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, 1997
[ ] 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 Small Business Issuer 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)
Issuer's telephone number, including area code: (419) 255-1515
Indicate by a check mark whether the issuer (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 issuer 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 issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of June 30, 1997
- ------------------------------------ ----------------------------------
$.001 par value Class A Common Stock 13,926,300 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 six
months ended June 30, 1997, are not necessarily indicative of the results that
can be expected for the year ending December 31, 1997.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997, the Company had $60,819 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 $377,312 for the three months ended June 30, 1997 compared
with $34,441 for the same period in 1996. All increases in revenues, cost of
sales and expenses for 1997 can be attributed to the fact that the Company had
more facilities in operation than in 1996.
Net revenue was $167,930 for the three months ended June 30, 1997 compared
with $223,983 for the same period in 1996 for a decrease of 25%. Cost of sales
for the three months ended June 30, 1997 were $48,310 compared to $61,667 for
the same period in 1996 for a decrease of 22%.
General and administrative expenses were $192,175 for the three months
ended June 30, 1997 compared to $180,068 for the same period in 1996 for an
increase of 7%. Depreciation and amortization expense was $7,803 for the three
months ended June 30, 1997 compared to $11,009 for the same period in 1996 for a
decrease of 29%. Interest expense for the three
2
<PAGE>
months ended June 30, 1997 was $5,027 compared to $5,680 for the same period in
1996 for a decrease of 11%.
During the three months ended June 30, 1997, the Company issued 347,800
shares of its common stock for consulting services valued at $291,927 in
connection with the development of new overseas markets for the Company's
services.
For the three months ended June 30, 1997 the Company had a net loss of
$296,887 and its subsidiary had a net loss of $80,425 for consolidated net loss
of $377,312. For the three months ended June 30, 1996, the Company's loss was
$28,166 and the subsidiary's loss was $6,275, for a consolidated net loss of
$34,441.
At June 30, 1997 the Company's assets were $8,195 and the subsidiary's
assets were $211,334 for total consolidated assets of $219,529. Liabilities at
June 30, 1997 were $342,517 for the Company and $187,666 for the subsidiary for
total consolidated liabilities of $530,183.
Net loss was $881,973 for the six months ended June 30, 1997 compared with
$11,020 for the same period in 1996.
Net revenue was $502,842 for the six months ended June 30, 1997 compared
with $443,118 for the same period in 1996, an increase of 13%. Cost of sales for
the six months ended June 30, 1997 were $109,884 compared with $108,869 for the
same period in 1996, an increase of 1%.
General and administrative expenses were $398,584 for the six months ended
June 30, 1997 compared with $312,149 for the same period in 1996, an increase of
28%. Depreciation and amortization expense was $15,525 for the six months ended
June 30, 1997 compared with $22,017 for the same period in 1996, a decrease of
29%. Interest expense for the six months ended June 30, 1997 was $9,927 compared
with $11,103 for the same period in 1996, a decrease of 11%.
For the six months ended June 30, 1997 the Company had a net loss of
$871,534 and its subsidiary had a net loss of $10,439 for consolidated net loss
of $881,973.
During the six months ended June 30, 1997, the Company issued 1,286,300
shares of its common stock for consulting services valued at $850,895 in
connection with the development of new overseas markets for the Company's
services.
3
<PAGE>
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, 1997
(b) Reports on Form 8-K
None
4
<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: August 18, 1997 /s/ George C. Zilba
----------------------- -------------------
George C. Zilba, President and Director
5
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
June 30,
1997
----------------------
ASSETS
CURRENT ASSETS
<S> <C>
Cash $ 60,819
Prepaid expenses 16,157
Receivable - related party 5,000
Inventory 16,427
----------------------
TOTAL CURRENT ASSETS 98,403
PROPERTY AND EQUIPMENT 109,174
OTHER ASSETS
Security deposits 11,952
----------------------
$ 219,529
======================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 30,313
Bridge loans 215,000
Current portion of long-term debt 4,394
Accrued expenses 41,359
Accrued expenses - related parties 189,079
----------------------
TOTAL CURRENT LIABILITIES 480,145
LONG-TERM DEBT 50,038
----------------------
TOTAL LIABILITIES 530,183
STOCKHOLDERS' (DEFICIT)
Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 13,926,300 shares 13,926
Additional paid-in capital 1,025,172
Deficit accumulated during the development stage (1,349,752)
----------------------
TOTAL STOCKHOLDERS' DEFICIT (310,654)
----------------------
$ 219,529
======================
</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 Six months ended (Date of
June 30, June 30, inception)
1997 1996 1997 1996 to 6/30/97
------------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 167,930 $ 223,983 $ 502,842 $ 443,118 $ 2,110,058
Cost of sales 48,310 61,667 109,884 108,869 602,291
------------- ------------- ------------- ------------- -----------------
GROSS PROFIT 119,620 162,316 392,958 334,249 1,507,767
General and Administrative expenses 192,175 180,068 398,584 312,149 1,787,858
Depreciation and amortization 7,803 11,009 15,525 22,017 79,267
Interest expense 5,027 5,680 9,927 11,103 64,895
------------- ------------- ------------- ------------- -----------------
205,005 196,757 424,036 345,269 1,932,020
------------- ------------- ------------- ------------- -----------------
NET INCOME (LOSS)
BEFORE OTHER (85,385) (34,441) (31,078) (11,020) (424,253)
Stock issued for consulting services (291,927) 0 (850,895) 0 (850,895)
Termination of facility lease 0 0 0 0 (74,604)
------------- ------------- ------------- ------------- -----------------
NET INCOME (LOSS)
BEFORE INCOME TAXES (377,312) (34,441) (881,973) (11,020) (1,349,752)
INCOME TAX (BENEFIT) 0 0 0 0 0
------------- ------------- ------------- ------------- -----------------
NET INCOME (LOSS) $ (377,312) $ (34,441) $ (881,973) $ (11,020) $ (1,349,752)
============= ============= ============= ============= =================
Net income (loss) per weighted
average share $ (.03) $ (.00) $ (.07) $ (.00)
============= ============= ============= =============
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 13,844,457 12,500,000 13,437,388 12,500,000
============= ============= ============= =============
</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
Common Stock Accumulated
Par Value $.001 Additional Stock During
----------------------------- 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
7/9/96 140,000 140
Net loss for year (128,977)
------------- ------------- ----------------- ----------------- ------------------
Balances at 12/31/96 12,640,000 12,640 175,563 0 (467,779)
Issuance of common stock for
services at:
$.50 per share 1/27/97 460,000 460 229,540
$.6875 per share 3/19/97 478,500 478 328,490
$1.0625 per share 4/11/97 50,000 50 53,075
$.8125 per share 4/22/97 285,000 285 231,277
$.7187 per share 5/1/97 6,300 6 4,522
$.484 per share 5/22/97 3,000 3 1,449
$.36 per share 6/18/97 3,500 4 1,256
Net loss for period (881,973)
------------- ------------- ----------------- ----------------- ------------------
Balances at 6/30/97 13,926,300 $ 13,926 $ 1,025,172 $ 0 $ (1,349,752)
============= ============= ================= ================= ==================
</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
Six months ended (Date of
June 30, inception)
1997 1996 to 6/30/97
------------------ ----------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ (881,973) $ (11,020) $ (1,349,752)
Adjustments to reconcile net income (loss) to cash
provided (used) by operating activities:
Net book value of terminated lease 0 0 69,605
Stock issued for services and expenses 850,895 0 851,035
Depreciation & amortization 15,525 22,017 92,503
Changes in assets and liabilities:
Inventory 5,128 (3,436) (16,427)
Prepaid expenses (5,400) (6,759) (16,157)
Accounts payable 2,567 (38,479) 30,313
Accrued expenses (7,338) 55,171 225,438
------------------- ----------------- ----------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (20,596) 17,494 (113,442)
INVESTING ACTIVITIES
Purchase of property and equipment (4,225) (8,520) (235,329)
Security deposits (5,400) 0 (11,952)
------------------ ----------------- ----------------
NET CASH USED BY
INVESTING ACTIVITIES (9,625) (8,520) (247,281)
FINANCING ACTIVITIES
Proceeds from sale of common stock 0 0 188,063
Loan proceeds 44,000 5,000 259,000
Loan repayments (2,038) (1,845) (25,521)
------------------- ------------------ ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 41,962 3,155 421,542
------------------ ----------------- ----------------
INCREASE IN CASH
AND CASH EQUIVALENTS 11,741 12,129 60,819
Cash and cash equivalents at beginning of period 49,078 25,517 0
------------------ ----------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 60,819 $ 37,646 $ 60,819
================== ================= ================
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 371 $ 2,603 $ 31,852
================== ================= ================
</TABLE>
F-4
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Noram Gaming
and Entertainment, Inc. and Subsidiary June 30, 1997 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 60,819
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 16,427
<CURRENT-ASSETS> 98,403
<PP&E> 196,282
<DEPRECIATION> (87,108)
<TOTAL-ASSETS> 219,529
<CURRENT-LIABILITIES> 480,145
<BONDS> 0
<COMMON> 13,926
0
0
<OTHER-SE> (324,580)
<TOTAL-LIABILITY-AND-EQUITY> 219,529
<SALES> 502,842
<TOTAL-REVENUES> 502,842
<CGS> 109,884
<TOTAL-COSTS> 109,884
<OTHER-EXPENSES> 414,109
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,927
<INCOME-PRETAX> (881,973)
<INCOME-TAX> 0
<INCOME-CONTINUING> (31,078)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (881,973)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
