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, 1999
-------------------
[] 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 [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 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 nine months ended September 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 September 30, 1999, the Company had $16,752 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 loss was $72,926 for the three months ended September 30, 1999 compared
with $23,505 for the same period in 1998.
Net revenue was $23,704 for the three months ended September 30, 1999
compared with $221,600 for the same period in 1998, for a decrease of 89%. 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 September 30, 1999 was $29,123 compared to $46,021
for the same period in 1998, for a decrease of 37%.
General and administrative expenses were $62,560 for the three months ended
September 30, 1999 compared to $192,096 for the same period in 1998, for a
decrease of 67%. Depreciation and amortization expense was $1,731 for the three
months ended September 30, 1999 compared to $6,347 for the same period in 1998,
for a decrease of 73%. Interest expense for the three months ended September 30,
1999 was $3,216 compared to $641 for the same period in 1998, for an increase of
402%.
2
<PAGE>
For the three months ended September 30, 1999 the Company had a net loss of
$0, and its subsidiary had net a loss of $72,926, for a consolidated net loss of
$72,926. For the three months ended September 30, 1998 the consolidated net loss
was $23,505 ($20,850 from the Company and $2,655 from the subsidiary).
At September 30, 1999 the Company's assets were $0, and the subsidiary's
assets were $197,617, for total consolidated assets of $197,617. Liabilities at
September 30, 1999 were $499,216 for the Company and $375,246 for the
subsidiary, for total consolidated liabilities of $874,462.
Net loss was $63,178 for the nine months ended September 30, 1999 compared
with $139,454 for the same period in 1998. Included in the net loss for the
three and nine months ended September 30, 1999 is a loss of $0 and $17,325,
respectively, recognized when the Company issued stock for consulting services
related to expanding its product lines ($18,750 and $70,550 in 1998).
Net revenue was $233,358 for the nine months ended September 30, 1999
compared with $557,596 for the same period in 1998, a decrease of 58%. Cost of
sales for the nine months ended September 30, 1999 were $66,915 compared with
$130,133 for the same period in 1998, a decrease of 49%.
General and administrative expenses were $374,129 for the nine months ended
September 30, 1999 compared with $531,463 for the same period in 1998, a
decrease of 30%. Depreciation and amortization expense was $9,483 for the nine
months ended September 30, 1999 compared with $19,042 for the same period in
1998, a decrease of 50%. Interest expense for the nine months ended September
30, 1999 was $9,215 compared with $16,412 for the same period in 1998, a
decrease of 44%.
For the nine months ended September 30, 1999 the Company had a net loss of
$17,325 and its subsidiary had a net loss of $45,853, for a consolidated net
loss of $63,178. For the nine months ended September 30, 1998 the consolidated
net loss was $139,454 ($87,210 from the Company and $52,244 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, 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>
September 30, December 31,
1999 1998
------------------ -----------------
ASSETS (Unaudited) (Audited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 16,752 $ 15,721
Receivable from employees 5,000 5,000
Note receivable 33,070 0
Prepaid expenses 0 12,845
Inventory 125,893 155,139
------------------ -----------------
TOTAL CURRENT ASSETS 180,715 188,705
PROPERTY AND EQUIPMENT 16,052 68,037
OTHER ASSETS
Security deposits 850 11,952
Accounts receivable 0 15,271
------------------ -----------------
$ 197,617 $ 283,965
================== =================
LIABILITIES & (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 19,339 $ 81,266
Bridge loans 259,000 259,000
Current portion of long-term debt 13,875 13,509
Demand loans payable - related parties 297,045 309,858
Accrued expenses 73,563 75,311
Accrued expenses - related parties 152,000 119,750
------------------ -----------------
TOTAL CURRENT LIABILITIES 814,822 858,694
LONG-TERM DEBT 59,640 70,163
------------------ -----------------
TOTAL LIABILITIES 874,462 928,857
STOCKHOLDERS' (DEFICIT)
Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 16,379,200 shares (16,129,700
in 1998) 16,379 16,130
Additional paid-in capital 1,637,749 1,606,773
Deficit accumulated during the development stage (2,330,973) (2,267,795)
------------------ -----------------
TOTAL STOCKHOLDERS' DEFICIT (676,845) (644,892)
------------------ -----------------
$ 197,617 $ 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 Nine months ended (Date of
September 30, September 30, inception)
1999 1998 1999 1998 to 9/30/99
------------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 23,704 $ 221,600 $ 233,358 $ 557,596 $ 3,422,716
Cost of sales 29,123 46,021 66,915 130,133 959,635
------------- ------------- ------------- ------------- -----------------
GROSS PROFIT (5,419) 175,579 166,443 427,463 2,463,081
General and Administrative expenses 62,560 192,096 374,129 531,463 4,365,163
Depreciation and amortization 1,731 6,347 9,483 19,042 129,887
Interest expense 3,216 641 9,215 16,412 114,953
------------- ------------- ------------- ------------- -----------------
67,507 199,084 392,827 566,917 4,610,003
------------- ------------- ------------- ------------- -----------------
NET (LOSS) BEFORE OTHER (72,926) (23,505) (226,384) (139,454) (2,146,922)
Joint venture loss 0 0 0 0 (152,515)
Loss on equipment disposal 0 0 (19,216) 0 (59,354)
Gain on facility sale 0 0 182,422 0 182,422
Terminations of facility lease 0 0 0 0 (154,604)
------------- ------------- ------------- ------------- -----------------
0 0 163,206 0 (184,051)
------------- ------------- ------------- ------------- -----------------
NET (LOSS)
BEFORE INCOME TAXES (72,926) (23,505) (63,178) (139,454) (2,330,973)
INCOME TAX 0 0 0 0 0
------------- ------------- ------------- ------------- -----------------
NET (LOSS) $ (72,926) $ (23,505) $ (63,178) $ (139,454) $ (2,330,973)
============= ============= ============= ============= =================
Net (loss) per weighted
average share $ (.00) $ (.00) $ (.00) $ (.01)
============= ============= ============= =============
Weighted average number of common
shares used to compute net (loss)
per weighted average share 16,372,200 15,705,223 16,251,506 15,035,700
============= ============= ============= =============
</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)
1999 1998 to 9/30/99
----------------- ----------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net (loss) $ (63,178) $ (139,454) $ (2,330,973)
Adjustments to reconcile net (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 76,850 1,206,865
Depreciation & amortization 9,483 19,042 143,123
Changes in assets and liabilities:
Accounts receivable 15,271 (16,581) (5,000)
Inventory 29,246 (144,440) (125,893)
Prepaid expenses 12,845 (7,445) 0
Accounts payable (61,927) 32,238 19,339
Accrued expenses 30,502 21,030 220,564
----------------- ----------------- ----------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 32,069 (158,760) (482,216)
INVESTING ACTIVITIES
Purchase of property and equipment 0 0 (275,467)
Note receivable (33,070) 0 (33,070)
Security deposits 11,102 0 (850)
Investment in joint venture 0 0 (152,515)
----------------- ----------------- ----------------
NET CASH USED BY
INVESTING ACTIVITIES (21,968) 0 (461,902)
FINANCING ACTIVITIES
Proceeds from sale of common stock 13,900 96,200 338,163
Loan proceeds 48,000 76,789 727,185
Loan repayments (70,970) (3,430) (104,478)
----------------- ----------------- ----------------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (9,070) 169,559 960,870
----------------- ----------------- ----------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,031 10,799 16,752
Cash and cash equivalents at beginning of year 15,721 8,985 0
----------------- ----------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 16,752 $ 19,784 $ 16,752
================= ================= ================
SUPPLEMENTAL INFORMATION Cash paid for:
Interest $ 9,215 $ 16,412 $ 45,221
================= ================= ================
</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, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1.00
<CASH> 16,752
<SECURITIES> 0
<RECEIVABLES> 5,000
<ALLOWANCES> 0
<INVENTORY> 125,893
<CURRENT-ASSETS> 180,715
<PP&E> 87,180
<DEPRECIATION> 71,128
<TOTAL-ASSETS> 197,617
<CURRENT-LIABILITIES> 814,822
<BONDS> 0
0
0
<COMMON> 16,379
<OTHER-SE> (693,224)
<TOTAL-LIABILITY-AND-EQUITY> 197,617
<SALES> 233,358
<TOTAL-REVENUES> 233,358
<CGS> 66,915
<TOTAL-COSTS> 66,915
<OTHER-EXPENSES> 392,827
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,215
<INCOME-PRETAX> (63,178)
<INCOME-TAX> 0
<INCOME-CONTINUING> (63,178)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (63,178)
<EPS-BASIC> (.00)
<EPS-DILUTED> (.00)
</TABLE>
