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, 1998
[] 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 [] Yes [X] 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 September 30, 1998
- ------------------------------------ ------------------------------------
$.001 par value Class A Common Stock 15,833,964 shares
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BASIS OF PRESENTATION
General
The accompanying unaudited financial statements (F-1 through F-3) 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, 1998, are not necessarily
indicative of the results that can be expected for the year ending December 31,
1998.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1998, the Company had $19,784 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 $23,505 for the three months ended September 30, 1998 compared
with $39,618 for the same period in 1997. All increases in revenues, cost of
sales, and expenses for 1998 can be attributed to growth in the market place and
improved management controls over existing operations.
Net revenue was $221,600 for the three months ended September 30, 1998
compared with $218,708 for the same period in 1997, for an increase of 1%. Cost
of sales for the three months ended September 30, 1998 was $46,021 compared to
$44,384 for the same period in 1997, for an increase of 4%.
General and administrative expenses were $173,346 for the three months
ended September 30, 1998 compared to $190,447 for the same period in 1997, for a
decrease of 9%. Depreciation and amortization expense was $6,347 for the three
months ended September 30, 1998 compared to $7,803 for the same period in 1997,
for a decrease of 19%. Interest expense for the three months
2
<PAGE>
ended September 30, 1998 was $641 compared to $5,212 for the same period in
1997, for a decrease of 88%.
For the three months ended September 30, 1998 the Company had a net loss of
$20,850, and its subsidiary had net a loss of $2,655, for a consolidated net
loss of $23,505. For the three months ended September 30, 1997 the consolidated
net loss was $39,618 ($15,439 from the Company and $24,179 from the subsidiary).
At September 30, 1998 the Company's assets were $199,903, and the
subsidiary's assets were $305,736, for total consolidated assets of $505,639.
Liabilities at September 30, 1998 were $496,387 for the Company and $301,121 for
the subsidiary, for total consolidated liabilities of $797,508.
Net loss was $139,454 for the nine months ended September 30, 1998 compared
with $921,591 for the same period in 1997. Included in the net loss for the
three and nine months ended September 30, 1998 is a loss of $18,750 and $70,550,
respectively, recognized when the Company issued stock for consulting services
related to expanding its product lines ($10,480 and $861,375 in 1997).
Net revenue was $557,596 for the nine months ended September 30, 1998
compared with $721,550 for the same period in 1997, a decrease of 23%. Cost of
sales for the nine months ended September 30, 1998 were $130,133 compared with
$154,268 for the same period in 1997, a decrease of 16%.
General and administrative expenses were $460,913 for the nine months ended
September 30, 1998 compared with $589,031 for the same period in 1997, a
decrease of 22%. Depreciation and amortization expense was $19,042 for the nine
months ended September 30, 1998 compared with $23,328 for the same period in
1997, a decrease of 18%. Interest expense for the nine months ended September
30, 1998 was $16,412 compared with $15,139 for the same period in 1997, an
increase of 8%.
For the nine months ended September 30, 1998 the Company had a net loss of
$87,210 and its subsidiary had a net loss of $52,244, for a consolidated net
loss of $139,454. For the nine months ended September 30, 1997 the consolidated
net loss was $921,591 ($886,973 from the Company and $34,618 from the
subsidiary).
3
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Page
99-1 Financial Statements as of September 30, 1998 F-1
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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: January 19, 2000 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 SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
ASSETS (Unaudited) (Audited)
------------------ ------------------
CURRENT ASSETS
<S> <C> <C>
Cash $ 19,784 $ 8,985
Account receivable 16,581 0
Prepaid expenses 16,604 9,159
Receivable - related party 5,000 5,000
Inventory 169,403 24,962
------------------ ------------------
TOTAL CURRENT ASSETS 227,372 48,106
PROPERTY AND EQUIPMENT 113,800 132,843
OTHER ASSETS
Security deposits 11,952 11,952
Investment in joint venture 152,515 152,515
------------------ ------------------
164,467 164,467
------------------ ------------------
$ 505,639 $ 345,416
================== ==================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 92,868 $ 51,241
Bridge loans 269,000 359,000
Current portion of long-term debt 4,860 4,617
Demand loans payable - related parties 287,707 210,918
Accrued expenses 53,323 50,782
Accrued expenses - related parties 89,750 89,750
------------------ ------------------
TOTAL CURRENT LIABILITIES 797,508 766,308
LONG-TERM DEBT 0 3,672
------------------ ------------------
TOTAL LIABILITIES 797,508 769,980
STOCKHOLDERS' (DEFICIT)
Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 15,833,964 shares (14,184,800 in 1997) 15,834 14,185
Additional paid-in capital 1,393,895 1,123,395
Deficit accumulated during the development stage (1,701,598) (1,562,144)
------------------ ------------------
TOTAL STOCKHOLDERS' DEFICIT (291,869) (424,564)
------------------ ------------------
$ 505,639 $ 345,416
================== ==================
</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)
1998 1997 1998 1997 to 9/30/98
------------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 221,600 $ 218,708 $ 557,596 $ 721,550 $ 3,009,534
Cost of sales 46,021 44,384 130,133 154,268 820,413
------------- ------------- ------------- ------------- -----------------
GROSS PROFIT 175,579 174,324 427,463 567,282 2,189,121
General and Administrative expenses 173,346 190,447 460,913 589,031 2,630,651
Depreciation and amortization 6,347 7,803 19,042 23,328 113,833
Interest expense 641 5,212 16,412 15,139 91,704
------------- ------------- ------------- ------------- -----------------
180,334 203,462 496,367 627,498 2,836,188
------------- ------------- ------------- ------------- -----------------
NET INCOME (LOSS) BEFORE OTHER (4,755) (29,138) (68,904) (60,216) (647,067)
Stock issued for consulting services (18,750) (10,480) (70,550) (861,375) (979,927)
Terminations of facility lease 0 0 0 0 (74,604)
------------- ------------- ------------- ------------- -----------------
NET (LOSS)
BEFORE INCOME TAXES (23,505) (39,618) (139,454) (921,591) (1,701,598)
INCOME TAX 0 0 0 0 0
------------- ------------- ------------- ------------- -----------------
NET (LOSS) $ (23,505) $ (39,618) $ (139,454) $ (921,591) $ (1,701,598)
============= ============= ============= ============= =================
Net (loss) per weighted
average share $ (.00) $ (.00) $ (.01) $ (.07)
============= ============= ============= =============
Weighted average number of common
shares used to compute net (loss)
per weighted average share 15,705,223 13,947,577 15,035,700 13,609,321
============= ============= ============= =============
</TABLE>
F - 2
<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)
1998 1997 to 9/30/98
----------------- ----------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net (loss) $ (139,454) $ (921,591) $ (1,701,598)
Adjustments to reconcile net (loss) to cash
provided (used) by operating activities:
Net book value of abandoned asset 0 0 69,605
Stock issued for expenses 76,850 861,375 986,227
Depreciation & amortization 19,042 23,328 127,069
Changes in assets and liabilities:
Accounts receivable (16,581) 0 (16,581)
Inventory (144,440) 4,823 (169,403)
Prepaid expenses (7,445) (3,726) (16,604)
Accounts payable 32,238 5,312 92,868
Accrued expenses 21,030 (3,537) 147,314
----------------- ----------------- ----------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (158,760) (34,016) (481,103)
INVESTING ACTIVITIES
Purchase of property and equipment 0 (4,225) (274,522)
Security deposits 0 (5,400) (11,952)
Investment in joint venture 0 0 (152,515)
----------------- ----------------- ----------------
NET CASH USED BY
INVESTING ACTIVITIES 0 (9,625) (438,989)
FINANCING ACTIVITIES
Proceeds from sale of common stock 96,200 0 324,263
Loan proceeds 76,789 44,000 646,707
Loan repayments (3,430) (3,096) (31,094)
----------------- ----------------- ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 169,559 40,904 939,876
----------------- ----------------- ----------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 10,799 (2,737) 19,784
Cash and cash equivalents at beginning of year 8,985 49,078 0
----------------- ----------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 19,784 $ 46,341 $ 19,784
================= ================= ================
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 16,412 $ 623 $ 48,740
================= ================= ================
</TABLE>
F - 3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Noram
Gaming and Entertainment, Inc. and Subsidiary September 30, 1998 financial
statements and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000894555
<NAME> Noram Gaming & Entertainment, Inc.
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1.00
<CASH> 19,784
<SECURITIES> 0
<RECEIVABLES> 16,581
<ALLOWANCES> 0
<INVENTORY> 169,403
<CURRENT-ASSETS> 227,372
<PP&E> 235,475
<DEPRECIATION> (121,675)
<TOTAL-ASSETS> 505,639
<CURRENT-LIABILITIES> 797,508
<BONDS> 0
0
0
<COMMON> 15,834
<OTHER-SE> (307,703)
<TOTAL-LIABILITY-AND-EQUITY> 505,639
<SALES> 557,596
<TOTAL-REVENUES> 557,596
<CGS> 130,133
<TOTAL-COSTS> 130,133
<OTHER-EXPENSES> 496,367
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,412
<INCOME-PRETAX> (139,454)
<INCOME-TAX> 0
<INCOME-CONTINUING> (139,454)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (139,454)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
