BINGO & GAMING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
QUARTERS ENDED MARCH 31, 1999 AND 1998
<PAGE>
U.S. Securities and Exchange Commission
Washington, D. C. 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 MARCH 31, 1999
--------------
[ ] 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
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BINGO & GAMING INTERNATIONAL, INC.
----------------------------------
OKLAHOMA 73-1092118
- ---------------------------------- ----------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER I.D. NO.)
INCORPORATION OR ORGANIZATION)
13581 Pond Springs Rd. Suite 105
Austin, Texas 78729
--------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
ISSUER'S TELEPHONE NUMBER: (512) 335-0065
---------------
Indicate by check whether the Issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act 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.
(1) Yes X No (2) Yes X No
-- --
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-QSB
or any amendment to this Form 10-QSB. [ ]
There were 8,551,819 shares of common stock, $.001 par value, outstanding as of
March 31, 1999.
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TABLE OF CONTENTS
Page
Number
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Part I:
Item 1. Financial Statements. . . . . . . . . . . . . . . . 1
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Item 2. Management=s Discussion and Analysis. . . . . . . . 6
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Part II:
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . 9
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Item 2. Changes in Securities . . . . . . . . . . . . . . . 9
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Item 3. Defaults Upon Senior Securities . . . . . . . . . . 9
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Item 4. Submission of Matters to a Vote of Security Holders 9
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Item 5. Other Information . . . . . . . . . . . . . . . . . 9
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Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . 9
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PART I
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BINGO & GAMING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
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MARCH 31, 1999 DECEMBER 31, 1999
1999 1998
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<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,853 $ 133,184
Accounts receivable - trade, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 513,994 437,850
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,866 87,169
---------------- -------------------
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,074 15,874
---------------- -------------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732,787 674,077
---------------- -------------------
Property and equipment, at cost - net. . . . . . . . . . . . . . . . . . . . . . . . . 1,274,232 1,357,187
---------------- -------------------
Other assets:
Organizational costs and intangible assets - net . . . . . . . . . . . . . . . . . . . 6,451 6,451
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,521 122,572
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,904 32,707
---------------- -------------------
Total other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,876 161,730
---------------- -------------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,151,895 $ 2,192,994
================ ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------
Current liabilities:
Accounts payable - trade and accrued expenses. . . . . . . . . . . . . . . . . . . . . $ 336,605 $ 294,918
Current maturities of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 131,547 142,962
Current maturities of lease obligations. . . . . . . . . . . . . . . . . . . . . . . . 539,110 452,892
---------------- -------------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,007,262 890,772
Long-term debt, net of current maturities. . . . . . . . . . . . . . . . . . . . . . . 244,144 268,701
Long-term portion of lease obligations . . . . . . . . . . . . . . . . . . . . . . . . 280,191 479,071
---------------- -------------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,531,597 1,638,544
---------------- -------------------
Stockholders' equity:
Common stock, $.001 par; 70,000,000 shares authorized; 8,551,819 and 8,558,418,6021,5
8,551,819 and 8,551,819 issued and outstanding. . . . . . . . . . . . . . . . . . . . 8,551 8,551
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 643,757 643,757
Retained earnings (deficit). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,010) (97,858)
---------------- -------------------
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 620,298 554,450
---------------- -------------------
Total liabilities and stockholders' equity. . . . . . . . . . . . . . . . . . . . $ 2,151,895 $ 2,192,994
================ ===================
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
1
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BINGO & GAMING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31
1999 1998
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Revenue:
Phone card sales . . . . . . . . . . . . . $1,157,341 $ 969,369
Hall rental and concession income. . . . . 143,237 137,619
Machine sales. . . . . . . . . . . . . . . 14,500 38,265
Other. . . . . . . . . . . . . . . . . . . 40,515 6,180
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Total revenue . . . . . . . . . . . . 1,355,593 1,151,433
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Cost of revenue:
Phone cards and royalties. . . . . . . . . 292,533 203,075
Machine and location rental. . . . . . . . 11,138 135,308
Prizes paid. . . . . . . . . . . . . . . . 488,883 86,117
Hall rental. . . . . . . . . . . . . . . . 67,743 54,252
Machine depreciation . . . . . . . . . . . 71,656 -
Machines sold. . . . . . . . . . . . . . . 12,496 33,320
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Total cost of revenue . . . . . . . . 944,449 512,072
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Gross margin . . . . . . . . . . . . . . . 411,144 639,361
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Expenses:
Operating expenses . . . . . . . . . . . . 1,539 62,703
Salaries . . . . . . . . . . . . . . . . . 142,176 86,739
General and administrative expenses. . . . 109,974 85,235
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Total expenses. . . . . . . . . . . . 253,689 234,677
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Operating income . . . . . . . . . . . . . 157,455 404,684
Other income and expense:
Interest expense . . . . . . . . . . . . . (91,607) (12,394)
----------- -----------
Net income before federal income tax . . . 65,848 392,290
Deferred federal income tax. . . . . . . . - (55,100)
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Net income . . . . . . . . . . . . . . . . 65,848 337,190
Retained earnings:
Beginning (deficit) . . . . . . . (97,858) (224,504)
----------- -----------
Ending (deficit). . . . . . . . . $ (32,010) $ 112,686
=========== ===========
Basic and diluted income per common share. $ 0.01 $ 0.04
=========== ===========
Weighted average shares outstanding. . . . 8,551,819 8,454,557
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</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
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BINGO & GAMING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31
1999 1998
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<S> <C> <C>
Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . $ 65,848 $ 337,190
Adjustments to reconcile net income to net cash from
Depreciation and amortization. . . . . . . . . . 88,070 42,723
Deferred financing cost. . . . . . . . . . . . . 16,051 -
Changes in current assets and liabilities:
Accounts receivable. . . . . . . . . . . . . . . (76,144) (499,941)
Inventories. . . . . . . . . . . . . . . . . . . (67,701) (8,330)
Prepaid expenses . . . . . . . . . . . . . . . . 3,603 (12,094)
Deferred federal income. . . . . . . . . . . . . - 55,100
Accounts payable - trade and accrued expenses. . 41,689 269,204
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Net cash from operating activities . . . . . . . . . 71,416 183,852
---------- ----------
Investing activities:
Purchase of property and equipment . . . . . . . . . (5,111) (98,878)
Increase in other assets . . . . . . . . . . . . . . - 5,473
---------- ----------
Cash used by investing activities. . . . . . . . . . (5,111) (93,405)
---------- ----------
Financing activities:
Payments on long-term debt . . . . . . . . . . . . . (148,636) (39,006)
Issuance of common stock . . . . . . . . . . . . . . - 44,930
---------- ----------
Cash used (provided) by financing activities. . . . (148,636) 5,924
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Net increase(decrease) in cash and cash equivalents. (82,331) 96,371
Cash and cash equivalents at beginning of year . . . 133,184 53,934
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Cash and cash equivalents at end of year . . . . . . $ 50,853 $ 150,305
========== ==========
Supplemental disclosures of cash flow information:
Interest paid. . . . . . . . . . . . . . . . . . . . $ 91,607 $ 12,394
========== ==========
Taxes paid . . . . . . . . . . . . . . . . . . . . . $ 6,304 $ 10,000
========== ==========
Supplemental disclosure of non-cash investing and
financing activities:
Proceeds from financing of equipment purchases . . $ - $ 605,784
========== ==========
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
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BINGO & GAMING INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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NATURE OF BUSINESS AND BASIS OF PRESENTATION:
Bingo & Gaming International, Inc. (the "Company") was formed in 1981 and was
dormant from 1984 to November, 1994. In December, 1994, the Company acquired
Monitored Investment, Inc., and Affiliates (Monitored Investment, Inc., Red
River Bingo, Inc., Tupelo Industries, Inc., and Meridian Enterprises, Inc.,
hereinafter referred to collectively as "Monitored"). Monitored's principal
operations consist of developing, managing and operating charity bingo
entertainment centers. Monitored is a commercial lessor of bingo facilities to
charity lessees which utilize bingo events as a means of fund raising. The
stockholders of Monitored became the controlling stockholders of the
consolidated company in a transaction viewed as a "reverse acquisition", whereby
each of the corporations comprising Monitored became wholly-owned subsidiaries
of the Company. As a result, the merger was accounted for as an "equity
restructuring" of Company.
In May, 1996, the Company began distributing the Lucky Shamrock Emergency Phone
Card Dispenser, under an exclusive agreement with Diamond Game Enterprises.
This agreement was terminated by the mutual consent of the parties in October
1997.
In October 1997, PrePaid Plus, Inc. ("PPI"), a Texas corporation, was acquired
under the purchase method. PPI is a wholly owned subsidiary of the Company.
PPI was formed for the purpose of transacting the prepaid telephone card
dispenser operations. PPI began distributing and selling the Lucky Strike Phone
Card Dispenser, a video enhanced prepaid phone card dispenser, under an
exclusive distribution agreement for five years with two successive five year
options to renew with Cyberdyne Systems, Inc.
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
INVENTORIES:
Inventories, which consist of phone cards, prepaid vending machines, and small
equipment are valued at the lower of cost or market using the first-in,
first-out method.
CASH EQUIVALENTS:
Cash equivalents consist primarily of funds invested in short-term
interest-bearing accounts. The Company considers all highly liquid investments
purchased with initial maturities of three months or less to be cash
equivalents.
ORGANIZATIONAL COSTS AND INTANGIBLE ASSETS:
Organizational costs and intangible assets include significant expenses of
bringing new locations into operation and the cost of a noncompete agreement.
Organizational costs are amortized over periods of not more than five years and
the cost of the noncompete agreement is being amortized over five years.
PROPERTY, EQUIPMENT AND DEPRECIATION AND AMORTIZATION:
Property and equipment are stated at cost, net of accumulated depreciation and
amortization. For financial statement purposes, depreciation and amortization
are computed using the straight-line method over the estimated useful lives of
the related assets. Amortization of leasehold improvements is computed using
the straight-line method over the shorter of the term of the related lease or
the useful life of the leasehold improvements. Accelerated depreciation methods
are used for tax purposes.
4
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BINGO & GAMING INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999
Maintenance and repairs are charged to expense as incurred. The cost of
betterments and renewals are capitalized. Gains or losses upon disposal of
assets are recognized in the period during which the
transaction occurs.
TAXES ON INCOME:
The Company accounts for income taxes under the asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. In estimating future tax
consequences, the Company generally considers all expected future events other
than possible enactments of changes in the tax laws or rates. The Company
provides a valuation allowance against its deferred tax assets to the extent
that management estimates that it is not "more likely than not" that such
deferred tax assets will be realized.
REVENUE RECOGNITION:
Phone card and machine sales as well as rental income are recognized when
earned. An allowance for doubtful accounts is provided based on periodic review
of the accounts.
ACCOUNTING ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent 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.
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS.
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PLAN OF OPERATION
- -------------------
In October 1997, the Company executed an exclusive distribution agreement with
Cyberdyne Systems, Inc. to distribute the Lucky Strike Prepaid Phone Card
Dispenser. This agreement provides for the Company to have the exclusive
distribution rights for North America for five years with two five year options.
Distribution of the Lucky Strike Prepaid Phone Cards began in October 1997, and
by March 31, 1998, over 275 dispensers were in locations in Texas, Oklahoma and
Washington. As of May 15, 1999, the Company had 325 dispensers in operation in
Texas, Oklahoma, Arizona, California, Illinois, Idaho, Connecticut, and
Pennsylvania, andNorth Dakota.
The Company intends to further develop and expand operations by focusing on
upgrading the locations of existing machines that are owned as well as focus
during the next quarter on selecting distributers for California, and Ohio.
The Company executed an exclusive distribution contract for the state of North
Dakota. Additional machines have been placed in Texas, where the Legislature
continues to move toward the passage of a bill to restrict certain devices that
compete in the same market. Such a bill has passed the Senate and is being
considered by the Texas House of Representatives. The Governor has indicated
that he supports and would sign the legislation if it passes. The expansion of
the Texas market and addition of other states has facilitated the optimal
placement of machines owned by the Company, and this effort will be continued as
additional dispensers are relocated from Oklahoma.
In order to diversify its product line, the Company secured exclusive
distribution rights for the Cyberdyne finite pull tab dispenser for Ohio. The
Company is currently performing a market test on this machine and negotiating a
distribution agreement.
At the present level of dispensers currently in operation, the Company
anticipates substantially increased earnings in the 1999 Fiscal Year. The rate
of growth will depend on the availability of either borrowing or leasing
opportunities, and the number of dispensers it can sell directly to retail
operators.
The gross margin for the quarter ended March 31, 1999, was $411,144 or 30.3% of
sales for that period as compared to the gross margin for the three months ended
March 31, 1998 of $639,361 or 55.5%. This decrease is a result of increased
cost of long distance phone time and a significant decrease in gross margin
related to testing Company operated machines during the first quarter of 1999
with increased sweepstakes prizes paid. The Company is replacing this format
with a new sweepstakes payout that will result in higher margins that should
maintain the same level of product sales. This decrease is the result of
increased cost of long distance phone time and a significant decrease in gross
margin related to the Company's testing during the first quarter of 1999 of a
promotional sweepstakes game with a higher ratio of prizes awarded. This new
sweepstakes game failed to produce prize structures which it believes will
result in similar levels of phone card sales.
RESULTS OF OPERATIONS
- -----------------------
Quarter ended March 31, 1999
Compared with Quarter ended March 31, 1998
The Company experienced an overall increase of 18.84% in total revenues from
sales during the three months ended March 31, 1999, over the quarter ended March
31, 1998. Revenues include rental income from charitable organizations that
lease the Company's bingo facilities as well as the related concession and
vending income. In addition, phone card activities produced revenues from the
sale of machines and phone cards as well as rents from machines.
6
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The major revenue source for the Company for the quarters ended March 31, 1999
and 1998, is from the sale of phone cards. Sales for the quarter ended March
31, 1999, are $1,157,341 compared to $969,369 for the quarter ended March 31,
1998. This represents an increase of $187,972 or 19.39%. This increase results
from the Company's program to upgrade machine locations to optimize sales.
Rental and concession income from charity bingo locations has remained
relatively consistent at $143,237 for the quarter ended March 31, 1999, as
compared to $124,794 for the quarter ended March 31, 1998. However, income from
this segment of the Company's operations is diminishing as a function of overall
sales as a result of the increased focus of the Company on the prepaid phone
card activities.
Cost of revenues represent expenses directly attributable to the operations of
the phone card dispensers and operations of the bingo facilities. In total,
such cost was $919,746 and $512,072 for the quarters ended March 31, 1999, and
1998, respectively. The cost of revenues has increased by $407,674 or 79.61%.
The components of cost of revenues for the phone card segment consist of the
cost of phone cards and royalties/commissions, machines, prizes paid, and
machine rental. The cost of phone cards, royalties/commissions, and prizes paid
as a percent of the phone card sales for the quarter ended March 31, 1999, as
compared to the quarter ended March 31, 1998, increased by approximately 79.6%.
This increase results from a market test to increase the sweepstakes prizes on
certain machines that the Company directly operates in Austin and San Antonio,
Texas, locations. Prizes paid during the quarter ended March 31, 1999, were
$488,883 as compared to $86,117 for the quarter ended March 31, 1998, or an
increase of 467.70%. In addition, the Company did not own any machines during
the quarter ended March 31, 1998. Therefore, depreciation expense of $71,656
for the quarter ended March 31, 1999, represents a 100% increase; however,
machine rent decreased by $124,170 during the first quarter of 1999 as compared
to the first quarter 1998 resulting from the aforementioned purchase of the
machines.
The components of cost of revenues for the charity bingo facilities leasing
segment consist of the rental cost of such facilities as well as supplies. The
cost of such rental increased by $13,491 for the quarter ended March 31, 1999,
as compared to the quarter ended March 31, 1998, as the result of increases in
lease costs for two of the three bingo locations.
Operating expenses for the Company consist primarily of advertising, travel,
repairs and maintenance, auto expense, registration fees, and business
promotion. Operating expenses for the quarter ended March 31, 1999 were $1,539
as compared to $62,703 for the quarter ended March 31, 1998. This resulted in
an decrease of $61,164 (or 97.54%) in operating expenses. This decrease is the
result of decreases in travel, small tools, advertising, freight, registration
fees, and a reduction in the allowance for uncollectible accounts.
General and administrative expense consists of rent, consultant services,
director's liability insurance, computer maintenance, legal expense, accounting
services, office supplies and depreciation. This category of expense increased
to $109,974 for the quarter ended March 31, 1999, from $85,235 for the
comparable period. This represents an increase of $24,739 or 29.02% due to
increased costs for lobbying, development of a database to facilitate the
tracking of individual machine production, and implementation of a new computer
network.
Salaries and benefits increased by $55,437 or 63.91% for the quarter ended March
31, 1999, amounting to $142,176 as compared to $88,739 for the quarter ended
March 31, 1998. This increase is related to pay increases for employees and
increased costs of insurance and other benefits as well as the hiring of a Chief
Financial Officer, two additional full-time technicians, and a secretary.
In summary, net income for the quarter ended March 31, 1999, is $65,848 as
compared to $392,290 for the quarter ended March 31, 1998, representing a
decrease of $326,436 or 83.21%.
LIQUIDITY
- ---------
7
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As of March 31, 1999, the Company's total assets were $2,151,895 as compared to
$2,192,994 for the year ended December 31, 1998. In addition, total liabilities
at March 31, 1999, were $1,531,597 as compared to $1,638,544 at December 31,
1998. Current assets as of March 31, 1999, of $732,787 and $434,713 as of
December 31, 1998, represent 72.75% and 75.7% of current liabilities of
$1,007,262 and $890,772, respectively. The Company's cash position has
diminished since fiscal year end due to the write off of obsolete inventory in
the amount of $22,250, returns credited to accounts receivable recorded at
fiscal year end for overcharges, and replacement of parts under warranty in
machines from inventory. The Company is currently negotiating to refinance the
remaining high cost capital leases used to finance machine purchases in the
previous fiscal year. The Company's liabilities at March 31, 1999, of
$1,531,597 consist of $819,301 of a fully secured capital lease obligation,
$336,605 of current liabilities consisting of accounts payable and accrued
expenses, and $375,691 of long-term debt.
During the quarter ended March 31, 1999, the working capital deficit was
$274,475 as compared to a working capital surplus of $487,034 for the quarter
ended March 31, 1998. The balances of accounts payable and accrued expenses
increased by $41,687 and accounts receivable increased by $76,144 for the
comparative quarters. As of March 31, 1999, the Company was delinquent on
$109,102 or 34.48 % of total accounts payable.
The Company has a need for additional working capital to meet contractual
obligations. Management believes that revenues from the existing machines owned
by the Company will be sufficient to produce the necessary working capital to
meet its working capital requirements. However, there is no assurance that such
revenues will materialize.
8
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
-------------------
In 1998, the Mississippi Gaming Commission rendered a decision to reject an
appraisal on the fair market value of rents charged at the Tupelo bingo
facility. A permanent injunction was obtained requiring the Gaming Commission
to renew the Company's license to operate as a lessor. The Commission was
ordered to accept the two appraisals already submitted and received a contempt
of court citation. Subsequently, the Commission issued a license renewal for
the Iuka location and has appealed the injunction o the license renewal for the
Tupelo location. In addition, the Commission declined to renew a third facility
license for the Meridian location, but the facility has continued to operate
pending the results of a hearing whose date has yet to be determined. Finally,
the Commission has denied a renewal application for the charitable lessee of the
Iuka facility. This matter is being vigorously appealed by the charity.
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.
-------------------
The Company is currently evaluating its computer systems to determine whether
modifications and expenditures will be necessary to make its systems and those
of its vendors compliant with year 2000 requirements. These requirements have
arisen due to the widespread use of computer programs that rely on two-digit
date codes to perform computations or decision-making functions. Many of these
programs may fail as a result of their inability to properly interpret date
codes beginning January 1, 2000. For example, such programs may interpret A00"
as the year 1900 rather than 2000. In addition, some equipment, being controlled
by microprocessor chips, may not deal appropriately with the year A00". The
Company believes it will timely meet its year 2000 compliance requirements and
does not anticipate that the cost of compliance will have a material adverse
effect on its business, financial condition, or results of operations. However,
there can be no assurance that all necessary modifications will be identified
and corrected or that unforseen difficulties or costs will not arise. In
addition, there can be no assurance that the systems of other companies on which
the Company's systems rely will be modified on a timely basis, or that the
failure by another company to properly modify its systems will not negatively
impact the Company's systems or operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------------
(a) EXHIBIT
-------
Annual Report on Form 10 - KSB for the year
ended December 31, filed April 15, 1999 **
**This document and related exhibits have been previously filed with te
Securities and Exchange Commission and by this reference are incorporated
herein.
9
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SIGNATURES
Pursuant to the requirements of Section 13 or 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.
BINGO & GAMING INTERNATIONAL, INC.
Date: 5/17/99 By /s/ Reid Funderburk
-------- ------------------------------------------
Reid Funderburk, CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Date: 5/17/99 By /s/ Reid Funderburk
-------- ------------------------------------------
Reid Funderburk, Chairman, C.E.O. & Director
Date: 5/17/99 By /s/ George Majewski
-------- ------------------------------------------
George Majewski, Director, President
Date: 5/17/99 By /s/ Rhonda McClellan
-------- ------------------------------------------
Rhonda McClellan, Chief Financial Officer
Date: 5/17/99 By /s/ R. E. Wilkin
-------- ------------------------------------------
R. E. Wilkin, Director
Date: 5/17/99 By /s/ Robert H. Hughes
-------- ------------------------------------------
Robert H. Hughes, Director
Date: 5/17/99 By /s/ Rick Redmond
-------- ------------------------------------------
Rick Redmond, Director
10
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