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Previous: MERRILL LYNCH MUN INTERM TERM FD OF ML MUN SER TR, NSAR-B, EX-99.77ORULE10F-3, 2000-12-27 |
Next: INTERACTIVE GAMING & COMMUNICATIONS INC, 10-Q, EX-27, 2000-12-27 |
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 quarter ended September 30, 2000
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 33-7764-C
INTERACTIVE GAMING AND COMMUNICATIONS
CORP..
Exact name of registrant as specified in charter)
|
(State or other jurisdiction of incorporation or organization) |
23-2838676
(I.R.S. Employer Identification No.) |
4070 Butler Pike - Plymouth Meeting, PA 19462
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 941-0305
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities 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. Yes [X ] No [ ]
As of September 30, 2000, there were 23,084,903 shares of the Registrant's common stock outstanding. The aggregate market value of the Registrant's voting stock held by nonaffiliates of the Registrant was approximately $4,155,283 computed at the closing price for the Registrant's common stock on the NASD Bulletin Board on September 30,2000.
PART I. FINANCIAL STATEMENTS
In the opinion of the management of Interactive Gaming and Communications
Corp. and subsidiaries (the Company), the accompanying unaudited interim
consolidated financial statements contain all adjustments necessary of a fair
presentation of the Company's financial condition as of September 30, 2000 and
the results of its operations and cash flows for the nine month periods ended
September 30, 2000 and 1999.
The accompanying unaudited consolidated
financial statements have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and note disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to those rules and regulations, although the Company's management believes that
the disclosures and information presented are adequate and not misleading.
Reference is made to the detailed financial statement which should be read
in conjunction with this report and are contained in the notes to consolidated
financial statements included in the Company's Annual Report Form 10-KSB for the
year ended December 31, 1999. Certain items in prior financial statements
have been reclassified, where appropriate, to conform with the September 30,
2000 presentation.
|
CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2000 AND DECEMBER 31, 2000 | ||
| SEPT. 30 | DEC 31 | |
| 2000 | 1999 | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash | $0 | $444,407 |
| Accounts receivable, net of allowance for doubtful accounts of $89,606.77 in 1999 and $25,550 in 1999 |
122,972 | 451,445 |
| Other Receivable | 40,663 | 6,460 |
| Deferred Tax asset | 0 | 100,000 |
| Total current assets | 163,635 | 995,852 |
| EQUIPMENT, Net | 164,677 | 405,870 |
INTANGIBLE ASSETS: | ||
| Systems development costs, net | 1,392,250 | 1,448,110 |
| Gaming and software sub-licenses, net | - | 0 |
| Total intangible assets | 1,392,250 | 1,448,110 |
OTHER ASSETS: | ||
| Security deposits | 1,118 | 1,118 |
| Customer Receivable - Long Term Debt | 1,267,000 | 1,991,500 |
| Investment in Subsidary | 0 | 773,784 |
| Total other assets | 1,268,118 | 2,766,402 |
| NET NONCURRENT ASSETS OF DISCONTINUED OPERATIONS | - | - |
| TOTAL | $2,988,680 | $5,616,234 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Notes payable | $294,848 | $240,731 |
| Cash Disbursed in excess of available balances | 8,227 | |
| Current portion of long-term debt | 275,347 | 0 |
| Accounts payable and accrued expenses | 647,366 | 756,595 |
| Total current liabilities | 1,225,788 | 997,326 |
| LONG TERM DEBT | 204,621 | 338,451 |
| Deferred Revenue | 1,267,000 | |
| Total Liabilities | 2,797,409 | 1,335,777 |
| STOCKHOLDERS' EQUITY: | ||
| Common stock, $0.001 par value, authorized 75,000,000 23,084,903 shares issued and outstanding |
23,085 | 23,085 |
| Additional paid-in capital | 7,464,184 | 5,703,914 |
| Subscription Receivable | (4,044,322) | 0 |
| Deficit | (3,251,676) | (1,439,002) |
| Total stockholders' equity | 191,271 | 4,280,457 |
| TOTAL LIABILITIES & CAPITAL | $2,988,680 | $5,616,234 |
|
| ||
|
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPT 30, 2000 AND 1999 AND NINE MONTHS ENDED SEPT. 30, 2000 AND 1999 UNAUDITED |
NINE MONTHS ENDED |
|||
| 2000 | 1999 | 2000 | 1999 | |
| REVENUES: | $93,225 | $804,013 | $401,693 | $1,644,824 |
| EXPENSES: | ||||
| Selling, general, and administrative | 131,512 | 367,492 | 774,950 | 692,498 |
| Depreciation and amortization | 70,901 | 0 | 212,704 | 143,973 |
| Interest | 9,724 | 4,152 | 24,985 | 6,467 |
| Total expenses | 212,137 | 371,644 | 1,012,639 | 842,938 |
| Net Income (Loss) | $(118,912) | $432,369 | $(610,946) | $801,886 |
| Basic (loss) earnings per common share: | ||||
| Continued operations | $(0.01) | $0.02 | $(0.03) | 0.03 |
| Net (loss) income per share | $(0.01) | $0.02 | $(0.03) | 0.03 |
| Weighted average common shares outstanding | 23,084,903 | 23,084,903 | 23,084,903 | 23,084,903 |
|
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|
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPT 30, 2000 AND 1999 | ||
| SEPT. 2000 |
SEPT. 1999 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net (loss) income | $(610,946) | $801,866 |
| Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities: |
||
| Depreciation and amortization | 212,704 | 0 |
| Change in net assets and liabilities of discontinued operations |
- | - |
| Interest Paid | 0 | |
| Deferred Revenue | 1,267,000 | - |
| (Increase) decrease in assets: | ||
| Accounts receivable | (138,377) | (489,894) |
| Other assets | (1,267,000) | 0 |
| Increase (decrease) in liabilities: | ||
| Accounts payable and accrued expenses | 98,475 | 36,014 |
| Net cash (used in) provided by operating activities |
(438,144) | 347,986 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchase of equipment | - | 125,000 |
| Net cash used in investing activities | - | 125,000 |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Bank overdraft | - | - |
| Proceeds from loans | 382,616 | - |
| Proceeds from issuance of common stock | - | - |
| Net cash provided by
financing activities |
382,616 | - |
| (DECREASE) INCREASE IN CASH | (55,528) | 472,986 |
| CASH, BEGINNING | 47,301 | 28,579 |
| CASH, ENDING | $(8,227)) | $444,407 |
|
| ||
INTERACTIVE GAMING & COMMUNICATIONS CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
INTERACTIVE GAMING & COMMUNICATIONS CORP. AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1-BASIS OF
PRESENTATION
The accompanying unaudited consolidated financial
statements of Interactive Gaming & Communications Corp. and Subsidiaries
(the Company) have been prepared in accordance with the instructions to
SEC Form 10QSB, and therefore do not include all the information necessarry for
a full presentation of financial position, results of operations and cash flows
in conformity with generally accepted accounting principles. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
nine month period ended September 30, 2000 are not necessarily indicative
of the results that may be expected for the year ended December 31, 2000. The
unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in the Company's SEC Form 10KSB for the year ended December 31,
1999.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Description of Company
The Company engaged
principally in the gaming and entertainment software development business.
Forward Looking Statements
This Form 10-QSB contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein that address activities, events or developments that the Corporation expects, believes, estimates, plans, intends, projects or anticipates will or may occur in the future, are forward-looking statements. Actual events may differ materially from those anticipated in the forward-looking statements. Important risks that may cause such a difference include: general domestic and international economic business conditions, increased competition in the Corporation's markets and products. Other factors may include, availability and terms of capital, and/or increases in operating and supply costs. Market acceptance of existing and new products, rapid technological changes, availability of qualified personnel also could be factors. Changes in the Corporation's business strategies and development plans and changes in government regulation could adversely affect the Company. Although the Corporation believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate. There can be no assurance that the forward-looking statements included in this filing will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Corporation that the objectives and expectations of the Corporation would be achieved.
Results of Operations
Third Quarter Ended September 30, 2000 and 1999
In September 2000, revenues for Third quarter 2000 were $93,225 as compared
to $804,013 for third quarter 1999. The decrease in revenues for 2000 as
compared to 1999 resulted from a reduction in royalties. However,
advertising fees in 2000 steadily increased and accounted for 81% of the
revenues in 2000, and 19% of the revenues in 1999. The remaining revenues
were generated from advertising and other Internet related services.
Expenses from continuing operations decreased from $1,720,450 in the third
quarter 1999 to $131,512 in 2000, mainly as a result of the disposal of a
business segment.
Nine Months Ended September 30, 2000 and 1999
In the
first nine months of 2000 revenues are decreasing as compared to 1999 due to the
fact that more efforts are being focused on developing more advertising and
internet related services and software development projects. As a result
our expenses are increasing due to the fact that additional employees are needed
to help with the ongoing development of additional games and technologies within
the core gaming platform. The development costs will result in expanded
opportunities to resell the platform as well as garner advertising and launch
the first wireless gaming platform.
Liquidity and Capital Resources
The
Company's working capital deficit from continuing operations increased by
$462,238 or 66%,from $698,873 at December 31, 1999 to $1,161,111 at third
quarter 2000.
The Company has written off its $4,990,000 note from the sale
of the Company's former subsidiaries, however the company is in litigation and
will recognize as revenue any award or settlement on its lawsuit.
Under a promissory note payable to Madison Bank, the Company has a $200,000 line of credit available to fund working capital needs. As of September June 30, 2000, the Company has utilized the line.
Further cost reductions and anticipated revenue growth from licensing and advertising revenues as described in the Prospective Outlook discussion that follows should contribute to a gradual decrease in the working capital deficit.
The continuation of the Company in its present form is dependent upon its ability to obtain additional financing, if needed, and the eventual achievement of sustained profitable operations. Although there can be no assurances that the Company will be able to obtain such financing in the future, the Company did demonstrate its ability to obtain such financing in 1998 with its strategic alliances to develop new proprietary products and the sale of Sports and Casinos LiveAction and SportsBook software platforms, and the formation of Gamblenet Technologies, Ltd. in the first quarter 1999.
Government Regulation - Effect on Financing
The licensing business of the Company is conducted through its wholly owned
subsidiaries, which are legally organized in Grenada and licensed by the
Grenadan government to conduct its business. The company no longer operates any
business, which is regulated by government.
Inflation has not had a
significant impact on the Company's comparative results of operations.
The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-QSB, and therefore, do not include all the information necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2 -
Changes in Securities and Use of Proceeds
(a) None
(b) None
(c) 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) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
None
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INTERACTIVE GAMING AND COMMUNICATIONS CORP.Dated: December 19, 2000
By: /s/ MICHAEL F. SIMONE
Michael F. Simone, President
and Chief Executive Officer
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