<PAGE 1>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(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, 2000
[ ] 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)
51 Beech Road, Glen Rock, New Jersey 07452
__________________________________________
(Address of principal executive offices)
(201) 447-5360
___________________________
(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 March 31, 2000
____________________________ _____________________________
Common Stock, $.01 par value 12,561,750 shares
<PAGE 2>
AMERICAN GAMING & ENTERTAINMENT, LTD.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2000 1999
____________ ____________
ASSETS
Current Assets
Cash $ 48,000 $ 127,000
Cash in transit 376,000 -
Prepaid expenses 35,000 58,000
Due from stockholder - 376,000
Other current assets - 7,000
____________ ____________
Total current assets 459,000 568,000
Furniture, fixtures and equipment, net of
accumulated depreciation of $3,000 - 2000
and $83,000 - 1999 5,000 5,000
____________ ____________
$ 464,000 $ 573,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 83,000 $ 47,000
Accrued payroll and related expenses - 3,000
Accrued expenses and other current liabilities 45,000 52,000
____________ ____________
Total current liabilities 128,000 102,000
____________ ____________
Commitments and Contingencies
Stockholders' Equity
Preferred stock, 1,000,000 shares authorized:
Series A preferred stock, par value $.01
per share, 55,983 shares issued 1,000 1,000
Series C and D cumulative preferred stock,
and Series E preferred stock, par value $.01
per share, 4,000 shares authorized and
issued for each series 17,452,000 17,136,000
Common stock, par value $.01 per share;
50,000,000 shares authorized, shares
issued: 12,561,750 - 2000 and 12,556,137
- 1999 (including 24,035 shares held in
treasury in 1999) 126,000 126,000
Additional paid-in capital 42,367,000 42,707,000
Cost of shares held in treasury - (25,000)
Accumulated deficit (59,610,000) (59,474,000)
____________ ____________
336,000 471,000
____________ ____________
$ 464,000 $ 573,000
============ ============
See Notes to Consolidated Financial Statements
<PAGE 3>
AMERICAN GAMING & ENTERTAINMENT LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
____________ ____________
2000 1999
____________ ____________
Revenues $ - $ -
____________ ____________
Costs and expenses
Selling, general and administrative 137,000 443,000
Depreciation and amortization - 335,000
____________ ____________
Total costs and expenses 137,000 778,000
____________ ____________
Operating loss (137,000) (778,000)
____________ ____________
Other income (expense)
Interest income 1,000 19,000
Interest expense - (1,152,000)
Net gain on sale of property - 48,000
____________ ____________
Total other income (expense) 1,000 (1,085,000)
____________ ____________
Net loss (136,000) (1,863,000)
Accretion on preferred stock 316,000 317,000
Dividends on preferred stock - 150,000
____________ ____________
Net loss for common stockholders $ (452,000) $(2,330,000)
============ ============
Net loss for common stockholders per share $ (0.04) $ (0.19)
============ ============
Weighted average number of common shares
outstanding 12,533,948 12,532,102
============ ============
See Notes to Consolidated Financial Statements
<PAGE 4>
AMERICAN GAMING & ENTERTAINMENT, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months ended March 31,
2000 1999
____________ ____________
Operating Activities
Net loss $ (136,000) $(1,863,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization - 335,000
Accrued interest - 1,152,000
Interest income from restricted cash - (15,000)
Net gain on sale of property - (48,000)
Changes in operating assets and liabilities
Cash in transit (376,000)
Due from stockholder 376,000
Restricted cash - (645,000)
Deferred charter revenue - 645,000
Other current assets 30,000 2,000
Accounts payable, accrued expenses and
other current liabilities 26,000 213,000
____________ ____________
Net cash used in operating activities (80,000) (224,000)
____________ ____________
Investing Activities
Proceeds from asset dispositions - 423,000
____________ ____________
Net cash provided by investing
activities - 423,000
____________ ____________
Financing Activities
Proceeds from exercise of stock options 1,000 -
Proceeds from notes receivable and other
long-term assets - 300,000
____________ ____________
Net cash provided by financing
activities 1,000 300,000
____________ ____________
Increase (decrease) in cash (79,000) 499,000
Cash at beginning of year 127,000 123,000
____________ ____________
Cash at end of period $ 48,000 $ 622,000
============ ============
See Notes to Consolidated Financial Statements
<PAGE 5>
AMERICAN GAMING & ENTERTAINMENT, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited Consolidated Interim Financial Statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Article 10 of Regulation S-X. The unaudited Consolidated Interim Financial
Statements include the accounts of American Gaming & Entertainment, Ltd. and
its subsidiaries (collectively, the "Company"). The unaudited Consolidated
Interim Financial Statements do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Company, all adjustments
(including normal recurring accruals) and disclosures (including events
occurring subsequent to March 31, 2000) considered necessary for a fair
presentation have been included. Operating results for the three month period
ended March 31, 2000 may not be indicative of the results that may be expected
for the year ending December 31, 2000. For further information, reference is
also made to the Consolidated Financial Statements contained in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1999 (the "1999
10-K").
The accompanying consolidated financial statements have been prepared on a
going concern basis, which contemplates continuity of operations, realization
of assets and liquidation of liabilities in the ordinary course of business.
The Company has had a history of insufficient liquidity and has been dependent
upon Shamrock Holdings Group, Inc. and certain related entities (collectively,
"Shamrock") for both working capital and project related financing.
The Company's recurring losses raise substantial doubt about the ability of
the Company to continue as a going concern. Management's plans concerning
these matters are discussed in Note 2. The accompanying unaudited Consolidated
Interim Financial Statements do not include any additional adjustments that
might result from the outcome of these uncertainties.
NOTE 2: LIQUIDITY AND CONTINUATION OF BUSINESS
The Company had available cash of approximately $48,000 as of March 31, 2000.
Such amount, together with cash in transit (see Note 4), is anticipated to be
sufficient for the Company's budgeted costs through January 31, 2001. The
Company's ability to continue in business is primarily dependent upon its
ability to obtain sufficient funds for its operations. However, the Company
has no current commitments or prospects for additional funds. If the Company
does not receive additional funds prior to January 31, 2001, it would then
need to pursue a formal plan of reorganization or liquidation. A formal plan
of reorganization or liquidation would generally result in the sale of the
Company's assets to satisfy outstanding obligations. There can be no assurance
that if either action is required to be pursued that all such obligations
would be completely satisfied. Further, in the event of either action, it is
unlikely that the stockholders of the Company will recover any of their
investment in the Company.
<PAGE 6>
The Company maintains its cash accounts at a bank located in New Jersey. Total
cash balances are insured by the Federal Deposit Insurance Corporation
("FDIC") up to $100,000 per bank. The Company's cash balances on deposit with
the New Jersey bank at March 31, 2000 did not exceed the balance insured by
the FDIC.
For a discussion of other specific factors affecting the Company's liquidity
and continuation of business, see the 1999 10-K.
NOTE 3: RELATED PARTY ISSUES
As of March 31, 2000, Shamrock owns 100% of the outstanding shares of the
Company's Series A Preferred Stock and approximately 47.3% of the outstanding
shares of the Common Stock, thereby owning approximately 52.6% of the total
voting power represented by the Company's outstanding voting securities.
Additionally, Shamrock owns all of the outstanding shares of the Series C
Cumulative Preferred Stock ("Series C Stock"), Series D Cumulative Preferred
Stock ("Series D Stock") and Series E Preferred Stock ("Series E Stock").
The Company does not have a sufficient number of authorized shares of Common
Stock to enable the conversion of all of the Series C Stock, the Series D
Stock and the Series E Stock. In November 1999, the Board of Directors voted
to request the stockholders of the Company to approve an amendment to the
Company's Restated Certificate of Incorporation increasing the number of
authorized shares of Common Stock to 3,000,000,000 shares. Shamrock, as the
majority stockholder of the Company, has consented to such amendment. The
Company expects such amendment to become effective on or about May 10, 2000.
Assuming that Shamrock converted as of March 31, 2000 that number of shares of
Series C Stock, Series D Stock and Series E Stock convertible into the total
number of the Company's presently authorized but unissued shares of Common
Stock (i.e. 37,438,250 shares), Shamrock would own approximately 86.7% of the
total outstanding shares of Common Stock and approximately 87.1% of the total
voting power represented by the total outstanding voting securities of the
Company. Assuming the amendment to the Company's Restated Certificate of
Incorporation increasing the number of authorized shares of Common Stock to
3,000,000,000 shares was effective and Shamrock converted as of March 31, 2000
all shares of the Series C Stock, the Series D Stock and the Series E Stock
(i.e. resulting in a total of 125,783,063 shares of Common Stock being issued
to Shamrock as of such date), Shamrock would own approximately 95.2% of both
the total outstanding shares of Common Stock and the total voting power
represented by the total outstanding voting securities of the Company. As of
March 31, 2000, Shamrock has not asserted any rights it may have against the
Company for the Company's failure to maintain a sufficient number of
authorized shares of Common Stock to enable Shamrock to convert all of the
Series C Stock, the Series D Stock and the Series E Stock.
<PAGE 7>
NOTE 4: CASH IN TRANSIT
As of March 31, 2000, approximately $376,000 was due from Shamrock from excess
cash distributions to Shamrock. The Company received such amount in April
2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations: Comparison of the three month periods ended March 31,
2000 and March 31, 1999
Costs and Expenses
Selling, general and administrative expenses were approximately $137,000 for
the three months ended March 31, 2000, representing a decrease of
approximately $306,000 or approximately 69% when compared to the three months
ended March 31, 1999. Such decrease was primarily due to decreases of
approximately $56,000 and $24,000 in legal fees and directors fees,
respectively, expenses of approximately $174,000 for the three months ended
March 31, 1999 related to a casino property in Reno, Nevada that was sold in
July 1999 and a $35,000 judgment against the Company for unpaid insurance
premiums recorded in the three months ended March 31, 1999.
Depreciation and amortization costs related to a casino barge that was sold in
August 1999 were approximately $335,000 for the three months ended March 31,
1999. The Company recorded no material depreciation or amortization costs for
the three months ended March 31, 2000.
Interest income for the three months ended March 31, 2000 was approximately
$1,000, related to funds deposited in a money market account. Interest income
for the three months ended March 31, 1999 was approximately $19,000, primarily
related to funds held in escrow in connection with an interest in a riverboat
gaming and entertainment complex in Rising Sun, Indiana (the "RSR Interest").
In November 1999, the Company agreed to transfer to Shamrock all payments,
distributions, dividends and proceeds of any type to which the Company is
entitled pursuant to or in connection with the RSR Interest. Accordingly, no
such interest income was recorded for the three months ended March 31, 2000.
Interest expense for the three months ended March 31, 1999 was approximately
$1,152,000 on debt owed to Shamrock. In November 1999, Shamrock agreed to
release the Company from all debts and liabilities. Accordingly, no interest
expense was recorded for the three months ended March 31, 2000.
The Company recorded a net gain of approximately $48,000 for the three months
ended March 31, 1999 related to the sale of a building in Mobile, Alabama.
<PAGE 8>
Changes in Financial Condition, Liquidity and Capital Resources
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, specifically, the uncertainties related to the Company's
ability to obtain sufficient funds for its operations.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Number Description
______________ ___________
11 Computation of Earnings Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K. None.
<PAGE 9>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
American Gaming & Entertainment, Ltd.
Date: 4/21/00 By: J. DOUGLAS WELLINGTON
____________________ _____________________________
J. Douglas Wellington
President and Chief Executive
Officer, and
Principal Accounting Officer
<PAGE 10>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION PAGE NO.
_______ ___________ ________
11 Computation of Earnings Per Share 11
27 Financial Data Schedule 12
<PAGE 11>
EXHIBIT 11
AMERICAN GAMING & ENTERTAINMENT, LTD.
COMPUTATION OF EARNINGS (LOSS) PER SHARE
Three Months Ended
March 31,
2000 1999
____ ____
Weighted average number
of shares for computation 12,533,948 12,532,102
========== ==========
Net loss $(136,000) $(1,863,000)
Dividends and accretion
on preferred stock 316,000 467,000
_______ _______
Net loss for common
Stockholders $(452,000) $(2,330,000)
========= ===========
Net loss for common
stockholders per common
share $(0.04) $(0.19)
====== ======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS OF AMERICAN GAMING &
ENTERTAINMENT, LTD. FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 424,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 459,000
<PP&E> 8,000
<DEPRECIATION> 3,000
<TOTAL-ASSETS> 464,000
<CURRENT-LIABILITIES> 128,000
<BONDS> 0
0
17,453,000
<COMMON> 126,000
<OTHER-SE> (17,453,000)
<TOTAL-LIABILITY-AND-EQUITY> 464,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 137,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (136,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (136,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (452,000)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
