<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT UNDER 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 small business issuer 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: (1) Item 1 - Financial
Statements, (2) Item 2 - Plan of Operation, and (3) Item 6 - Exhibits and
Reports on Form 8-K - Exhibit 27, of its Quarterly Report on Form 10-QSB for the
fiscal quarter ended March 31, 1996, in their entirety to read as follows:
<PAGE> 2
AMERICAS GAMING INTERNATIONAL, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
-------------------------------
March 31, December 31,
1996 1995
(Unaudited)
----------- ------------
<S> <C> <C>
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 24,644 $ 308,036
ACCOUNTS RECEIVABLE 20,053 --
DUE FROM SUPPLIER -- 540,000
INVENTORY 119,252 108,435
PREPAID EXPENSES 31,104 19,901
DEBT ISSUE COSTS -- 126,562
GAMING LICENSE AGREEMENT;
CURRENT PORTION 36,036 36,036
---------- ----------
TOTAL CURRENT ASSETS 231,089 1,138,970
DEFERRED UNDERWRITING COSTS 165,237 60,152
DEFERRED FUTURE PROJECT COSTS 69,429 --
PROPERTY AND EQUIPMENT 2,469,709 722,791
GAMING LICENSE AGREEMENT 951,952 960,961
INVESTMENT IN SAGI 45,000 --
---------- ----------
TOTAL ASSETS $3,932,416 $2,882,874
========== ==========
</TABLE>
2
<PAGE> 3
LIABILITIES AND
STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 170,697 $ 104,800
ACCRUED INTEREST 59,730 17,098
ACCRUED LIABILITIES 18,642 --
NOTES PAYABLE AND ACCRUED
INTEREST; RELATED PARTY 7,225 807,225
NOTES PAYABLE-CURRENT PORTION 549,990 --
STOCK SUBSCRIPTION PAYABLE -- 168,750
---------- ----------
TOTAL CURRENT LIABILITIES 806,284 1,097,873
---------- ----------
NOTES PAYABLE 2,349,990 2,000,000
---------- ----------
STOCKHOLDERS' EQUITY:
COMMON STOCK $.001 PAR
VALUE: 25,000,000 SHARES
AUTHORIZED; 6,961,559, AND
5,375,000 SHARES ISSUED
AND OUTSTANDING AT
MARCH 31, 1996 AND
DECEMBER 31, 1995 6,962 5,375
PREFERRED STOCK: 5,000,000
SHARES AUTHORIZED BUT
UNISSUED AT MARCH 31, 1996 -- --
ADDITIONAL PAID IN CAPITAL 1,628,905 7,307
ACCUMULATED DEFICIT (859,725) (227,681)
---------- ----------
776,142 214,999
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $3,932,416 $2,882,874
========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
<PAGE> 4
AMERICAS GAMING INTERNATIONAL, INC.
INCOME STATEMENT
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
REVENUES:
GAMING REVENUE $ 51,739 $--
---------- ---
51,739 --
---------- ---
OPERATING EXPENSES 55,732 --
GENERAL AND ADMINISTRATIVE
EXPENSES 540,359 0
---------- ---
596,091 0
---------- ---
OPERATING INCOME (LOSS) (544,352)
OTHER INCOME AND EXPENSES:
INTEREST AND DIVIDEND INCOME -- 0
INTEREST EXPENSE (87,692) --
(LOSS) ON INVESTMENT IN
MARKETABLE EQUITY SECURITIES -- 0
---------- ---
(87,692) 0
========== ===
NET LOSS (632,044) 0
========== ===
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,985,364
NET INCOME (LOSS) ---------- ---
PER COMMON SHARE $ (0.11) $--
========== ===
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 5
AMERICAS GAMING INTERNATIONAL, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 and 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net income (loss) $(632,044) $ 0
--------- ---
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Amortization & Depreciation 173,746 --
Non-cash expense incurred
associated with issuance of
stock 134,375 --
Loss on sale of
marketable securities -- 0
Provision for loss on market decline
of securities -- 0
Proceeds from sale of securities -- 0
(Increase) decrease in assets:
Inventory (10,817) --
Due from supplier 540,000 --
Prepaid expenses (11,203) --
Deferred underwriting costs (105,085) --
Accounts receivable (20,052) --
Increase (decrease) in liabilities:
Accounts payable 65,896 --
Accrued interest 87,692 --
Accrued liabilities 18,641 --
--------- ---
Total adjustments 873,193 0
--------- ---
Net cash provided by (used in)
operating activities 241,149 0
--------- ---
</TABLE>
5
<PAGE> 6
<TABLE>
1996 1995
---- ----
<S> <C> <C>
Cash flows from investing activities:
Acquisition of equipment (1,785,093) --
Investment in partnership (45,000) --
Investment in future projects (69,428) --
----------- --
Net cash used in investing
activities (1,899,521) --
----------- --
Cash flows from financing activities:
Net proceeds from sale of stock -- 0
Net proceeds from issuing short
term debt 1,075,000 --
Principle payments on debt (800,000) --
Financing of equipment purchased 1,099,980 --
----------- --
Net cash provided by (used in)
financing activities 1,374,980 0
----------- --
Net increase (decrease) in cash and
cash equivalents (283,392) 0
Cash and cash equivalents beginning
of period 308,036 0
----------- --
Cash and cash equivalents end of period
$ 24,644 $0
=========== ==
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
Americas Gaming International, Inc.
Notes to Financial Statements
March 31, 1996
(Unaudited)
NOTE A: The Company and Basis of Presentation
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.
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.
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. During the first quarter of
1996 the Company amortized the remaining costs in the amount of
$126,562. The Company also issued an additional 215,000 shares of stock
(restricted) to a consortium of lenders in connection with additional
bridge financing resulting in an additional $134,375 in costs for a
total expense in the quarter of $260,937.
Gaming License Agreements - The cost of obtaining (a) the Casino-Hotel
License Agreements, 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.
7
<PAGE> 8
Americas Gaming International, Inc.
Notes to Financial Statements
March 31, 1996
(Unaudited)
NOTE B: 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 matured on March 31, 1996. Interest expense relating to the
bridge financing notes amounted to $17,098 in 1995 and $87,692 in the
first quarter of 1996. During January 1996 the Company borrowed an
additional $1,075,000 at 12.68% annual interest (Bridge Financing) from
various lenders. As of March 29, 1996, $1,275,000 of this combined
debt, plus accrued interest, was converted to equity. The offer remains
open for the remaining debt to convert to equity pending formal legal
procedure. Accordingly, the notes payable are classified as noncurrent
liabilities in the accompanying balance sheet.
During March 1996, the Company entered into an agreement to purchase
slot machines with the manufacturer agreeing to finance a portion of
the purchase price in the amount of $1,099,980. The terms of the
agreement called for 24 equal payments of $45,832.50 plus interest at
the rate of 1.25% per month.
NOTE C: Private Offering
On February 29, 1996, the Company commenced an offering, through
private placement, of a minimum of 500,000 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.
ITEM 2. PLAN OF OPERATIONS
OPERATING PLAN
The Company (f/k/a Oxford Capital Corp.) commenced its present
operations when it merged with B.W.C. Holding, Inc., a Nevada corporation
("BWC"), on November 22, 1995 (the "Merger"). The Company changed its name from
Oxford Capital Corp. to Americas Gaming International, Inc. in connection with
the Merger. Prior to the Merger, the Company had been inactive for several
years, and had no revenues from operations during 1995 or 1994. The Company
acquired 100% of the outstanding common 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 and information 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 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 $2,257,508 in the initial filing of this report to $951,952
in this amendment to the report, and the corresponding reduction in total assets
and total stockholder's equity.
8
<PAGE> 9
Following the Merger, the Company has been implementing its
gaming operations in Costa Rica and Peru, 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 an early stage of operation and has generated
insignificant revenues since the Merger. The Company's Costa Rican gaming
operations generated revenues of only $51,739 for the quarter ended March 31,
1996. The revenues were less than expected due to the government's shutdown of a
large casino that the Company was servicing and delays in government approvals
for other casinos. The Company has entered into an agreement to install gaming
machines in a casino in Lima, Peru, and expects to install approximately 200
machines in Lima during the second quarter of 1996 and more during the remainder
of the year, although there can be no assurances in this regard. The Company has
incurred operating losses from its recent activities, and believes it will be
many more months before revenues from operations are able to fund its operating
costs.
During 1996, 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.
Expansion of the Company's operations into other locales may substantially
increase the Company's capital requirements.
LIQUIDITY AND CAPITAL RESOURCES
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1996. At
March 31, 1996 the Company had cash and cash equivalents of approximately
$24,644. The Company's principal source of funds have been approximately
$3,575,000 of loan proceeds from private placements of debt instruments in
December 1995, January 1996 and April 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. For the quarter ended March 31, 1996,
the Company generated gaming revenues of $51,739. For the quarter ended March
31, 1996, the Company incurred operating expenses of $55,732 and general and
administrative expenses of $540,359. As a result, the Company incurred a net
loss of $632,044 (or $0.11 per share) for the quarter. The loss was incurred in
connection with the start-up of the Company's gaming operations, including debt
issue costs to fund substantial equipment purchases. The Company expects to
incur significant increases in salaries as it hires additional employees,
including management members. In addition, the Company expects to continue to
incur significant capital expenditures relating to the acquisition and
implementation of gaming equipment, leasing of additional operation facilities
and other start-up expenditures.
Bridge Financing. In December 1995, January 1996 and April 1996,
in order to obtain capital to acquire the gaming equipment required to fulfill
its routing obligations, the Company completed three 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
9
<PAGE> 10
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 April, 1996, Quest evidenced its intent
to exercise such right and receive 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, certain of the Other Lenders exercised such
right. The remaining Other Lenders verbally agreed to convert their notes into
Common Stock, but have not yet returned their paperwork.
On April 17, 1996, the Company entered into a loan agreement with
Benitz and Partners Limited ("Benitz") pursuant to which Benitz loaned the
Company $500,000. In exchange for the loan, the Company issued to Benitz a
promissory note in the amount of $500,000, 25,000 shares of Common Stock and a
warrant to purchase an additional 25,000 shares of Common Stock at an exercise
price of $4.25 per share (subject to adjustment in certain events). The
promissory note accrues interest at the rate of 1% per month, compounded
monthly, and matures on August 30, 1996 or earlier upon completion of a debt or
equity financing. In addition, because the promissory note was not repaid by May
10, 1995, the loan agreement required the Company to, and the Company did, issue
an additional 25,000 shares of Common Stock and another warrant to purchase
25,000 shares of Common Stock at an exercise price of $4.25 per share.
The Company has used substantially all of the foregoing Bridge
Financing proceeds to acquire revenue equipment and to fund operating and
general and administrative expenses.
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
10
<PAGE> 11
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.
CAPITAL COMMITMENTS. The Company has committed to purchase slot
machines from a manufacturer for an aggregate purchase price of approximately
$2.7 million. The Company previously made down payments of approximately
$320,000 and $471,000 for such machines, and will pay the balance of
approximately $1.85 million in 24 equal monthly installments. In addition to the
foregoing, it is likely that the Company will need to purchase more machines
during this fiscal year in order to implement its intended business plan. The
Company believes that funds from the Preferred Stock offering and, subsequently,
revenues from operations will fund its equipment purchases, although there can
be no assurances in this regard. If future revenues from operations are not
adequate to fund intended expansion, the Company may be required to raise
additional funds from the sale of equity or debt securities, or otherwise modify
its business plan.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
Exhibit No. Description Method of Filing
----------- ----------- ----------------
27 Financial Data Schedule Filed Herewith
B. REPORTS ON FORM 8-K
None.
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)
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET DATED MARCH 31, 1996 AND INCOME STATEMENT FOR THE PERIOD ENDED MARCH 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 24,644
<SECURITIES> 0
<RECEIVABLES> 20,053
<ALLOWANCES> 0
<INVENTORY> 119,252
<CURRENT-ASSETS> 231,089
<PP&E> 2,469,709
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,932,416
<CURRENT-LIABILITIES> 806,284
<BONDS> 0
0
0
<COMMON> 6,962
<OTHER-SE> 1,628,905
<TOTAL-LIABILITY-AND-EQUITY> 3,932,416
<SALES> 51,739
<TOTAL-REVENUES> 51,739
<CGS> 55,732
<TOTAL-COSTS> 55,732
<OTHER-EXPENSES> 540,359
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 87,692
<INCOME-PRETAX> (544,352)
<INCOME-TAX> 0
<INCOME-CONTINUING> (544,352)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (632,044)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> 0
</TABLE>
