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, 1999
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[] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission File Number 33-55254-37
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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.)
FIVE 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 December 31, 1999
- ------------------------------------ -----------------------------------
$.001 par value Class A Common Stock 16,379,200 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 six months ended June 30, 1999, are not necessarily indicative
of the results that can be expected for the year ending December 31, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1999, the Company had $35,001 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 and selling bingo
equipment.
Net income was $31,152 for the three months ended June 30, 1999 compared
with $23,177 for the same period in 1998.
Net revenue was $49,804 for the three months ended June 30, 1999 compared
with $139,324 for the same period in 1998, for a decrease of 64%. The decrease
in revenues is attributed to the decision of the Company to dispose of the bingo
operations and concentrate on selling bingo equipment. Cost of sales for the
three months ended June 30, 1999 was $24,166 compared to $39,254 for the same
period in 1998, for a decrease of 38%.
General and administrative expenses were $150,686 for the three months
ended June 30, 1999 compared to $61,954 for the same period in 1998, for an
increase of 143%. Depreciation and amortization expense was $2,564 for the three
months ended June 30, 1999 compared to $6,348 for the same period in 1998, for a
decrease of 60%. Interest expense for the three months ended June 30, 1999 was
$4,442 compared to $8,591 for the same period in 1998, for a decrease of 48%.
2
<PAGE>
For the three months ended June 30, 1999 the Company had a net loss of
$17,325, and its subsidiary had income of $48,477, for consolidated income of
$31,152. For the three months ended June 30, 1998 the consolidated net income
was $23,177 ($57,117 from the Company and $33,940 loss from the subsidiary).
At June 30, 1999 the Company's assets were $0, and the subsidiary's assets
were $259,674, for total consolidated assets of $259,674. Liabilities at June
30, 1999 were $499,216 for the Company and $372,777 for the subsidiary, for
total consolidated liabilities of $871,993.
Net income was $9,748 for the six months ended June 30, 1999 compared with
a loss of $115,949 for the same period in 1998. Included in the net income for
the three and six months ended June 30, 1999 is income of $163,206 realized from
the sale of one facility and abandonment of two facilities.
Net revenue was $209,654 for the six months ended June 30, 1999 compared
with $335,997 for the same period in 1998, a decrease of 38%. Cost of sales for
the six months ended June 30, 1999 were $37,792 compared with $84,112 for the
same period in 1998, a decrease of 55%.
General and administrative expenses were $311,569 for the six months ended
June 30, 1999 compared with $339,368 for the same period in 1998, a decrease of
8%. Depreciation and amortization expense was $7,752 for the six months ended
June 30, 1999 compared with $12,695 for the same period in 1998, a decrease of
39%. Interest expense for the six months ended June 30, 1999 was $5,999 compared
with $15,771 for the same period in 1998, a decrease of 62%.
For the six months ended June 30, 1999 the Company had a net loss of
$17,325 and its subsidiary had income of $27,073, for consolidated net income of
$9,748. For the six months ended June 30, 1998 the consolidated net loss was
$115,949 ($66,360 from the Company and $49,589 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 June 30, 1999 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: February 21, 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>
June 30, December 31,
1999 1998
------------------ -----------------
ASSETS (Unaudited) (Audited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 35,001 $ 15,721
Receivable from employees 5,000 5,000
Note receivable 43,346 0
Prepaid expenses 0 12,845
Inventory 141,207 155,139
------------------ -----------------
TOTAL CURRENT ASSETS 224,554 188,705
PROPERTY AND EQUIPMENT 17,783 68,037
OTHER ASSETS
Security deposits 2,066 11,952
Accounts receivable 15,271 15,271
------------------ -----------------
$ 259,674 $ 283,965
================== =================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 22,172 $ 81,266
Bridge loans 259,000 259,000
Current portion of long-term debt 14,304 13,509
Demand loans payable - related parties 298,910 309,858
Accrued expenses 73,630 75,311
Accrued expenses - related parties 140,750 119,750
------------------ -----------------
TOTAL CURRENT LIABILITIES 808,766 858,694
LONG-TERM DEBT 63,227 70,163
------------------ -----------------
TOTAL LIABILITIES 871,993 928,857
STOCKHOLDERS' (DEFICIT)
Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 16,337,200 shares (16,129,700
in 1998) 16,337 16,130
Additional paid-in capital 1,629,391 1,606,773
Deficit accumulated during the development stage (2,258,047) (2,267,795)
------------------ -----------------
TOTAL STOCKHOLDERS' DEFICIT (612,319) (644,892)
------------------ -----------------
$ 259,674 $ 283,965
================== =================
</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)
1999 1998 1999 1998 to 6/30/99
------------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 49,804 $ 139,324 $ 209,654 $ 335,997 $ 3,399,012
Cost of sales 24,166 39,254 37,792 84,112 930,512
------------- ------------- ------------- ------------- -----------------
GROSS PROFIT 25,638 100,070 171,862 251,885 2,468,500
General and Administrative expenses 150,686 61,954 311,569 339,368 4,302,603
Depreciation and amortization 2,564 6,348 7,752 12,695 128,156
Interest expense 4,442 8,591 5,999 15,771 111,737
------------- ------------- ------------- ------------- -----------------
157,692 76,893 325,320 367,834 4,542,496
------------- ------------- ------------- ------------- -----------------
NET INCOME
(LOSS) BEFORE OTHER (132,054) 23,177 (153,458) (115,949) (2,073,996)
Joint venture loss 0 0 0 0 (152,515)
Loss on equipment disposal (19,216) 0 (19,216) 0 (59,354)
Gain on facility sale 182,422 0 182,422 0 182,422
Terminations of facility lease 0 0 0 0 (154,604)
------------- ------------- ------------- ------------- -----------------
163,206 0 163,206 0 (184,051)
NET INCOME (LOSS)
BEFORE INCOME TAXES 31,152 23,177 9,748 (115,949) (2,258,047)
INCOME TAX 0 0 0 0 0
------------- ------------- ------------- ------------- -----------------
NET INCOME (LOSS) $ 31,152 $ 23,177 $ 9,748 $ (115,949) $ (2,258,047)
============= ============= ============= ============= =================
Net income (loss) per weighted
average share $ .00 $ .00 $ .00 $ (.01)
============= ============= ============= =============
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 16,260,949 15,225,768 16,195,326 14,751,116
============= ============= ============= =============
</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)
1999 1998 to 6/30/99
----------------- ----------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ 9,748 $ (115,949) $ (2,258,047)
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 42,502 0 82,640
Joint venture loss non-cash 0 0 152,515
Stock issued for expenses 17,325 56,000 1,206,865
Depreciation & amortization 7,752 12,695 141,392
Changes in assets and liabilities:
Accounts receivable 0 0 (20,271)
Inventory 13,932 (1,199) (141,207)
Prepaid expenses 12,845 (7,847) 0
Accounts payable (59,094) (18,462) 22,172
Accrued expenses 19,319 11,455 209,381
----------------- ----------------- ----------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 64,329 (63,307) (449,956)
INVESTING ACTIVITIES
Purchase of property and equipment 0 0 (275,467)
Note receivable (43,346) 0 (43,346)
Security deposits 9,886 0 (2,066)
Investment in joint venture 0 0 (152,515)
----------------- ----------------- ----------------
NET CASH USED BY
INVESTING ACTIVITIES (33,460) 0 (473,394)
FINANCING ACTIVITIES
Proceeds from sale of common stock 5,500 96,200 329,763
Loan proceeds 48,000 30,460 727,185
Loan repayments (65,089) (2,251) (98,597)
----------------- ----------------- ----------------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (11,589) 124,409 958,351
----------------- ----------------- ----------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 19,280 61,102 35,001
Cash and cash equivalents at beginning of year 15,721 8,985 0
----------------- ----------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 35,001 $ 70,087 $ 35,001
================= ================= ================
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 5,999 $ 431 $ 42,005
================= ================= ================
</TABLE>
F-3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Noram
Gaming and Entertainment, Inc. and Subsidiary June 30, 1999 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1.00
<CASH> 35,001
<SECURITIES> 0
<RECEIVABLES> 48,346
<ALLOWANCES> 0
<INVENTORY> 141,207
<CURRENT-ASSETS> 224,554
<PP&E> 87,180
<DEPRECIATION> 69,397
<TOTAL-ASSETS> 259,674
<CURRENT-LIABILITIES> 808,766
<BONDS> 0
0
0
<COMMON> 16,337
<OTHER-SE> (628,656)
<TOTAL-LIABILITY-AND-EQUITY> 259,674
<SALES> 209,654
<TOTAL-REVENUES> 209,654
<CGS> 37,792
<TOTAL-COSTS> 37,792
<OTHER-EXPENSES> 325,320
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,999
<INCOME-PRETAX> 9,748
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,748
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,748
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
