<PAGE> 1
FORM 10-KSB/A
AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended: December 31, 1995
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: 000-20919
AMERICAS GAMING INTERNATIONAL, INC.
------------------------------------------------------
(exact name of Registrant as specified in its charter)
Delaware 06-1189563
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
690 South Rock Boulevard, Reno, Nevada 89502
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 702-856-4005
----------------
The undersigned registrant hereby amends Items 6 and 7 of its Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1995, in their
entirely to read as set forth below, and amends Item 13(a) to include Exhibit
27, as set forth below:
<PAGE> 2
ITEM 6. PLAN OF OPERATIONS
OPERATING PLAN
The Company was originally incorporated in 1986, and reincorporated in
Delaware in 1993. The Company changed its name from Oxford Capital Corp. to
Americas Gaming International, Inc. on November 22, 1995 in connection with the
Merger with BWC. Prior to the Merger, the Company had been inactive for several
years, and had no revenues from operations during 1995 or 1994. As a result of
the Merger, the Company acquired 100% of the stock of BWC. Because the Company
was the surviving legal entity in the Merger, the Company previously used the
historical financial and operating results of Oxford Capital Corp. to prepare
the financial statements included in the initial filing of this report. At the
recommendation of the Securities and Exchange Commission, the Company now has
accounted for the Merger as a "reverse acquisition" of the Company by BWC.
Accordingly, the historical financial and operating results of BWC have been
used to prepare the financial information and financial statements of the
Company included in this amendment to the report. BWC was formed on May 23,
1995, and had no active operations prior to the Merger. The most significant
change resulting from the accounting of the Merger as a "reverse acquisition" is
the reduction of the value of the Gaming License Agreement on the Company's
balance sheet from $2,278,808 in the initial filing of this report to $960,961
in this amendment to the report, and the corresponding reduction in total assets
and total stockholders' equity.
Following the Merger, the Company has been implementing its gaming
operations in Costa Rica and exploring relationships and operating potential in
other emerging gaming markets. The Company's recent and present activities
include raising capital, acquiring operating assets, recruiting and training
personnel and exploring and developing markets. The Company's business is in
the development stage and has generated insignificant revenues since the
Merger. The Company has incurred operating losses from its recent activities,
and believes it will be several more months before revenues from operations are
able to fund its operating costs.
During the next twelve (12) months, the Company intends to (1) expand
its operations in Costa Rica by installing additional machines and, if possible,
obtaining agreements to perform route operations for additional casinos, (2)
implement route operations in Lima, Peru, (3) build relationships and
infrastructure in South Africa and Mexico in anticipation of adoption of new
gaming statutes in those jurisdictions, (4) hire, train and implement a service
force to conduct its route operations in various locales, (5) develop a sales
and marketing force to promote the Company's business, (6) explore opportunities
in additional emerging gaming markets, (7) raise funds through debt and equity
offerings and, if available, borrowings, to finance its activities, and (8)
attempt to attract additional experienced management personnel to implement its
business plan. Implementation of the Company's business plan will require
substantial capital. In addition, expansion of the Company's operations into
other locales may substantially increase the Company's capital requirements.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1995 the Company had cash and cash equivalents of
approximately $308,000. In addition, the Company had $540,000 due from a
supplier, which it received in January 1996. The Company's principal source of
funds have been approximately $2,000,000 of loan proceeds from a private
placement of debt instruments in December 1995 and $1,075,000 proceeds from a
private placement of debt instruments in January 1996. See "--Bridge Financing"
below. The Company is presently conducting a private placement of shares of
Preferred Stock, as described below. For the year ended December 31, 1995, the
Company did not generate any revenues from operations. The Company incurred a
net loss of $227,681 (or $0.24 per share) during 1995. The loss was incurred in
connection with ongoing administrative costs during the Company's dormant period
prior to the Merger and the costs incurred in connection with the Merger and the
start-up of the Company's new gaming operations. The Company expects to incur
significant increases in salaries as it hires additional employees, including
management members. In addition, the Company expects to incur significantly
higher capital expenditures during 1996, including expenditures relating to the
acquisition and implementation of gaming equipment, leasing of additional
operation facilities and other expenditures.
2
<PAGE> 3
BRIDGE FINANCING. In December 1995 and January 1996, in order to obtain
capital to acquire the gaming equipment required to fulfill its obligations
under the Gaming Contracts, the Company completed two rounds of bridge financing
(the "Bridge Financing"). On November 28, 1995, the Company entered into a loan
agreement with Quest Capital Corporation, a British Columbia corporation
("Quest") and certain other lenders (collectively, the "Lenders") pursuant to
which the lenders loaned the Company $2,000,000. In exchange for the loan, the
Company issued promissory notes in an aggregate amount of $2,000,000 to the
Lenders (the "Bridge Notes"). The Bridge Notes accrue interest at the rate of 1%
per month, compounded monthly, and matured on March 29, 1996. Repayment of the
Bridge Notes was secured by a lien on certain of the Company's gaming devices
installed in Costa Rican casinos. In addition to the Bridge Notes, the Company
issued the Lenders 400,000 shares of Common Stock, and warrants to purchase an
additional 200,000 shares of Common Stock at a purchase price of $2.00 per share
(subject to adjustment in certain events). In connection with the loan, the
Company granted the Lenders other than Quest the right to convert their Bridge
Notes into shares of the Company's Common Stock at a conversion price of $1.25
per share. In March 1996, all of these Lenders agreed to exercise such
conversion rights. In January 1996, the Company offered Quest the right to
convert its Bridge Note into shares of Common Stock at a conversion price of
$2.00 per share. In March 1996, Quest evidenced its intent to exercise such
right and receive 500,000 shares of Common Stock in exchange for its $1,000,000
Bridge Note. As a result of these debt conversions, the Company eliminated its
repayment obligations for the Bridge notes, but further diluted the interest of
existing stockholders, including management.
On January 11, 1996, the Company entered into a similar loan agreement
with certain lenders (collectively, the "Other Lenders") pursuant to which the
Company borrowed an additional $1,075,000. The Other Lenders received notes
identical to the Bridge Financing that were due on March 29, 1996. Repayment of
these notes were secured by a pledge of 1.5 million shares of the Company's
Common Stock held by Bill R. Williams and Michael W. DeLeon, the Company's
President and Vice President of Operations, respectively. In addition, the other
Lenders received an aggregate of 215,000 shares of Common Stock and warrants to
purchase an additional 107,500 Shares of Common Stock at a purchase price of
$2.00 per Share. The Company also offered the Other Lenders the right to convert
their notes into shares of Common Stock at a conversion price of $2.00 per
share. In March 1996, all of the Other Lenders exercised such right, and will
receive an aggregate of 537,500 shares of Common Stock. As a result of these
debt conversions, the Company eliminated its repayment obligations for the
notes.
PREFERRED STOCK OFFERING. In March 1996, the Company commenced a
private placement of shares of 10% Cumulative Convertible Preferred Stock the
"Preferred Stock". The Preferred Stock is being offered to accredited investors
only, and is being marketed in certain domestic states and in foreign
jurisdictions. A minimum of $5,000,000 and a maximum of $10,000,000 Preferred
Stock will be sold. Each share of Preferred Stock costs $10.00 per share. Annual
cumulative dividends of $1.00 per share are to be paid quarterly in arrears
commencing July 1, 1996. Proceeds from the offering sufficient to pay dividends
on the Preferred Stock for four quarters following the issuance of the shares
will be placed in an escrow with a financial institution.
Each share of Preferred Stock will be convertible at any time at the
option of the holder into three shares of Common Stock at a conversion price of
$3.33 per share, subject to adjustment. Commencing twelve (12) months from the
closing of the offering, if the closing sales price for the Common Stock equals
or exceeds 300% of the conversion price for ten consecutive trading days, the
shares of Preferred Stock will automatically covert to Common Stock. The shares
of Preferred Stock will not be entitled to vote with the Common Stock on matters
subject to stockholder approval, but will be entitled to vote on matters that
are subject only to a vote by the shares of Preferred Stock voting as a class.
The shares of Preferred Stock will not be redeemable for twelve (12) months;
thereafter they may be redeemed for cash at the option of the Company for $10.00
per share plus accrued and unpaid dividends as of the redemption date. Holders
of shares of Preferred Stock are entitled to piggyback registration rights for
the underlying shares of Common Stock into which the Preferred Stock is
convertible. The Preferred Stock has a liquidation preference over the Common
Stock equal to $10.00 plus accrued and unpaid dividends.
All subscription funds received from investors for purchasers of
Preferred Stock will be held in escrow until the minimum offering amount of
$5,000,000 is achieved, at which time all funds will be paid to the Company.
3
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Board of Directors and Shareholders
Americas Gaming International, Inc.
(A Development Stage Company)
Reno, Nevada
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheet of Americas Gaming International,
Inc., formerly BWC Holding, Inc., (a Development Stage Company) as of December
31, 1995, and the related statements of operations and stockholders' equity and
cash flows for the period from May 23, 1995 (inception) through December
31, 1995. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principals used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above represent fairly,
in all material respects, the financial position of Americas Gaming
International, Inc. (a Development Stage Company) as of December 31, 1995, and
the results of its operations and its cash flows for the period from May 23,
1995 (inception) through December 31, 1995, in conformity with generally
accepted accounting principles.
/s/ Thomas W. Klash
- ---------------------------
Thomas W. Klash
Certified Public Accountant
Hollywood, Florida
March 13, 1996
4
<PAGE> 5
AMERICAS GAMING INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENTS ASSETS:
Cash and cash equivalents $ 308,036
Due from supplier 540,000
Inventory 108,435
Prepaid expenses 19,901
Debt issue costs 126,562
Gaming license agreement -
current portion 36,036
-----------
TOTAL CURRENT ASSETS 1,138,970
Property and equipment 722,791
Deferred underwriting costs 60,152
Gaming license agreement 960,961
-----------
TOTAL ASSETS $ 2,882,874
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 104,800
Accrued interest 17,098
Notes payable and accrued
interest - related party 807,225
Stock subscription payable 168,750
----------
TOTAL CURRENT LIABILITIES 1,097,873
----------
Notes Payable - non-current 2,000,000
----------
Stockholders' Equity:
Common Stock $.001 par value; 25,000,000 shares authorized;
5,375,000 and 1,807,500 shares issued and outstanding
at December 31, 1995 and 1994, respectively 5,375
Preferred stock; 5,000,000 shares authorized but unissued
at December 31, 1995 --
Additional paid in capital 7,307
Accumulated deficit (227,681)
-----------
TOTAL STOCKHOLDERS' EQUITY (214,999)
-----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,882,874
===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
Americas Gaming International, Inc.
(A Development State Company)
Income Statement
From May 23, 1995 (Inception) through December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
REVENUES:
Gaming revenue 0
OPERATING EXPENSES:
General and administrative
expenses 227,693
OPERATING INCOME (LOSS) (227,693)
--------
OTHER INCOME AND EXPENSES:
Interest and dividend income 12
OTHER INCOME (LOSS) 12
--------
NET LOSS (227,681)
========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 931,367
========
NET INCOME (LOSS)
PER COMMON SHARE (0.24)
========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 7
AMERICAS GAMING INTERNATIONAL, INC.
(A Development Stage Company
STATEMENT OF STOCKHOLDERS' EQUITY
FROM MAY 23, 1995 (INCEPTION) THROUGH DECEMBER 31, 1995
<TABLE>
<CAPTION>
Common Stock
$.001 Par Value Additional
Authorized 25,000 Paid-In Accumulated
Shares Amount Capital (Deficit) Total
----------------- ------- ----------- --------- -----
<S> <C> <C> <C> <C> <C>
Balance - December 31, 1994
Shares issued upon
incorporation of BWC Holding,
Inc. on May 23, 1995 3,575 358 358
Reclassification of shareholder
loans receivable associated
with dissolution of BWC
Holdings, Inc. (3,575) (358) (358)
Shares considered to be issued
in connection with the merger of
November 22, 1995 5,375,000 5,375 7,307 12,682
Net Loss for the period (227,681) (227,681)
---------
Balance - December 31, 1995 5,375,000 5,375 7,307 (227,681) (214,999)
========= ===== ===== ========= =========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
Americas Gaming International, Inc.
(A Development Stage Company)
Statement of Cash Flows
From May 23, 1995 (Inception) through December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS USED FOR OPERATING ACTIVITIES:
Net loss (227,681)
---------
Adjustments to reconcile net
income (loss) to net cash
used for operating activities:
Amortization 45,191
Changes in assets and liabilities
net of effects of acquired business:
(INCREASE) DECREASE IN ASSETS:
Inventory (108,435)
Due from supplier (540,000)
Prepaid expenses (19,901)
Deferred underwriting costs (60,152)
INCREASE (DECREASE) IN LIABILITIES:
Accounts payable 104,800
Accrued interest 24,323
----------
Total adjustments (554,174)
----------
NET CASH USED FOR OPERATING ACTIVITIES (781,855)
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment (722,791)
----------
NET CASH USED FOR INVESTING ACTIVITIES (722,791)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuing short term debt 2,000,000
Principal payment on debt (200,000)
Proceeds from sale of stock in
connection with reverse merger 12,682
----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,812,682
----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 308,036
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 0
----------
CASH AND CASH EQUIVALENTS -
END OF PERIOD 308,036
==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
Americas Gaming International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1995
NOTE A - COMPANY BACKGROUND
Americas Gaming International, Inc. (f/k/a BWC Holding, Inc.)
was formed in the state of Nevada on May 23, 1995. BWC
Holding, Inc. remained inactive from its inception through the
date of the merger with Oxford Capital Corp. on November 22,
1995. On that date, Oxford Capital Corp. (a publicly held
Delaware corporation) acquired 100% of the outstanding common
stock of BWC Holding, Inc. in a business combination accounted
for as a "reverse merger".
Oxford Capital Corp. was incorporated on August 19, 1986.
Oxford's business operations consisted of sales and marketing
activities. In recent years, Oxford had no active operations
other than investment and loan activities.
Contemporaneous with the merger, the Company acquired gaming
license agreements with owner- operators of certain hotels
located in Costa Rica. In addition, the Company acquired a
thirty year Gaming License Contract, dated September 20, 1993,
which provides the Company with the requisite Government
approvals to conduct its gaming operations in Costa Rica.
Presently, the gaming operations consist of acquiring and
placing gaming devices in third party owned Casino-Hotels in
Costa Rica. Through December 31, 1995 the Company received no
revenue from gaming device installations pursuant to these
contracts.
Since its inception on May 23, 1995, the Company devoted most
of its activities to establishing a new business. These
activities include raising capital, acquiring operating
assets, training personnel, developing markets and commencing
operations. Accordingly, the Company has been classified as a
Development Stage Enterprise.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents - The Company considers all highly
liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Recent Pronouncements - In March 1995, the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121 ("SFAS 121"), "Accounting for the
Impairment of Long- Lived Assets and for Long-Lived Assets to
Be Disposed Of". SFAS 121, which is effective for fiscal years
beginning after December 15, 1995, requires that long-lived
assets and certain identifiable intangibles held and used by
an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. The Company does not believe
that the adoption of this statement will have a material
effect on its financial statements.
Earnings (Loss) Per Common Share - Earnings (Loss) per common
share is based on the weighted average number of common shares
outstanding during the period. Common stock equivalents,
consisting of shares issuable upon exercise of outstanding
Stock Purchase Warrants have not been included in the
computation of loss per share because their effect would be
antidilutive.
9
<PAGE> 10
Americas Gaming International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1995
Inventory - Inventory consists of Gaming tokens to be used in
Gaming machines. Tokens have been valued at the lower of cost
(first-in, first-out) or market.
Property and Equipment - Property and equipment are stated at
cost. Ordinary maintenance and repairs are charged to expenses
as incurred. Costs that materially increase the life or value
of existing assets are capitalized. Assets that have been
placed in service and produce revenue are depreciated over
their estimated useful lives or amortized over lease terms
using the straight line method.
Deferred Underwriting Costs - The Company has identified and
deferred specific incremental costs directly attributable to a
proposed offering of common stock under the Securities Act of
1993. These costs are expected to be charged against the gross
proceeds of the offering.
Debt Issue Costs - Debt issue costs consist of the
(discounted) fair value of 400,000 shares of the Company's
(restricted) common stock which were issued to a consortium of
lenders in connection with the bridge financing which the
Company entered into on November 30, 1995. The costs are being
amortized over a four month period ending on the maturity date
of the notes, March 31, 1996.
Gaming License Agreements - The cost of obtaining (a) the
Casino-Hotel License Agreement, and (b) the thirty year Costa
Rican Gaming License are being amortized on a straight line
basis over 27 3/4 years (Remainder of Gaming License Term).
Income Taxes - Income Taxes, if any, are determined under the
Liability Method as required by Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes".
Foreign Currency Transaction - The assets acquired by the
Company in Costa Rica are translated into U.S. Dollars at
current exchange rates and expenses are translated at average
rates of exchange prevailing during the period.
NOTE C - GAMING LICENSE AGREEMENT
On November 22, 1995, Oxford Capital Corp. acquired 100% of
the outstanding common stock of B.W.C. Holding, Inc., a
privately held Nevada Corporation, pursuant to a Merger
Agreement. Oxford Capital Corp. issued 3,375,000 shares of
previously unissued (restricted) common stock to the
shareholders of B.W.C. Holding, Inc. Concurrently with and as
a condition of the merger with B.W.C. Holding, Inc., the
Company entered into an "Assignment and Assumption Agreement",
wherein the Company acquired Gaming License Agreements with
the owner/operators of certain Hotels located in Costa Rica
and the remaining term (27 3/4 years) of a thirty year Gaming
License Permit with the Costa Rican Government. The Licenses
and permits were acquired from an entity in which the
Company's Vice President of Operations is a principal
stockholder, officer and director.
10
<PAGE> 11
Americas Gaming International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1995
Valuation of the Gaming License was based upon the following:
Issuance of 7% Promissory Note
maturing March 31, 1996 1,000,000
Less: Current period
amortization (3,003)
----------
Unamortized Balance -
December 31, 1995 $ 996,997
==========
Reflected in the accompanying Balance Sheet at December 31,
1995 as:
Current Portion $ 36,036
Non-Current Portion 960,961
----------
$ 996,997
==========
NOTE D - DUE FROM SUPPLIER
Consists of an advance to the Company's principal gaming
device supplier, owned and operated by officers, directors and
shareholders of the Company. The advance was repaid in January
1996.
NOTE E - PROPERTY AND EQUIPMENT
Property and Equipment consists of the following at December
31, 1995:
Leasehold Improvements $ 3,926
Gaming Equipment 719,065
----------
$ 722,791
==========
The Company did not record depreciation expense during 1995.
NOTE F - NOTES PAYABLE AND ACCRUED INTEREST - RELATED PARTY
On November 22, 1995, the Company issued a 7% Promissory Note
in the amount of $1,000,000 to a company for the acquisition
of Gaming License Agreements with certain Hotel-Casinos
located in Costa Rica and the remaining term (27 3/4 years) of
a thirty year Gaming License permit with the Costa Rica
Government. A principal shareholder, director and officer of
the Company is also a principal shareholder, director and
officer of the seller of the Gaming License Agreement. The
Note matures on March 31, 1996. Interest expense accrued
through December 31, 1995 amounted to $7,225.
11
<PAGE> 12
Americas Gaming International, Inc.
(A Development State Company)
Notes to Financial Statements
December 31, 1995
NOTE G - NOTES PAYABLE
On November 28, 1995 the Company borrowed $2,000,000 at 12.68%
annual interest (Bridge Financing) from various Lenders. The
loan is evidenced by Promissory Notes and secured by all of
the Company's assets. The notes mature on March 31, 1996. The
Lenders have agreed to convert the debt to equity by accepting
1,300,000 shares of common stock in payment for the
obligation. Accordingly, the notes payable are classified as
noncurrent liabilities in the accompanying balance sheet.
Interest expense relating to the bridge financing notes
amounted to $17,098 in 1995.
NOTE H - MERGER WITH B.W.C. HOLDING, INC.
On November 22, 1995, Oxford Capital Corp. acquired 100% of
the issued and outstanding capital stock of B.W.C. Holding,
Inc., a privately held Nevada corporation, pursuant to a
Merger Agreement. A total of 3,375,000 shares of Oxford
Capital Corp.'s previously unissued (restricted) common stock
was issued to the shareholders of B.W.C. Holding, Inc.
Although Oxford Capital Corp. was the surviving corporation,
the business combination was accounted for as a "reverse
merger" since the control shareholders of BWC Holding, Inc.
became the control shareholders of Oxford Capital Corp.. As a
result of the merger, the historical financial information
included in the accompanying financial statements prior to
November 22, 1995, are those of BWC Holding, Inc. Proforma
information giving effect to the acquisition as if the
acquisition took place on January 1, 1995 is as follows:
Current Assets $ 16,078
========
Stockholders' Equity $ 16,078
========
The proforma results of operations for the merged entities
would not be different than reflected in the accompanying
statement of operations. The results of operations in the
accompanying statement of operations consists of income and
expenses of Oxford Capital Corp. from November 22, 1995
through December 31, 1995. BWC Holding, Inc. had no income or
expenses during 1995.
Concurrent with the stock acquisition, the Company acquired
certain gaming licenses through an Assignment and Assumption
Agreement with a Costa Rican corporation affiliated with a
shareholder, officer and director of Americas Gaming
International, Inc. for $1,000,000.
NOTE I - STOCKHOLDERS EQUITY
Preferred Stock - On November 22, 1995, the Company amended
its certificate of incorporation to provide for the
authorization to issue a total of 30,000,000 shares, divided
into 25,000,000 shares of $.001 par value common stock and
5,000,000 of $.001 preferred stock.
Warrants - On November 16, 1995, the Company issued a warrant
to Kachina Capital Corporation representing compensation for
its part in effecting the Company's merger with B.W.C
Holdings, Inc. and arranging bridge financing for the Company.
The warrant entitles the holder to purchase up to 200,000
shares of the Company's common stock at an exercise price of
$1.25 per share. The warrant is exercisable through November
16, 1998.
12
<PAGE> 13
Americas Gaming International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1995
Stock purchase warrants were issued to participating Lenders
in connection with the $2,000,000 bridge financing. The
warrants entitle the holders to purchase up to 200,000 shares
of the Company's unissued common stock at an exercise price of
$2.00 per share. The warrants are exercisable through November
29, 2000.
Stock Bonus - A total of 400,000 shares of the Company's
unissued common stock are reserved for issuance to a
consortium of lenders, as compensation for the participation
in and arrangement of the bridge financing. At December 31,
1995, the shares were not issued; however, a liability has
been included in the accompanying balance sheet under the
caption of stock subscription payable.
NOTE J - OTHER RELATED PARTY TRANSACTIONS
Gaming Device Supplier - The Company purchased gaming machines
and certain machine parts through privately held affiliates
during 1995 in which the Company's President is a principal
stockholder, officer and director. A total of $408,433 was
paid to third parties through such affiliates.
NOTE K - SUBSEQUENT EVENTS
Borrowings - On January 11, 1996 the Company borrowed an
additional $1,075,000 from a consortium of Lenders for the
purpose of paying the debt incurred in connection with the
acquisition of the Costa Rican Gaming Licenses and other
general working capital purposes. The notes bear interest at
12.68% per annum, and mature on March 29, 1996. A total of
322,500 shares of the Company's unissued common stock are
reserved for issuance to the Lenders as follows:
Stock Purchase Warrants - Entitling the holders to purchase up
to 107,500 shares of the Company's common stock at an exercise
price of $2.00 per share. The warrants expire on January 11,
2001.
Bonus Shares - The Lenders were also paid 215,000 shares of
the Company's common stock.
The Lenders have agreed to convert all of the principal
balance to equity by accepting 537,500 shares of common stock
in payment thereof.
Private Offering - On February 29, 1996, the Company commenced
an offering, through private placement of a minimum of 500,000
shares and a maximum of 1,000,000 shares of 10% cumulative
convertible preferred stock. Annual cumulative dividends of $1
per share are payable quarterly commencing July 1, 1996. The
offering price is $10 per share. Each share of preferred stock
is convertible at any time at the option of the holder into 3
shares of common stock.
Employment Agreements - In February, 1996, the Company entered
into Employment Agreements with the Company's President and
Vice-President of Operations. The Employment Agreements
provide for a base salary of $84,000 per year for each of the
executives. The Employment Agreements have a term of three
years with three-one year renewals at the election of the
executive and the Company.
13
<PAGE> 14
NOTE L - INCOME TAXES
At December 31, 1995, the Company had a net operating loss
carryforward amounting to approximately $231,000 which expires
on December 31, 2110. It is not expected that the Company will
utilize its previous years' net operating loss carryforward as
a result of Internal Revenue Code Section 382, which deals
with the tax attributes of Companies experiencing a greater
than 50% change in ownership and changes in business activity.
Deferred tax benefit, as described in Financial Accounting
Standard No. 109 has not been recorded in the accompanying
financial statements because of a valuation allowance. The
realizability of the related tax benefit is contingent upon
the Company's ability to generate profitable operations in the
future.
NOTE M - SUPPLEMENTAL CASH FLOW DISCLOSURES
December 31, 1995
Issuance of common stock in
connection with debt issue costs.......................168,750
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit No. Description Method of Filing
----------- ----------- ----------------
27 Financial Data Schedule Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the undersigned has duly caused this amended report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: September 6, 1996
AMERICAS GAMING INTERNATIONAL, INC.
By: /s/ John Sutherland
-----------------------------------
John Sutherland
President & Chief Executive Officer
By: /s/ Vincent Brian Balik
-----------------------------------
Vincent Brian Balik
Vice President - Finance
(Chief Financial & Accounting Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET DATED DECEMBER 31, 1995 AND INCOME STATEMENT FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 308,036
<SECURITIES> 0
<RECEIVABLES> 540,000
<ALLOWANCES> 0
<INVENTORY> 108,435
<CURRENT-ASSETS> 1,138,970
<PP&E> 722,791
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,882,874
<CURRENT-LIABILITIES> 1,097,873
<BONDS> 0
0
0
<COMMON> 5,375
<OTHER-SE> 7,307
<TOTAL-LIABILITY-AND-EQUITY> 2,882,873
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 227,693
<OTHER-EXPENSES> 12
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12
<INCOME-PRETAX> (227,681)
<INCOME-TAX> (227,681)
<INCOME-CONTINUING> (227,681)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (277,681)
<EPS-PRIMARY> (0.24)
<EPS-DILUTED> 0
</TABLE>
