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 June 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 July 13, 1996
$.001 par value Class A Common Stock 12,620,000 shares
<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 six
months ended June 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 June 30, 1996, the Company had $37,646 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 $34,441 for the three months ended June 30, 1996 compared with
$63,010 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 $223,983 for the three months ended June 30, 1996 compared
with $127,958 for the same period in 1995 for an increase of 75%. Cost of sales
for the three months ended June 30, 1996 were $61,667 compared to $46,086 for
the same period in 1995 for an increase of 34%.
General and administrative expenses were $180,068 for the three months
ended June 30, 1996 compared to $142,128 for the same period in 1995 for an
increase of 27%. Depreciation and amortization expense was $11,009 for the three
months ended June 30, 1996 compared to $2,640 for the same period in 1995 for an
increase of 317%. Interest expense for the three months ended June 30, 1996 was
$5,680 compared to $902 for the same period in 1995 for an increase of 530%.
<PAGE>
For the three months ended June 30, 1996 the Company had a net loss of
$28,166 and its subsidiary had net loss of $6,275 for consolidated net loss of
$34,441. For the three months ended June 30, 1995 the entire net loss of $63,010
belonged to the subsidiary.
At June 30, 1996 the Company's assets were $576 and the subsidiary's assets
were $270,328 for total consolidated assets of $270,904. Liabilities at June 30,
1996 were $280,087 for the Company and $152,576 for the subsidiary for total
consolidated liabilities of $432,663.
Net loss was $11,020 for the six months ended June 30, 1996 compared with
$58,513 for the same period in 1995.
Net revenue was $443,118 for the six months ended June 30, 1996 compared
with $222,947 for the same period in 1995, an increase of 99%. Cost of sales for
the six months ended June 30, 1996 were $108,869 compared with $78,127 for the
same period in 1995, an increase of 39%.
General and administrative expenses were $312,149 for the six months ended
June 30, 1996 compared with $196,746 for the same period in 1995, an increase of
59%. Depreciation and amortization expense was $22,017 for the six months ended
June 30, 1996 compared with $5,507 for the same period in 1995, an increase of
299%. Interest expense for the six months ended June 30, 1996 was $11,103
compared with $1,080 for the same period in 1995, an increase of 928%.
For the six months ended June 30, 1996 the Company had a net loss of
$33,246 and its subsidiary had net income of $22,226 for consolidated net loss
of $11,020.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 Financial Data Schedule
99-1 Financial Statements as of June 30, 1996
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and 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: July 27, 1996 /S/ George C. Zilba
------------------------- -------------------
George C. Zilba, President and Director
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
June 30,
1996
ASSETS
CURRENT ASSETS
<S> <C>
Cash $ 37,646
Prepaid expenses 6,759
Inventory 10,536
----------------------
TOTAL CURRENT ASSETS 54,941
PROPERTY AND EQUIPMENT 209,411
OTHER ASSETS
Security deposits 6,552
$ 270,904
======================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 14,278
Bridge loans 215,000
Current portion of long-term debt 3,978
Accrued expenses 19,326
Accrued expenses - related parties 169,650
----------------------
TOTAL CURRENT LIABILITIES 422,232
LONG-TERM DEBT 10,431
TOTAL LIABILITIES 432,663
STOCKHOLDERS' (DEFICIT) Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 12,500,000 shares 12,500
Additional paid-in capital 175,563
Deficit accumulated during the development stage (349,822)
----------------------
TOTAL STOCKHOLDERS' DEFICIT (161,759)
$ 270,904
======================
</TABLE>
<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 Six months ended (Date of
June 30, June 30, inception)
1996 1995 1996 1995 to 6/30/96
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 223,983 $ 127,958 $ 443,118 $ 222,947 $ 1,195,421
Cost of sales 61,667 46,086 108,869 78,127 393,574
------------- ------------- ------------- ------------- -----------------
GROSS PROFIT 162,316 81,872 334,249 144,820 801,847
General and Administrative expenses 180,068 142,128 312,149 196,746 1,046,583
Depreciation and amortization 11,009 2,640 22,017 5,507 57,646
Interest expense 5,680 902 11,103 1,080 47,440
------------- ------------- ------------- ------------- -----------------
196,757 145,670 345,269 203,333 1,151,669
------------- ------------- ------------- ------------- -----------------
NET INCOME (LOSS)
BEFORE INCOME TAXES (34,441) (63,798) (11,020) (58,513) (349,822)
INCOME TAX (BENEFIT) 0 (788) v 0 0 0
------------- ------------- ------------- ------------- -----------------
NET INCOME (LOSS) $ (34,441) $ (63,010) $ (11,020) $ (58,513) $ (349,822)
============= ============= ============= ============= =================
Net income (loss) per weighted
average share $ (.00) $ (.00) $ (.00) $ (.00)
============= ============= ============= =============
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 12,500,000 11,000,000 12,500,000 11,000,000
============= ============= ============= =============
</TABLE>
<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)
Net loss for period (11,020)
------------- ------------- ----------------- ----------------- ------------------
Balances at 6/30/96 12,500,000 $ 12,500 $ 175,563 $ 0 $ (349,822)
============= ============= ================= ================= ==================
</TABLE>
* Transaction actually occurred July 10, 1995 but is reflected earlier under
the pooling-of-interests method of accounting.
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
3/14/90
Six months ended (Date of
June 30, inception)
1996 1995 to 6/30/96
------------------ ----------------- --------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net (loss) $ (11,020) $ (58,513) $ (349,822)
Adjustments to reconcile net (loss) to cash provided (used) by operating
activities:
Depreciation & amortization 22,017 5,507 57,646
Changes in assets and liabilities:
Inventory (3,436) (125) (10,536)
Prepaid expenses (6,759) 0 (6,759)
Accounts payable (38,479) 11,385 14,278
Accrued expenses 55,171 (9,000) 188,976
------------------ ----------------- ----------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 17,494 (50,746) (106,217)
INVESTING ACTIVITIES
Purchase of property and equipment (8,520) (78,494) (231,104)
Security deposits 0 (5,335) (6,552)
------------------ ----------------- ----------------
NET CASH USED BY
INVESTING ACTIVITIES (8,520) (83,829) (237,656)
FINANCING ACTIVITIES
Proceeds from sale of common stock 0 0 188,063
Loan proceeds 5,000 200,000 215,000
Loan repayments (1,845) (1,263) (21,544)
------------------ ----------------- ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 3,155 198,737 381,519
------------------ ----------------- ----------------
INCREASE IN CASH
AND CASH EQUIVALENTS 12,129 64,162 37,646
Cash and cash equivalents at beginning of year 25,517 21,141 0
------------------ ----------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 37,646 $ 85,303 $ 37,646
================== ================= ================
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 2,603 $ 1,080 $ 32,553
================== ================= ================
</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.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Noram Gaming
and Entertainment, Inc. and Subsidiary June 30, 1996 financial statements and is
qualified in its entirety by reference to such financial statements
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 37,646
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 10,536
<CURRENT-ASSETS> 54,941
<PP&E> 267,057
<DEPRECIATION> (57,646)
<TOTAL-ASSETS> 270,904
<CURRENT-LIABILITIES> 422,232
<BONDS> 0
0
0
<COMMON> 12,500
<OTHER-SE> (174,259)
<TOTAL-LIABILITY-AND-EQUITY> 270,904
<SALES> 443,118
<TOTAL-REVENUES> 443,118
<CGS> 108,869
<TOTAL-COSTS> 108,869
<OTHER-EXPENSES> 334,166
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,103
<INCOME-PRETAX> (11,020)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,020)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,020)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
