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U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB/A
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _______________ to ____________
Commission file number 0-19049
American Gaming & Entertainment, Ltd.
_________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Delaware 74-2504501
________________________________ ________________________________
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
One Woodland Avenue, Paramus, New Jersey 07652
__________________________________________________
(Address of principal executive offices)
(609) 822-8505
__________________________
(Issuer's telephone number)
______________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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.
Yes X No ___
Number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Outstanding at September 30, 1998
_________________________ ______________________________
Common Stock, $.01 par value 12,532,102 shares
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The Company's Quarterly Report on Form 10-QSB for the period ended
September 30, 1998 is hereby amended by replacing Part I - Financial
Information, Item 2, "Management's Discussion and Analysis" in its entirety
with the following:
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations: Comparison of the three month periods ended
September 30, 1998 and September 30, 1997
Revenues
The Company did not record any revenues for the three months ended
September 30, 1998. The Company currently receives an annual distribution
equal to (i) 4.9% of the first $10,000,000 of annual net cash flow from the
operations of the Rising Sun Project, if any, and (ii) 1.63% of annual net
cash flow in excess of $45,000,000 from such operations, if any. Through
the six months ended June 30, 1998, the Company had received substantially
all of its anticipated annual distribution for 1998. For the three months
ended September 30, 1997, the Company recorded revenues of approximately
$133,000 attributable to the RSR Interest. Cash received from the Rising
Sun Project is recorded as "Restricted Cash" in the accompanying unaudited
Consolidated Balance Sheets (see Note 2).
Costs and Expenses
Selling, general and administrative expenses were approximately $397,000
for the three months ended September 30, 1998, representing a decrease of
approximately $106,000 or approximately 21% when compared to the three
months ended September 30, 1997. Such decrease was primarily due to
decreases in compensation, rent, insurance and consulting expenses.
Depreciation and amortization costs were approximately $336,000 for the
three months ended September 30, 1998, representing an increase of
approximately $41,000 or approximately 14% when compared to the three
months ended September 30, 1997. The furniture, fixtures and equipment on
the Gold Coast Barge were being depreciated over a useful life of 15 years
for the three months ended September 30, 1997; the Company reevaluated the
useful life of such assets in the fourth quarter of 1997 and determined
that such assets have a useful life of 10 years. Accordingly, for the three
months ended September 30, 1998, the Company depreciated such assets based
on a remaining useful life of six years.
Net interest expense for the three months ended September 30, 1998 was
approximately $1,327,000, a decrease of approximately $69,000 or
approximately 5% compared to the three months ended September 30, 1997.
Interest expense decreased approximately $62,000 while interest income
increased approximately $7,000 during the three months ended September 30,
1998 compared to the three months ended September 30, 1997. Interest
expense for the three months ended September 30, 1998 included a reversal
of previously recorded interest expense in the amount of approximately
$62,000 due to a refund of such interest pursuant to a legal settlement.
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The Company recorded a net gain of approximately $3,000 for the three
months ended September 30, 1997 related to the sale of certain furniture,
fixtures and equipment. No such gain was recorded for the three months
ended September 30, 1998.
Results of Operations: Comparison of the nine month periods ended
September 30, 1998 and September 30, 1997
Revenues
Revenues for the nine months ended September 30, 1998 were approximately
$445,000, a decrease of approximately $71,000 or approximately 14% when
compared to the nine months ended September 30, 1997. For the nine months
ended September 30, 1998 and September 30, 1997, the Company recorded
revenues of approximately $444,000 and $510,000, respectively, attributable
to the RSR Interest. Cash received from the Rising Sun Project is recorded
as "Restricted Cash" in the accompanying unaudited Consolidated Balance
Sheets (see Note 2).
Costs and Expenses
Selling, general and administrative expenses were approximately $1,283,000
for the nine months ended September 30, 1998, representing an increase of
approximately $36,000 or approximately 3% when compared to the nine months
ended September 30, 1997. However, selling, general and administrative
expenses for the nine months ended September 30, 1997 included the reversal
of a previously recorded consulting expense in the amount of approximately
$195,000 due to a consulting firm advising the Company that such firm was
not seeking payment of such unpaid amount and a reversal of previously
recorded state taxes in the amount of approximately $188,000 due to a tax
refund. Exclusive of such reversals, selling, general and administrative
expenses decreased approximately $347,000 for the nine months ended
September 30, 1998 as compared to the nine months ended September 30, 1997.
Such decrease was primarily due to decreases in compensation, rent,
insurance, consulting expense and expenses related to real property in
Alabama and the Harolds Club in Nevada.
Depreciation and amortization costs were approximately $1,009,000 for the
nine months ended September 30, 1998, representing an increase of
approximately $122,000 or approximately 14% when compared to the nine
months ended September 30, 1997. The furniture, fixtures and equipment on
the Gold Coast Barge were being depreciated over a useful life of 15 years
for the nine months ended September 30, 1997; the Company reevaluated the
useful life of such assets in the fourth quarter of 1997 and determined
that such assets have a useful life of 10 years. Accordingly, for the nine
months ended September 30, 1998, the Company depreciated such assets based
on a remaining useful life of six and a half years.
Net interest expense for the nine months ended September 30, 1998 was
approximately $4,067,000, a decrease of approximately $37,000 or
approximately 1% compared to the nine months ended September 30, 1997.
Interest expense decreased approximately $24,000 while interest income
increased approximately $13,000 during the nine months ended September 30,
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1998 compared to the nine months ended September 30, 1997. Interest expense
for the nine months ended September 30, 1998 included a reversal of
previously recorded interest expense in the amount of approximately $62,000
due to a refund of such interest pursuant to a legal settlement.
The Company recorded a net gain of approximately $5,000 for the nine months
ended September 30, 1997 related to the sale of certain furniture, fixtures
and equipment. No such gain was recorded for the nine months ended
September 30, 1998.
Changes in Financial Condition, Liquidity and Capital Resources
As of September 30, 1998, the Company had no committed financing
arrangements and a working capital deficiency of approximately $68,667,000.
For a discussion of liquidity and capital resources, see Note 2 to the
unaudited Consolidated Interim Financial Statements.
Risk Factors; Forward Looking Statements
Management's Discussion and Analysis contains forward-looking statements
regarding the Company's future plans, objectives and expected performance.
These statements are based on assumptions that the Company believes are
reasonable, but are subject to a wide range of risks and uncertainties, and
a number of factors could cause the Company's actual results to differ
materially from those expressed in the forward-looking statements. These
factors include, among others, the uncertainties related to (i) the
Company's ability to obtain sufficient funds for its operations, through
payments to be received under the Keno Note, the charter of the Gold Coast
Barge, sales of assets, or otherwise, (ii) obtaining Shamrock's and, if
necessary, Bennett Management's agreement to modify, terminate or
restructure on terms acceptable to the Company all obligations due from the
Company to Shamrock and, if applicable, Bennett Management, (iii)
consummating the liquidations under Chapter 11 of the Code of AMGAM and
AGRM under plans acceptable to the Company, resulting in a liquidation of
the various trade and debt obligations of those entities, (iv)
satisfactorily resolving the legal proceedings filed against the Company
(see Note 8 to the unaudited Consolidated Interim Financial Statements),
and (v) the legal problems described above relating to certain Bennett
Entities (see Notes 1 and 2 to the unaudited Consolidated Interim Financial
Statements).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
American Gaming & Entertainment, Ltd.
Date: 11/20/98 By: /s/ J. DOUGLAS WELLINGTON
____________________________________________
J. Douglas Wellington
President and Chief Executive Officer,
and Principal Accounting Officer
