<PAGE>
U.S. Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ________
Commission File No. 0-10519
Bingo & Gaming International, Inc.
----------------------------------
(Name of Small Business Issuer in its Charter)
OKLAHOMA 73-1092118
-------- ----------
(State or Other Jurisdiction (IRS Employer ID No.)
of incorporation or organization)
11006 Metric Blvd.
Austin, Texas 78758
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(Address of Principal Executive Offices)
(512) 490-0065
--------------
(Issuer's Telephone Number, including Area Code)
8310 Capital of Texas Hwy. North Suite 350
Austin, Texas 78731
-------------------
(Former Address of Principal Executive Office)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 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.
(1) Yes X No (2) Yes X No
--- --- --- ---
There were 8,349,200 shares of common stock, $.001 par value, outstanding as
of June 30, 1996<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BINGO & GAMING INTERNATIONAL, INC.
BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 51,259 $ 74,062
Accounts receivables 35,257 43,606
Deferred offering cost 31,280 25,510
Prepaid expenses -0- 2,940
Inventory 19,035 - 0 -
Total current assets 136,831 146,118
Property and equipment, net 113,186 167,737
Deferreds and intangibles,
Net 46,263 56,187
Note receivable 64,613 83,000
Other assets 23,439 18,766
Total Assets $384,332 $471,808
LIABILITIES AND STOCKHOLDERS' EQUITY
Payables $ 85,040 $120,136
Accrued expenses 105 45
Current maturities of
long-term debt 120,334 117,054
Total current liabilities 205,479 237,235
Long-term debt 73,652 82,801
Common stock,
$.001 par value:
Authorized -
70,000,000 shares
Issued and outstanding -
8,349,200 shares 8,349 8,349
Additional paid-in capital 363,204 363,204
Accumulated deficit (266,352) (219,781)
Total stockholders'
equity 105,201 151,772
Total Liabilities
and Stockholders'
Equity $384,332 $471,808
See notes to financial statements.
/TABLE
<PAGE>
BINGO & GAMING INTERNATIONAL
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues $177,037 $134,978 $340,846 $261,251
Costs and expenses:
Salaries and wages 41,570 63,996 100,045 121,996
Operating exp. 133,537 93,980 220,871 156,039
General and admin.
expenses 41,232 31,095 59,402 61,236
Total costs and
expenses 216,339 189,071 380,318 339,271
Loss before int.
and income taxes (39,302) (54,093) (39,472) (78,020)
Interest expense 3,798 5,205 7,099 8,068
Loss before
income taxes (43,100) (59,298) (46,571) (86,088)
Income taxes -0- -0- -0- -0-
Net Loss $(43,100) $(59,298) (46,571) (86,088)
Net Loss per share * * * *
(* = less than $.01)
See notes to financial statements.
/TABLE
<PAGE>
BINGO & GAMING INTERNATIONAL, INC.
STATEMENTS OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (46,571) $(86,088)
Adjustments to net loss:
Depreciation and amortization 32,255 28,819
Loss on sale of equipment 3,825 -0-
Bad debt expense 25,200 -0-
Changes to current assets and
liabilities:
Receivables (16,851) 18,287
Prepaid expenses 2,940 ( 9,670)
Payables and accrued exp. (35,036) 3,675
Inventory (19,035) -0-
Net cash used for operating
activities (53,273) (44,977)
INVESTING ACTIVITIES
(Increase) decrease in property
and equipment 28,195 (78,014)
(Increase) decrease in deferreds
and other assets (10,243) 10,127
Decrease in notes receivable 18,387 - 0 -
Net cash provided by (used for)
investing activities 36,339 (67,887)
FINANCING ACTIVITIES
Proceeds from long-term debt 45,000 149,000
Payments on long-term debt (50,869) 13,748
Net cash provided by (used for)
financing activities ( 5,869) 135,252
CASH AND CASH EQUIVALENTS
Net increase (decrease) (22,803) 22,388
Balances at beginning of period 74,062 23,087
Balances at end of period $ 51,259 $ 45,475
See notes to financial statements.
</TABLE> <PAGE>
BINGO & GAMING INTERNATIONAL, INC.
NOTES TO THE FINANCIAL STATEMENTS
Note 1. BASIS OF PRESENTATION
The Company's consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in
consolidation.
Such financial statements as of June 30, 1996 and for the three months
ended June 30, 1996 and 1995 and for the six months ended June 30, 1996
and 1995 are unaudited, but, in management's opinion, include all
adjustments, consisting only of normal recurring adjustments, necessary
for a fair presentation of the results from such interim periods. The
results from interim periods are not necessarily indicative of results
from full years.
Such interim period financial statements, including the notes thereto, are
condensed and do not include all disclosures required by generally
accepted accounting principles. They should, therefore, be read in
conjunction with the Company's consolidated financial statements which
were included in the Company's Form 10-KSB for the year ended December 31,
1995.
Note 2. INCOME TAXES
The statutory federal tax rate was 34% for the six months ended June 30,
1996 and 1995. The effective tax rate was zero due to the Company
incurring a net tax operating loss for the six month ended June 30, 1996
and 1995. At June 30, 1996 and 1995, the Company had, for tax reporting
purposes, net operating loss carryfowards of approximately $245,000 and
$80,000, respectively, available to offset future taxable income.
Note 3. EARNINGS PER SHARE
Net loss per share is based upon the weighted average number of shares
outstanding during the periods (8,349,200 shares outstanding during the
six months ended June 30, 1996 and 8,050,000 during the six months ended
June 30, 1995).
MANAGEMENT'S DISCUSSION AND ANALYSIS
Introduction:
The Company discontinued operations in 1984. From then until December 15,
1994, it had no operations of significance. On December 15, 1994, the
Company acquired Monitored Investments, Inc., Red River Bingo, Inc.,
Tupelo Industries, Inc., and Meridian Enterprises, Inc. (collectively,
Monitored or the Monitored companies) in common stock for common stock
exchanges, whereby the stockholders of Monitored became the controlling
stockholders of the Company. Such acquisitions were treated as an equity
restructuring of the Company, which is similar to pooling-of-interests
treatment. The operations of Monitored were, therefore, retroactively
included in the operations of the Company.
Accordingly, during the three months ended March 31, 1995, the Company
operated three charity bingo facilities for itself (Shreveport, Louisiana,
Tupelo, Mississippi, and Meridian, Mississippi) and managed two other such
facilities (McAllen, Texas and Columbus, Mississippi) for two other
corporations which share some common stockholders with the Company.
During the three months ended June 30, 1995, the Company opened two
additional charity bingo centers: one in Kosciusko, Mississippi and one
in Iuka, Mississippi. Subsequently, the Company closed its Kosciusko
location because of less than expected attendance. Similarly, during the
three months ended March 31, 1996, the Company operated three charity
bingo facilities for itself (Iuka, Mississippi, Tupelo, Mississippi, and
Meridian, Mississippi) and managed two other such facilities (McAllen,
Texas and Columbus, Mississippi) for two other corporations which share
some common stockholders with the Company. During the three months ended
June 30, 1996, a officer/director of the Company divested himself of over
1,000,000 shares of stock thereby reducing his holdings in the Company to
less than 10% and relinquished his management and director's position in
the Company. In return for services rendered and release of the director's
employment contract, the Company issued stock options and transferred the
two management agreements (McAllen, Texas and Columbus, Mississippi) to
the director. Furthermore, in April 1996, the Company executed an
exclusive Distribution Agreement for the State of Texas for a video
enhanced dispenser to market one minute emergency phonecards. An initial
distribution of twenty-five units began in June 1996.
The Company intends to further develop and substantially expand its
business, principally by continuing its operation and expansion of the
distribution of the video enhance phonecard dispensers, by acquiring
existing bingo facilities (for cash or for notes or for its own stock or
in combinations thereof) and by establishing new bingo facilities. Its
ability to do so will be limited by its available liquidity and other
capital resources as to which no assurances can be given.
Results of Operations:
Three Months Ended June 30, 1996
Compared with Three Months Ended June 30, 1995
Revenues include rental income from the charitable organizations which
lease the Company's bingo facilities, management fees from managing
similar facilities for others, related concession and vending income, and
most recently phonecard sales related to the video enhanced dispensers.
Such income was $177,037 for the three months ended June 30, 1996 and
$134,978 for the three months ended June 30, 1995. The 31.2% increase was
in part due to the initial distribution of the twenty-five phonecard
dispensers in June 1996 which resulted in approximately $35,000 of
additional revenue. Furthermore, this increase was also the result of
opening a new bingo facility in Iuka, Mississippi on June 1, 1995.
Increased revenues were partially offset by a decrease in management fee
income related to transfer of the management agreements to the former
director as more fully described in the above "Introduction".
Costs and expenses include salaries and wages, other expenses directly
attributable to the operation of facilities, operation of the phonecard
dispensers and other general and administrative expenses. Such expenses
were $216,339 for the three months ended June 30, 1996 and $189,071 for
the three months ended June 30, 1995. The 14.4% increase was in part due
to the increase of operations from the initial distribution of the
phonecard dispensers and the result of greater rental cost due to periodic
increases stipulated in lease agreements. Furthermore, Company wrote off
approximately $25,000 in bad debts related to a charity which ceased
conducting bingo in the current year. Increases in such expenses were
partially offset by a decrease in salaries and wages related to the
director relinquishing his management position with the Company as more
fully described in the above "Introduction".
Principally for the reasons set forth in the two preceding paragraphs, the
Company had a net loss of $43,100 for the three months ended June 30, 1996
compared with a net loss of $59,298 for the three months ended June 30,
1995.
Six Months Ended June 30, 1996
Compared with Six Months Ended June 30, 1995
Revenues were $340,846 for the six months ended June 30, 1996 and
$261,251 for the six months ended June 30, 1995. The 30.5% increase was
principally the result of the matters more fully described in the above
"three months compared with three months" discussion.
Costs and expenses were $380,318 for the six months ended June 30, 1996
and $339,271 for the six months ended June 30, 1995. The 12% increase was
principally the result of the matters more fully described in the above
"three months compared with three months" discussion.
The Company had a net loss of $46,571 for the six months ended June 30,
1996 compared with a net loss of $86,088 for the six months ended June 30,
1995.
Financial Position:
During the six months ended June 30, 1996, the Company's equity decreased
by $49,776, such decrease being the result of the net loss for the six
months.
During this period, the Company increased borrowings from a director of
$45,000 to fund the initial distribution of the video enhanced phonecard
dispenser. However, the Company reduced by $35,000 the amount of its
accounts payable, paid off a $20,000 note and made scheduled payments of
other long term debt.
Furthermore, the Company renegotiated its $89,000 line of credit with a
local financial institution by making a $15,000 payment and placing the
balance of $74,000 on a ten year note at prime interest plus 2% with a
balloon payment due December 30, 2000.
A second note of $60,000, which had also been an interest only instrument,
was converted on January 10, 1996, to payments of $1,000 principal per
month plus interest at 10.5%.
Overall, the Company reduced its long term debt by approximately $6,000.
Liquidity:
The Company's net cash position at June 30, 1996 decreased approximately
$23,000 from what it was at December 31, 1995, primarily from the
Company's reduction of its accounts payable and long-term debt. The
Company intends to further develop and substantially expand its business,
principally by further expanding the distribution of the video enhanced
phonecard dispenser, by acquiring existing bingo facilities (for cash or
notes or its own stock or combination thereof) and by establishing new
bingo facilities.
The Company will, however, need to obtain additional financing to meet its
plans as mentioned above, and there is no assurance that the Company will
be able to obtain such additional financing.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
No further developments
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security
Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBIT EXHIBIT NUMBER
Financial Data 27
Schedule
(b) Reports on Form 8-K
None
SIGNATURES
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.
BINGO & GAMING INTERNATIONAL, INC.
Dated as of August 12, 1996 By /s/ Reid Funderburk
-------------------
Reid Funderburk
C.E.O., Director
By /s/ George Majewski
-------------------
George Majewski
President, Director
By /s/ Robert H. Hughes
--------------------
Robert H. Hughes
Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000355590
<NAME> BINGO & GAMING INTERNATIONAL, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 51,259
<SECURITIES> 0
<RECEIVABLES> 35,257
<ALLOWANCES> 0
<INVENTORY> 19,035
<CURRENT-ASSETS> 136,831
<PP&E> 113,186
<DEPRECIATION> 0
<TOTAL-ASSETS> 384,332
<CURRENT-LIABILITIES> 205,479
<BONDS> 0
0
0
<COMMON> 8,349
<OTHER-SE> 96,852
<TOTAL-LIABILITY-AND-EQUITY> 384,332
<SALES> 0
<TOTAL-REVENUES> 340,846
<CGS> 0
<TOTAL-COSTS> 380,318
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,099
<INCOME-PRETAX> (46,571)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,571)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
