UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1996
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from to
Commission File Number 33-55254-37
NORAM GAMING AND ENTERTAINMENT, INC.
(Exact name of Registrant as specified in its charter)
Nevada 87-0485316
(State or other jurisdiction of (IRS Employer
incorporation ) Identification No.)
THREE CANTON SQUARE
TOLEDO, OHIO 43624
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 255-1515
Indicate by a 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 [X] Yes [ ] No
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of October 17, 1996
- ------------------------------------ -----------------------------------
$.001 par value Class A Common Stock 12,640,000 shares
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BASIS OF PRESENTATION
General
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and, therefore, do not include
all information and footnotes necessary for a complete presentation of financial
position, results of operations, cash flows, and stockholders' deficit in
conformity with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature. Operating results for the nine
months ended September 30, 1996, are not necessarily indicative of the results
that can be expected for the year ending December 31, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Company had $42,686 cash in the bank. There
is no certainty that the Company can meet its current financial commitments.
The Company is a development stage company engaged in the leasing of
facilities to charities that conduct bingo operations.
Net loss was $99,513 for the three months ended September 30, 1996 compared
with $104,089 for the same period in 1995. All increases in revenues, cost of
sales and expenses for 1996 can be attributed to the fact that the Company had
more facilities in operation than in 1995.
Net revenue was $189,013 for the three months ended September 30, 1996
compared with $107,463 for the same period in 1995 for an increase of 76%. Cost
of sales for the three months ended September 30, 1996 was $34,220 compared to
$58,487 for the same period in 1995 for a decrease of 41%.
General and administrative expenses were $165,603 for the three months
ended September 30, 1996 compared to $141,886 for the same period in 1995 for an
increase of 17%. Depreciation and amortization expense was $7,938 for the three
months ended September 30, 1996 compared to $10,265 for the same period in 1995
for a decrease of 23%. Interest expense for the three months ended September 30,
1996 was $6,161 compared to $914 for the same period in 1995 for an increase of
574%.
2
<PAGE>
For the three months ended September 30, 1996 the Company had a net loss of
$7,722 and its subsidiary had net a loss of $91,791 for a consolidated net loss
of $99,513. For the three months ended September 30, 1995 the entire net loss of
$104,089 belonged to the subsidiary.
At September 30, 1996 the Company's assets were $8,471 and the subsidiary's
assets were $193,016 for total consolidated assets of $201,487. Liabilities at
September 30, 1996 were $284,387 for the Company and $178,252 for the subsidiary
for total consolidated liabilities of $462,639.
Net loss was $110,533 for the nine months ended September 30, 1996 compared
with $162,602 for the same period in 1995. Included in the net loss for the
three and nine months ended September 30, 1996 is a loss of $74,604 recognized
when the Company abandoned one of its facilities since the operation was not
profitable.
Net revenue was $632,131 for the nine months ended September 30, 1996
compared with $330,410 for the same period in 1995, an increase of 91%. Cost of
sales for the nine months ended September 30, 1996 were $143,089 compared with
$136,614 for the same period in 1995, an increase of 5%.
General and administrative expenses were $477,752 for the nine months ended
September 30, 1996 compared with $338,632 for the same period in 1995, an
increase of 41%. Depreciation and amortization expense was $29,955 for the nine
months ended September 30, 1996 compared with $15,772 for the same period in
1995, an increase of 90%. Interest expense for the nine months ended September
30, 1996 was $17,264 compared with $1,994 for the same period in 1995, an
increase of 766%.
For the nine months ended September 30, 1996 the Company had a net loss of
$40,968 and its subsidiary had a net loss of $69,565 for a consolidated net loss
of $110,533.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Page
99-1 Financial Statements as of September 30, 1996 F-1
27 Financial Data Schedule
(b) Reports on Form 8-K
None
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORAM GAMING AND ENTERTAINMENT, INC.
DATED: November 13, 1996 /S/ George C. Zilba
----------------------
George C. Zilba, President and Director
4
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30,
1996
---------------------
ASSETS
CURRENT ASSETS
<S> <C>
Cash $ 42,686
Prepaid expenses 3,759
Inventory 16,622
----------------------
TOTAL CURRENT ASSETS 63,067
PROPERTY AND EQUIPMENT 131,868
OTHER ASSETS
Security deposits 6,552
----------------------
$ 201,487
======================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 18,206
Bridge loans 215,000
Current portion of long-term debt 4,078
Accrued expenses 24,581
Accrued expenses - related parties 191,400
----------------------
TOTAL CURRENT LIABILITIES 453,265
LONG-TERM DEBT 9,374
----------------------
TOTAL LIABILITIES 462,639
STOCKHOLDERS' (DEFICIT) Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 12,620,000 shares 12,620
Additional paid-in capital 175,563
Deficit accumulated during the development stage (449,335)
----------------------
TOTAL STOCKHOLDERS' DEFICIT (261,152)
----------------------
$ 201,487
======================
</TABLE>
F - 1
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
3/14/90
Three months ended Nine months ended (Date of
September 30, September 30, inception)
1996 1995 1996 1995 to 9/30/96
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 189,013 $ 107,463 $ 632,131 $ 330,410 $ 1,384,434
Cost of sales 34,220 58,487 143,089 136,614 427,794
------------- ------------- ------------- ------------- -----------------
GROSS PROFIT 154,793 48,976 489,042 193,796 956,640
General and Administrative expenses 165,603 141,886 477,752 338,632 1,212,186
Depreciation and amortization 7,938 10,265 29,955 15,772 65,584
Interest expense 6,161 914 17,264 1,994 53,601
------------- ------------- ------------- ------------- -----------------
179,702 153,065 524,971 356,398 1,331,371
------------- ------------- ------------- ------------- -----------------
NET (LOSS) BEFORE OTHER (24,909) (104,089) (35,929) (162,602) (374,731)
Abandonment of property (74,604) 0 (74,604) 0 (74,604)
------------- ------------- ------------- ------------- -----------------
NET (LOSS)
BEFORE INCOME TAXES (99,513) (104,089) (110,533) (162,602) (449,335)
INCOME TAX 0 0 0 0 0
------------- ------------- ------------- ------------- -----------------
NET (LOSS) $ (99,513) $ (104,089) $ (110,533) $ (162,602) $ (449,335)
============= ============= ============= ============= =================
Net (loss) per weighted
average share $ (.01) $ (.01) $ (.01) $ (.01)
============= ============= ============= =============
Weighted average number of common
shares used to compute net (loss)
per weighted average share 12,608,261 11,000,000 12,536,350 11,000,000
============= ============= ============= =============
</TABLE>
F - 2
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional Stock During
Par Value $.001 Paid-in Subscription Development
Shares Amount Capital Receivable Stage
------------- ------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Balances at 3/14/90 (Date of inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted)
at $.001 per share at 3/14/90 1,000,000 1,000 (1,000)
Net income for period 0
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/90 1,000,000 1,000 0 (1,000) 0
Cash received for stock subscription 1,000
Net loss for year (1,000)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/91 1,000,000 1,000 0 0 (1,000)
Net income for year 0
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/92 1,000,000 1,000 0 0 (1,000)
Net income for year 0
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/93 1,000,000 1,000 0 0 (1,000)
Issuance of common stock (restricted)
for subsidiary at $.001 per share* 10,000,000 10,000 27,063
Net income for year 9,537
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/94 11,000,000 11,000 27,063 0 8,537
Sale of common stock (Regulation S)
at $.10 per share at 8/30/95 1,500,000 1,500 148,500
Net loss for year (347,339)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/95 12,500,000 12,500 175,563 0 (338,802)
Issuance of common stock (restricted)
at $.001 per share for services at
7/9/96 120,000 120
Net loss for period (110,533)
------------- ------------- ----------------- ----------------- ------------------
Balances at 9/30/96 12,620,000 $ 12,620 $ 175,563 $ 0 $ (449,335)
============= ============= ================= ================= ==================
</TABLE>
* Transaction actually occurred July 10, 1995 but is reflected earlier
under the pooling-of-interests method of accounting.
F - 3
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
3/14/90
Nine months ended (Date of
September 30, inception)
1996 1995 to 9/30/96
------------------ ----------------- --------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net (loss) $ (110,533) $ (162,602) $ (449,335)
Adjustments to reconcile net (loss) to cash provided (used) by operating
activities:
Net book value of abandoned asset 69,605 0 69,605
Stock issued for expenses 120 0 120
Depreciation & amortization 29,955 15,772 65,584
Changes in assets and liabilities:
Inventory (9,522) (3,312) (16,622)
Prepaid expenses (3,759) 0 (3,759)
Accounts payable (34,551) 18,339 18,206
Accrued expenses 82,176 (5,165) 215,981
------------------ ----------------- ----------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 23,491 (136,968) (100,220)
INVESTING ACTIVITIES
Purchase of property and equipment (8,520) (153,509) (231,104)
Security deposits 0 (6,552) (6,552)
------------------ ----------------- ----------------
NET CASH USED BY
INVESTING ACTIVITIES (8,520) (160,061) (237,656)
FINANCING ACTIVITIES
Proceeds from sale of common stock 0 150,000 188,063
Loan proceeds 5,000 200,000 215,000
Loan repayments (2,802) (1,263) (22,501)
------------------ ----------------- ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 2,198 348,737 380,562
------------------ ----------------- ----------------
INCREASE IN CASH
AND CASH EQUIVALENTS 17,169 51,708 42,686
Cash and cash equivalents at beginning of year 25,517 21,141 0
------------------ ----------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 42,686 $ 72,849 $ 42,686
================== ================= ================
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 4,464 $ 1,994 $ 34,414
================== ================= ================
</TABLE>
During 1995, the Company's subsidiary financed a van in the amount of
$17,143 and in 1994 financed an automobile in the amount of $18,810.
F - 4
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Noram
Gaming and Entertainment, Inc. and Subsidiary September 30, 1996 financial
statements and is qualified in its entirety by reference to such financial
statements
</LEGEND>
<CIK> 0000894555
<NAME> Noram Gaming & Entertainment Inc.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 42,686
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 16,622
<CURRENT-ASSETS> 63,067
<PP&E> 192,056
<DEPRECIATION> (60,188)
<TOTAL-ASSETS> 201,487
<CURRENT-LIABILITIES> 453,265
<BONDS> 0
0
0
<COMMON> 12,620
<OTHER-SE> (273,772)
<TOTAL-LIABILITY-AND-EQUITY> 201,487
<SALES> 632,131
<TOTAL-REVENUES> 632,131
<CGS> 143,089
<TOTAL-COSTS> 143,089
<OTHER-EXPENSES> 599,575
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,264
<INCOME-PRETAX> (110,533)
<INCOME-TAX> 0
<INCOME-CONTINUING> (35,929)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (110,533)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
