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, 2000
--------------
[] 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.)
FIVE 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, 2000
------------------------------------ ---------------------------------
$.001 par value Class A Common Stock 20,137,671 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, 2000, are not necessarily indicative of the results that
can be expected for the year ending December 31, 2000.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2000, the Company had $599 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 selling bingo
equipment.
Effective April 1, 2000, the Company's subsidiary ceased operations. All
assets, liabilities, and operations are those of the Company.
Net loss was $44,178 for the three months ended June 30, 2000 compared with
net income of $31,152 for the same period in 1999. The Company was able to
reduce its general and administrative expenses substantially in 2000 compared to
1999. In 1999, the Company sold a facility which generated a gain for the
quarter.
Net revenue was $110 for the three months ended June 30, 2000 compared with
$49,804 for the same period in 1999 for a decrease of 99%. The decrease in
revenues is attributed to the decision by the Company to discontinue the bingo
operations and concentrate on selling bingo equipment. Cost of sales for the
three months ended June 30, 2000 were $925 compared to $24,166 for the same
period in 1999 for a decrease of 96%.
General and administrative expenses were $39,829 for the three months ended
June 30, 2000 compared to $150,686 for the same period in 1999 for a decrease of
74%. Depreciation and amortization expense was $2,058 for the three months ended
June 30, 2000 compared to $2,564
2
<PAGE>
for the same period in 1999 for a decrease of 20%. Interest expense for the
three months ended June 30, 2000 was $1,476 compared to $4,442 for the same
period in 1999 for a decrease of 67%.
Net loss was $95,958 for the six months ended June 30, 2000 compared with
net income of $9,748 for the same period in 1999. The Company was able to reduce
its general and administrative expenses substantially in 2000 compared to 1999.
In 1999, the Company sold a facility which generated a gain for the six months.
Net revenue was $12,806 for the six months ended June 30, 2000 compared
with $209,654 for the same period in 1999 for a decrease of 94%. The decrease in
revenues is attributed to the decision by the Company to discontinue the bingo
operations and concentrate on selling bingo equipment. Cost of sales for the six
months ended June 30, 2000 were $7,981 compared to $37,792 for the same period
in 1999 for a decrease of 79%.
General and administrative expenses were $87,383 for the six months ended
June 30, 2000 compared to $311,569 for the same period in 1999 for a decrease of
72%. Depreciation and amortization expense was $4,116 for the six months ended
June 30, 2000 compared to $7,752 for the same period in 1999 for a decrease of
47%. Interest expense for the six months ended June 30, 2000 was $9,284 compared
to $5,999 for the same period in 1999 for an increase of 55%.
During the quarter ended June 30, 2000, the President's son, who is not an
officer or director, agreed to assume liabilities of $432,222 in exchange for
3,758,471 shares of the Company's common stock. The son intends to use the stock
to retire his obligations to the previous creditors.
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, 2000
(b) Reports on Form 8-K
None
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 21, 2000 /s/ George C. Zilba
---------------- ---------------------------------------
George C. Zilba, President and Director
3
<PAGE>
NORAM GAMING AND ENTERTAINMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------------ -----------------
ASSETS (Unaudited) (Audited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 599 $ 429
Contract Receivable 0 22,429
Loan receivable - officer 10,956 0
Inventory 116,341 123,837
------------------ -----------------
TOTAL CURRENT ASSETS 127,896 146,695
PROPERTY AND EQUIPMENT 10,204 14,320
------------------ -----------------
$ 138,100 $ 161,015
================== =================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 5,199 $ 37,486
Bridge loans 215,000 259,000
Current portion of long-term debt 14,840 14,189
Demand loans payable - related parties 54,855 302,824
Accrued expenses 101,493 96,479
Accrued expenses - related parties 133,250 166,250
------------------ -----------------
TOTAL CURRENT LIABILITIES 524,637 876,228
LONG-TERM DEBT 48,387 55,974
------------------ -----------------
TOTAL LIABILITIES 573,024 932,202
STOCKHOLDERS' (DEFICIT)
Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 20,137,671 shares
(16,379,200 in 1999) 20,138 16,379
Additional paid-in capital 2,066,211 1,637,749
Deficit accumulated during the development stage (2,521,273) (2,425,315)
------------------ -----------------
TOTAL STOCKHOLDERS' DEFICIT (434,924) (771,187)
------------------ -----------------
$ 138,100 $ 161,015
================== =================
</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)
2000 1999 2000 1999 to 6/30/00
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 110 $ 49,804 $ 12,806 $ 209,654 $ 3,436,803
Cost of sales 925 24,166 7,981 37,792 971,838
------------- ------------- ------------- ------------- -------------
GROSS PROFIT (815) 25,638 4,825 171,862 2,464,965
General and Administrative expenses 39,829 150,686 87,383 311,569 4,515,967
Depreciation and amortization 2,058 2,564 4,116 7,752 135,735
Interest expense 1,476 4,442 9,284 5,999 150,485
------------- ------------- ------------- ------------- -------------
43,363 157,692 100,783 325,320 4,802,187
------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) BEFORE OTHER (44,178) (132,054) (95,958) (153,458) (2,337,222)
Termination of facility lease 0 0 0 0 (154,604)
Joint venture loss 0 0 0 0 (152,515)
Gain on facility sale 0 182,422 0 182,422 182,422
Loss on equipment disposal 0 (19,216) 0 (19,216) (59,354)
------------- ------------- ------------- ------------- -------------
0 163,206 0 163,206 (184,051)
------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS)
BEFORE INCOME TAXES (44,178) 31,152 (95,958) 9,748 (2,521,273)
INCOME TAX (BENEFIT) 0 0 0 0 0
------------- ------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (44,178) $ 31,152 $ (95,958) $ 9,748 $ (2,521,273)
============= ============= ============= ============= =============
Net income (loss) per weighted
average share $ (.00) $ .00 $ (.01) $ .00
============= ============= ============= =============
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 17,246,539 16,260,949 16,812,870 16,195,326
============= ============= ============= =============
</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
Six Months Ended (Date of
June 30, inception)
2000 1999 to 6/30/00
------------------ ----------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ (95,958) $ 9,748 $ (2,521,273)
Adjustments to reconcile net income (loss) to cash
provided (used) by operating activities:
Net book value of terminated lease 0 0 154,604
Book value of disposed assets 0 42,502 82,640
Joint venture loss non-cash 0 0 152,515
Stock issued for services and expenses 0 17,325 1,206,865
Depreciation & amortization 4,116 7,752 148,971
Changes in assets and liabilities:
Inventory 7,496 13,932 (116,341)
Accounts receivable (10,956) 0 (10,956)
Prepaid expenses 0 12,845 0
Accounts payable 3,512 (59,094) 5,199
Accrued expenses 76,467 19,319 338,898
------------------ ----------------- ----------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (15,323) 64,329 (558,878)
INVESTING ACTIVITIES
Purchase of property and equipment 0 0 (275,467)
Security deposits 0 9,886 0
Contract receivable 0 (43,346) (50,000)
Contract collections 22,429 0 50,000
Investment in joint venture 0 0 (152,515)
------------------ ----------------- ----------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 22,429 (33,460) (427,982)
FINANCING ACTIVITIES
Proceeds from sale of common stock 0 5,500 338,163
Loan proceeds 0 48,000 760,249
Loan repayments (6,936) (65,089) (110,953)
------------------ ----------------- ----------------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (6,936) (11,589) 987,459
------------------ ----------------- ----------------
INCREASE IN CASH
AND CASH EQUIVALENTS 170 19,280 599
Cash and cash equivalents at beginning of period 429 15,721 0
------------------ ----------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 599 $ 35,001 $ 599
================== ================= ================
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 9,284 $ 5,999 $ 51,848
================== ================= ================
</TABLE>
F-3
