming
Technologies, Inc. ("SGT") and its wholly owned subsidiary Spintek Gaming, Inc.
("Gaming"), and Gaming's wholly owned subsidiary, Spinteknology, Inc.
("Spinteknology") (SGT, Gaming and Spinteknology are collectively referred to as
the "Company"). All significant intercompany transactions have been eliminated.
The consolidated balance sheet as of December 31, 1999 and the related
consolidated statements of operations for the three months and six months ended
December 31, 1999 and 1998 and consolidated statements of cash flows for the six
months ended December 31, 1999 and 1998 are unaudited but, in the opinion of
management, reflect all adjustments necessary for a fair presentation of results
for those periods. The results of operations for an interim period are not
necessarily indicative of the results for the full year. The consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto contained in the Company's annual report
on Form 10-KSB for the year ended June 30, 1999.
The accompanying financial statements for prior periods reflect certain
reclassifications, which have no effect on net losses or cash flows in those
periods, to conform to classifications in the current period.
NOTE 2 - TERM DEBT
On August 31, 1999, Malcolm C. Davenport V, a director of the Company and
beneficial holder of 46.5% of the Company's Common Stock, provided a letter
agreement to the Company whereby Mr. Davenport agreed to loan the Company up to
$2.00 million during the next twelve months. During the six months ended
December 31, 1999, the Company borrowed $1.80 million under this letter
agreement. As of February 5, 2000, the Company had borrowed the $2.00 million
available under this letter agreement, plus an additional $200,000. The Company
is currently in negotiations with Mr. Davenport in an effort to increase the
amount of credit available under this letter agreement. No assurance can be
given that the Company will be successful in increasing the amount of credit.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain information included herein contains statements that may be considered
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as
terms expressing future expectations, enthusiasm about future potential, and
anticipated growth in sales, revenues and earnings. All forward-looking
statements, although made in good faith, are subject to important risks and
uncertainties that could significantly affect anticipated results in the future
and, accordingly, results may differ from those expressed in any forward-looking
statements made herein. Such statements are necessarily speculative and factors
including, but not limited to, unusual production or supply problems, unusual
risks attending foreign transactions, competitive pressures, unanticipated
problems in obtaining approvals and/or licenses from governmental authorities as
to products or the ability to sell products in any jurisdiction, a general
deterioration in domestic or global economic conditions, and changes in federal
or state tax laws or laws permitting legalized gaming in any jurisdiction within
which gaming is currently conducted or the administration of such laws, could
cause results to differ materially from those projected.
7
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Year 2000 Comments
As reported in previous Forms 10-QSB and 10-KSB, the approach of the year 2000
("Y2K") was a potential problem for businesses utilizing computers in their
operations since many computer programs are date sensitive and would only
recognize the last two digits of the year (i.e., recognizing the year "2000 as
the year "1900" if at all). As of February 1, 2000, the Company has not incurred
any problems with its internal accounting and financial reporting programs, has
had no Y2K disruptions in its inventory procurement processes, and no Y2K
problems have been communicated to the Company from customers. The Company's
costs, which were expensed when incurred in previous periods, were less than
$20,000. The Company does not anticipate that additional costs will be incurred
in the future in relation to the Y2K issue.
Material Changes in Results of Operations
Background Information
The Company's business plan has been to develop and market proprietary gaming
and non-gaming technology, patent such technology nationally and
internationally, and obtain all necessary governmental approvals and/or licenses
to sell products developed with this exclusive technology domestically and
internationally. The Company has focused its efforts on AccuSystem(TM) and
AccuHopper(TM), a slot machine hopper weighing system, and certain ancillary
products specifically for the gaming industry. The Company began to actively
market and sell its products in the second half of the Company's fiscal 1998,
and, as a result, management determined that the Company would no longer report
as a development stage enterprise commencing with the Form 10-KSB for the year
ended June 30, 1998.
Although the AccuSystem is capable of operating on a stand-alone real-time
basis, many casinos have indicated that they would prefer to have it interface
with their existing slot accounting systems. The Company has been diligently
working with various developers and vendors of slot machine accounting systems
on interfaces of AccuSystem with their products. At the World Gaming Congress
and Exposition trade show in Las Vegas in September 1999, three of the primary
vendors of slot machine accounting systems presented AccuSystem interfaces in
their show booths. These interfaces, which must be reviewed and approved by the
gaming authorities in most jurisdictions, are continuing to undergo field trials
in various jurisdictions.
In addition to the added controls, which can reduce the amount of employee
theft, it is management's belief that use of the AccuHopper, whether as a
stand-alone system or interfaced with a slot accounting system, should result in
increased customer satisfaction through more efficient use of slot personnel as
well as increased revenues for the casino operator. Customer satisfaction would
be positively impacted by two operational efficiencies that AccuHopper provides:
(a) having the AccuHopper system function as the second verifying "signature" on
slot machine fills, thereby allowing for one person fills; and (b) the ability
to pre-fill machines that have notified slot personnel through visual and system
alerts that a hopper has reached a level indicating that a fill is imminent.
Increased revenues for the casino should result from the decrease in active
machine down time due to the ability to pre-fill slot machines and the
capability of performing one person fills, together with increased customer
satisfaction in not having to wait prolonged periods of time for a slot machine
fill. One person fill capability has been approved by the Nevada and Mississippi
gaming authorities subject to their review and approval of the internal control
systems of each casino implementing this procedure.
Six Months Ended December 31, 1999 and 1998
During the six month period ended December 31, 1999, sales were approximately
$4.05 million, net of sales returns and allowances of $164,000, compared to
sales of $2.02 million for the six months ended December 31, 1998. As of January
31, 2000, the Company's sales backlog was approximately $2.00 million.
8
<PAGE>
The gross margin for the six months ended December 31, 1999 was approximately
50% compared to a gross margin of approximately 44% in the prior year period
which had been negatively impacted by discounts in sales prices as a means of
introducing the Company's product in targeted jurisdictions.
Selling, general and administrative expenses increased $799,000, or
approximately 39%, to $2.83 million for the six months ended December 31, 1999
from $2.03 million in the same period in the prior year. Payroll and payroll
related expenses were approximately $1.46 million for the six month period ended
December 31, 1999, reflecting an increase of approximately $426,000 over the
prior year period. This increase in payroll and payroll related expenses was
primarily due to increased staffing in the areas of customer service,
engineering costs associated with product adaptation to certain slot machines
physical configurations, and an increase in administrative payroll.
Other selling, general and administrative expenses increased approximately
$211,000, or 18.1%, during the six month period ended December 31, 1999, to
$1.37 million, from $1.16 million in the six months ended December 31, 1998.
This was primarily due to increases of approximately $136,000 in the reserve for
inventory obsolescence, $78,000 in utilities and facilities rent and $37,000 in
trade show expense. The increase in the reserve for inventory obsolescence
expense was primarily due to improvements made to certain of the Company's
weighing mechanisms which significantly impacted the carrying value of certain
inventory items. As of December 31, 1999, the reserve for obsolescence was
$437,000, reflecting a net decrease of $3,000 during the six month period ended
December 31, 1999 after the write off of $139,000 in inventory items that were
scrapped and which had been reserved for in previous periods. The increase in
utilities and facilities rent was due to the additional costs associated with
the larger facility the Company moved into in November 1998 and the leasing of a
second warehouse/production facility in September 1999. Other general and
administrative expenses in the current year period are generally higher than the
prior year period due to increased staffing and sales activities.
Research and development expenses decreased $14,000, or 8.5%, to $150,000 for
the six month period ended December 31, 1999 when compared to the same period in
the prior year. Management anticipates the research and development expenses
will increase in future periods as the Company continues in its endeavor to
adapt its proprietary coin weighing technology into non-gaming markets, as well
as fulfilling its commitment to develop new products, including new games that
would work with existing slot machine protocols, for both the gaming and
non-gaming markets. Research and development expenses include those associated
with new product development. Expenses associated with the improvement or
modification of existing products are classified as engineering expenses and
included in the selling, general and administrative expense category.
In the fourth quarter of fiscal 1999, the Company reported that the holders of
its Convertible Preferred Stock and 6% Secured Convertible Notes elected to
convert such securities into the Company's Common Stock (the "Conversion"). As a
result, an anti-dilution provision contained in the Company's 1996 Stock Option
Plan (the "Plan") was activated whereby the equity position held by option
holders could not be diluted or enhanced by the issuance of or reduction in the
number of shares of common stock issued other than through the Plan subject to
certain approvals by the Board of Directors. In addition, the anti-dilution
provision required the total amount to be paid by a holder of a stock option
previously granted not be increased or decreased by a change in the number of
shares outstanding. As a result of these provisions, outstanding options at the
time of the Conversion were reissued at prices that were less than the market
price on the dates of the Conversions. Therefore, the Company is required to
report as a non-monetary operating expense the difference between the option
price and the market value of options to acquire the Company's Common Stock at
the time such options vest. During the six month period ended December 31, 1999,
options vested to acquire 1,814,752 shares of the Company's Common Stock
resulting in a non-monetary operating expense of $264,000 for the six month
period. As of December 31, 1999, there are potentially 4.81 million options that
were issued in the Conversion that will vest in future periods, the total number
9
<PAGE>
of which may decrease as a result of employee turnover. As these options vest,
non-monetary expenses will be recorded in future periods based on the difference
between the option price and the market price on the vesting date. The
anti-dilution provision has been deleted from the Plan with certain exceptions,
such as stock splits.
Interest expense decreased $48,000, or 35.5%, to $87,000 for the six month
period ended December 31, 1999 from $135,000 in the same period in the prior
year as a result of the conversion of the 6% Notes. Depreciation and
amortization increased $52,000, or 136.8%, to $90,000 in the first half of the
current year from $38,000 in the six month period ended December 31, 1998,
primarily due to depreciation on leasehold improvements, furniture, fixtures and
equipment purchases.
Three Months Ended December 31, 1999 and 1998
During the quarter ended December 31, 1999, sales were approximately $2.55
million, compared to sales of $1.01 million for the three months ended December
31, 1998, an increase of $1.54 million or 152.7%. The gross margin for the three
months ended December 31, 1999 was approximately 52% compared to a gross margin
of approximately 43% in the prior year period, which had been negatively
impacted by discounts in sales prices as a means of introducing the Company's
product in targeted jurisdictions.
Selling, general and administrative expenses increased $359,000, or
approximately 34%, to $1.41 million for the three months ended December 31, 1999
from $1.05 million in the same period in the prior year. Payroll and payroll
related expenses were approximately $714,000 for the quarter ended December 31,
1999, reflecting an increase of approximately $151,000, or 26.8%, over the prior
year period. This increase in payroll and payroll related expenses was primarily
due to increased staffing in the areas of customer service, engineering labor
associated with product adaptation to certain slot machine physical
configurations, and an increase in administrative payroll.
Other selling, general and administrative expenses increased approximately
$156,000, or 27.3%, during the three month period ended December 31, 1999, to
$726,000, from $570,000 in the quarter ending December 31, 1998. This was
primarily due to increases of approximately $96,000 in the reserve for inventory
obsolescence and $50,000 in utilities and facilities rent. The increase in the
reserve for inventory obsolescence was the result of improvements made to
certain of the Company's weighing mechanisms which significantly impacted the
carrying value of certain inventory items. The increase in utilities and
facilities rent was due to the additional costs associated with the larger
facility the Company moved into in November 1998 and the leasing of a second
warehouse/production facility in September 1999. Other general and
administrative expenses in the current year period are generally higher than the
prior year period due to increased staffing and sales activities.
Research and development expenses were $27,000 for the quarter ended December
31, 1999 compared to $79,000 in the same period in the prior year, a decrease of
65.8%. Management anticipates the research and development expenses will
increase in future periods as the Company endeavors to expand its product line.
Non-monetary stock option compensation expense, as described above in the
comparison of operations for the six month periods ended December 31, 1999 and
1998, was $148,000 for the quarter ended December 31, 1999.
Interest expense decreased to $59,000 for the quarter ended December 31, 1999
from $71,000 in the same period in the prior year as a result of the conversion
of the 6% Notes. Depreciation and amortization increased to $49,000 in the three
month period ended December 31, 1999 from $27,000 in the prior year's quarter,
an increase of 81.4%, primarily due to depreciation on leasehold improvements,
furniture, fixtures and equipment purchases.
10
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Liquidity and Capital Resources
Sales during the quarter ended December 31, 1999 were $2.55 million, with a net
loss of $353,000 after deducting non-monetary stock option compensation expense
of $148,000 and depreciation and amortization expense of $49,000. In the
immediately preceding quarter ended September 30, 1999, sales were $1.50 million
with a net loss of $1.03 million after deducting non-monetary stock option
compensation expense of $116,000 and depreciation and amortization expense of
$41,000.
The Company's current assets at December 31, 1999 totaled $4.36 million,
including $341,000 in cash and cash equivalents, $1.30 million in accounts
receivable, $531,000 in deposits on pending inventory purchases, and $2.01
million in inventory. The Company's current liabilities were $2.81 million,
including $1.33 million in accounts payable, $95,000 in accrued interest due
stockholder, $90,000 in accounts payable to stockholder, $191,000 in the current
portion of long-term debt, $120,000 of which was in loans from stockholder, and
$479,000 in deposits from customers. Net cash used in operating activities was
approximately $2.31 million. References to stockholder herein refers to Malcolm
C. Davenport V, a director of the Company and beneficial holder of 46.5% of the
Company's Common Stock.
As previously noted, the Company's initial sales and marketing activities
commenced in the latter stages of the fiscal year ended June 30,1998. Absent
significant revenues from operations, the Company has funded itself primarily
through equity and debt financing, including through the issuance of the
Preferred Stock and 6% Secured Convertible Notes, and through additional loans
from Mr. Davenport.
On August 31, 1999, Mr. Davenport provided a letter agreement to the Company
whereby Mr. Davenport agreed to loan the Company up to $2.00 million during the
next twelve months. During the six months ended December 31, 1999, the Company
borrowed $1.80 million under this letter agreement. As of February 5, 2000, the
Company had borrowed the $2.00 million available under this letter agreement,
plus an additional $200,000. The Company is currently in negotiations with Mr.
Davenport to formalize and increase the amount available under the letter
agreement.
Based on recent and projected sales activities, and in anticipation of being
able to increase the amount of credit available from Mr. Davenport, management
believes that it will have sufficient capital to fund future operations. In
addition, the Company is pursuing other potential debt and/or equity financing
arrangements. No assurance can be given that the Company will be successful in
its negotiations with Mr. Davenport or in its pursuit of raising operating
capital through other debt or equity financing arrangements.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None
ITEM 2. Changes in Securities
None
ITEM 3. Defaults upon Senior Securities
None
ITEM 4. Submission of Matters to a Vote of Security Holders
a) On December 8, 1999, the Company held its 1999 Annual Meeting of
Stockholders in Las Vegas, Nevada, to consider (i) the re-election
of Malcolm C. Davenport V to serve as a Class II director until
the 2002 Annual Meeting and (ii) the ratification of Joseph
Decosimo & Company, LLP as the Company's independent public
accountants for fiscal year 2000.
The following reflects the votes electing Mr. Davenport and ratifying
Decosimo & Company at the 1999 Annual Meeting:
Votes Withheld or
Proposals Voted For Votes Against Abstentions
--------- --------- ------------- -----------
Malcolm C. Davenport
Class II Director 91,091,662 203,253
Ratify the selection of
Joseph Decosimo & Co., LLP 91,002,214 219,051 73,650
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SPINTEK GAMING TECHNOLOGIES, INC.
Date: February 10, 2000 By: /s/ GARY L. COULTER
--------------------
Gary L. Coulter
Chairman of the Board,
Chief Executive Officer
Date: February 10, 2000 By:/s/ GEORGE P. MILLER
-----------------------------
George P. Miller
Chief Financial Officer
(Principal Financial
and Accounting Officer)
13
<PAGE>
EXHIBIT INDEX
Exhibit Index Description Page Number
- ------------- ----------- -----------
27.1 Financial Data Schedule E - 10
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 341
<SECURITIES> 0
<RECEIVABLES> 1,295
<ALLOWANCES> 0
<INVENTORY> 2,055
<CURRENT-ASSETS> 4,358
<PP&E> 623
<DEPRECIATION> 183
<TOTAL-ASSETS> 5,842
<CURRENT-LIABILITIES> 2,807
<BONDS> 2,601
0
0
<COMMON> 295
<OTHER-SE> 139
<TOTAL-LIABILITY-AND-EQUITY> 5,842
<SALES> 4,046
<TOTAL-REVENUES> 4,046
<CGS> 2,029
<TOTAL-COSTS> 2,029
<OTHER-EXPENSES> 3,338
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 87
<INCOME-PRETAX> (1,379)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,379)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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