SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Six Months Ended December 31, 1999
Commission File Number: 0-9047
GLOBAL GAMING AND TECHNOLOGY, INC.
------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
Delaware 02-0314487
- ------------------------------- ----------------------------
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
2575 South Highland Drive, Las Vegas, Nevada 89109
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 702/732-1414
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 12 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
X YES NO
As of December 31, 1999, there was issued and outstanding 26,378,577 shares
of Common Stock of Registrant. The aggregate market value of the shares of
Common Stock held by non-affiliates (without admitting that any person whose
shares are not included in determining such value is an affiliate) was not
available because the prices for such shares are not quoted by the National
Association of Securities Dealers through NASDAQ, its automated system for
reporting quotes.
<PAGE>
Global Gaming and Technology, Inc.
Form 10-Q
Quarter Ended December 31, 1999
TABLE OF CONTENTS
PART I - Financial Information: Page
- --------------------------------
Item I - Financial Statements
Balance Sheet 4
Statement of Operations and Deficit 5
Statement of Cash Flows 6
Summary of Significant Accounting Policies
and Notes to Financial Statements 7-9
Item II - Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 10
PART II - Other Information: 11
- ----------------------------
Item 1 - Legal Proceedings.
Item 2 - Changes in Securities.
Item 3 - Defaults upon Senior Securities.
Item 4 - Submission of Matters to a vote of security holders.
Item 5 - Related Party Transactions.
Item 6 - Exhibits and Reports on Form 8-K.
- 2 -
<PAGE>
PART I
Global Gaming and Technology, Inc.
Financial Statements
December 31, 1999
- 3 -
<PAGE>
<TABLE>
Global Gaming and Technology, Inc.
Balance Sheet
December 31, 1999 and June 30, 1999
<CAPTION>
Dec 31 June 30
1999 1999
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 30,905 $ 50,700
Inventories (Note 5) 4,000 4,000
----------- -----------
Total Current Assets 34,905 54,700
----------- -----------
OTHER ASSETS
Deposits 300 300
----------- -----------
Total Other Assets 300 300
----------- -----------
TOTAL ASSETS $ 35,205 $ 55,000
=========== ===========
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES
Accounts Payable $ 9,942 $ 10,650
Accrued Interest 1,150,397 1,115,397
Notes Payable (Note 4) 860,935 860,935
----------- -----------
Total Current Liabilities 2,021,274 1,986,982
----------- -----------
STOCKHOLDER'S DEFICIENCY (Note 6)
Preferred Stock, $.01 par value,
1,000,000 Shares Authorized,
none issued. -0- -0-
Common Stock, $.01 par value,
27,000,000 Shares Authorized,
26,378,577 Shares Issued
(Including 51,382 held in the
company name at no cost). 263,786 263,786
Paid in Capital in excess of
par value 3,395,062 3,395,062
Accumulated Deficit (5,644,917) (5,590,830)
----------- -----------
Total Stockholder's Deficit (1,986,069) (1,931,982)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDER'S DEFICIT $ 35,205 $ 55,000
=========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
- 4 -
</TABLE>
<PAGE>
<TABLE>
Global Gaming and Technology, Inc.
Statement of Operations and Deficit
For the Three Months Ended December 31, 1999 and 1998
And the Six Months Ended December 31, 1999 and 1998
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31 December 31 December 31
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUE AND INCOME $ -0- $ -0- $ -0- $ -0-
------------ ------------ ------------ ------------
Total Income -0- -0- -0- -0-
------------ ------------ ------------ ------------
COSTS AND EXPENSES
Professional Fees 2,819 4,890 6,663 7,990
Interest 17,500 17,500 35,000 35,000
Transfer Fees 774 750 1,524 1,500
Salaries and Wages 4,875 4,875 9,750 9,750
Payroll Tax Expense 517 499 1,061 1,057
Miscellaneous 50 137 89 87
Total Costs ------------ ------------ ------------ ------------
and Expenses 26,535 28,651 54,087 55,384
------------ ------------ ------------ ------------
Net Income (Loss) (26,535) (28,651) (54,087) (55,384)
Deficit Beginning
of Period (5,618,382) (5,482,515) (5,590,830) (5,455,782)
------------ ------------ ------------ ------------
Deficit End of Period (5,644,917) (5,511,166) (5,644,917) (5,511,166)
============ ============ ============ ============
Loss per Common Share $ (.001) $ (.001) $ (.002) $ (.002)
============ ============ ============ ============
Weighted Average Number of
Common Shares Outstanding 26,378,577 26,378,577 26,378,577 26,378,577
============ ============ ============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
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</TABLE>
<PAGE>
<TABLE>
Global Gaming and Technology, Inc.
Statement of Cash Flows
For the Six Months Ended December 31, 1999 and 1998
(Unaudited)
<CAPTION>
Six Months Ended
December 31 December 31
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (54,087) $ (55,384)
(Increase) Decrease in
Notes Receivable -0- -0-
Inventory -0- -0-
Increase (Decrease) in
Accounts Payable (708) (11)
Accrued Interest Payable 35,000 35,000
----------- -----------
NET OPERATING CASH (19,795) (20,395)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures -0- -0-
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on Debt -0- -0-
----------- -----------
Net Increase (Decrease) in Cash (19,795) (20,395)
Cash Beginning of Period 50,700 79,606
----------- -----------
Cash End of Period $ 30,905 $ 59,211
=========== ===========
Supplemental Disclosures
Interest Expense $ 35,000 $ 35,000
=========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
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</TABLE>
<PAGE>
Global Gaming and Technology, Inc.
Notes to Financial Statements
December 31, 1999
NOTE 1 - Summary of Significant Accounting Policies:
- ----------------------------------------------------
Global Gaming and Technology, Inc. (The Company) was incorporated in the State
of Delaware in 1973 and has elected June 30 as its year end. The Company, al-
though dormant for the last several years, has been engaged in the research,
development, manufacture, and marketing of electronic gaming devices and coin-
less games of chance.
The preparation of financial statements in conformity with generally accepted
accounting prnciples requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of con-
tingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period.
NOTE 2 - Organization's Ability to Continue as a Going Concern:
- ---------------------------------------------------------------
The Company has been dormant for the past several years and lacks the resources
to be competitive in the gaming industry at the present time. As of December
31, 1999, the Company has negative workling capital of $1,986,369 and stock-
holders' deficit of $1,986,069.
The Company initiated a patent infringement case. The case is being appealed
by both parties. The manner in which the litigation is resolved is likely to
have significant financial impact on the Company.
NOTE 3 - Related Party Transactions:
- ------------------------------------
Notes payable at December 31, 1999 and 1998 consist of $841,491 due to stock-
holders bearing interest at 8% and 10% and are due on demand. Accrued interest
at December 31, 1999 and 1998 was $1,150,397 and $1,080,968 and the Company
incurrred interest expense of $17,500 and $17,500 in the three months then
ended. See "Note 4 - Notes Payable" for details.
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<PAGE>
Global Gaming and Technology, Inc.
Notes to Financial Statements
December 31, 1999
<TABLE>
NOTE 4 - Notes Payable
- ----------------------
<CAPTION>
Current Non-Current
Maturities Maturities Total
<S> <C> <C> <C>
Michael Wichinsky
Payable upon demand.
Interest payable
quarterly at 8% $ 511,644 $ - 0 - $ 511,644
Michael Wichinsky
Payable upon demand.
Interest payable
quarterly at 10% 105,490 - 0 - 105,490
Estate of William
T. O'Donnell, Sr.
Payable upon demand.
Interest payable
quarterly at 8% 224,357 - 0 - 224,357
State of New Jersey
Payable in monthly
installments of $1,363
including interest.
This note is in arrears. 19,444 - 0 - 19,444
---------- --------- ----------
TOTAL $ 860,935 - 0 - $ 860,935
========== ========= ==========
The Company incurred interest expense totaling $17,500 and $17,500 on these
notes during the three months ended December 31, 1999 and 1998, respectively.
</TABLE>
NOTE 5 - Inventories:
- ---------------------
The Company has inventory consisting of ten (10) slot machines from a settle-
ment arising out of litigation with Univeral Distributing of Nevada, Inc. Pur-
suant to SFAS 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of", the Company evaluated the recoverability
of the long-lived assets. Due to rapid changes in gaming technology, the mach-
ines did not hold their value. The estimated fair value was based on a recent
offer to purchse the machines.
- 8 -
<PAGE>
Global Gaming and Technology, Inc.
Notes to Financial Statements
December 31, 1999
NOTE 6 - Income Taxes:
- ----------------------
The benefit for income taxes is different than the amount computed by applying
the statutory federal income tax rate to net loss before taxes. A reconcilia-
tion of the net income tax benefit follows:
Three Months Ended
12/31/99 12/31/98
--------- ---------
Computed tax benefit at federal statutory rate $ 8,113 $ 8,307
Deferred income tax valuation allowance (8,113) (8,307)
--------- ---------
Provision for Federal Income Taxes $ 0 $ 0
========= =========
The Provision for federal income taxes consisted of the following:
12/31/99 12/31/98
--------- ---------
Current $ 0 $ 0
Deferred 0 0
--------- ---------
Total $ 0 $ 0
========= =========
The Deferred Tax Asset consisted of the following:
Tax Benefit of NOL carryforwards $ 888,293 $ 944,599
Valuation Allowance (888,293) (944,599)
--------- ---------
Net Deferred Tax Asset $ 0 $ 0
========= =========
The Company has a net operating loss carryforward ("NOL") for federal income
tax reporting purposes at June 30, 1999 of $2,862,047. A portion of the NOL
expires after each year. $276,972 will expire at June 30, 2000 if not utilized.
- 9 -
<PAGE>
ITEM II - Management's Discussion and
Analysis of Financial Condition
and Results of Operations
As of December 31, 1999, the Company had negative working capital of
$1,986,369. The Company has no commitments for capital expenditures.
As of December 31, 1999, the Company had stockholders' deficit of $1,986,069.
During the three months ended December 31, 1999, the Company realized no
revenues and incurred expenses of $26,535, $17,500 of which is accrued
interest expense.
Global Gaming and Technology, Inc. has been engaged in the design, manufacture
and marketing of electronic microprocessor-controlled gaming machines. The
Company, which was incorporated in Delaware in 1973, maintains its principal
offices at 2575 South Highland Drive, Las Vegas, Nevada 89109. No machines have
been manufactured during the three months ended December 31, 1999. The Com-
pany has been dormant for the past several years.
Patents expired at the end of July, 1995 and are the subjects of current
litigation pending a ruling by the court.
Primary North American markets for gaming devices are Las Vegas, Nevada, and
Atlantic City, New Jersey. The Company does not have the resources to apply
for licenses in Nevada and New Jersey nor is the Company pursuing sales in
smaller markets at the present time.
The gaming industry is highly competitive, and the Company is at a severe
competitive disadvantage because of its size and lack of resources. The
Company has not generated any sales in the last three months and does not
anticipate sales in the foreseeable future.
The Company employs one person on a part-time basis.
- 10 -
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
- --------------------------
The Company initiated a patent infringement case which is being appealed by
both parties. The manner in which the litigation is resolved is likely to have
significant financial impact on the Company.
ITEM 2 - Changes in Securities
- ------------------------------
None.
ITEM 3 - Defaults Upon Senior Securities
- ----------------------------------------
Not Applicable
ITEM 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None
ITEM 5 - Related Party Transactions
- -----------------------------------
Michael Wichinsky (19% stockholder) has a note to the Company with a current
balance of $511,644, 8% interest, payable on demand. Michael Wichinsky has a
second note to the Company in the amount of $105,490 (10% interest, payable
on demand). The Estate of William T. O'Donnell, Sr. (17% stockholder) has a
note to the Company with a current balance of $224,357, 8% interest, payable
on demand. There were no principal or interest payments on these notes during
the three months ended December 31, 1999. Accrued interest payable on these
notes as of December 31, 1999 amounts to $1,150,397, of which $1,120,942 is
payable to Wichinsky and $29,455 is payable to O'Donnell.
ITEM 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
On July 26, 1999 the Company reported that Bradshaw Smith & Co had been engaged
as the Company's Certified Public Accountants.
- 15 -
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or Section 15(d) 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.
GLOBAL GAMING & TECHNOLOGY, INC.
By: Mark Sarason Date:
------------------------------- ------------
Mark Sarason
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons as a majority of the
members of the Board of Directors of the registrant and in the capacities
and on the dates indicated.
By: Mark Sarason Date:
------------------------------ ------------
Mark Sarason, Director
By: Constance Koplow Date:
------------------------------ ------------
Cosntance Koplow, Director
- 12 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Jun-30-2000
<PERIOD-START> Oct-01-1999
<PERIOD-END> Dec-31-1999
<CASH> 30905
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 4000
<CURRENT-ASSETS> 34905
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 35205
<CURRENT-LIABILITIES> 2021274
<BONDS> 0
<COMMON> 263786
0
0
<OTHER-SE> (2249855)
<TOTAL-LIABILITY-AND-EQUITY> 35205
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 26535
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17500
<INCOME-PRETAX> (26535)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26535)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26535)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
