________________________________________________________________________________
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A/A
(Mark One)
AMENDED ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _____________
Commission file number: 0-25624
LOTTOWORLD, INC.
(Exact name of registrant as specified in its charter)
_____________________________
Florida 65-0399794
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2150 Goodlette Road
Suite 200
Naples, Florida 34102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(941) 643-1677
_____________________________
Securities registered pursuant to Section 12(b) of the Act: None
_____________________________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
Name of each exchange on which registered: The NASDAQ Stock Market
Check 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 past 12
months (or for such 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
--- ---
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB/A or any amendment to this Form
10-KSB/A. ___
Issuer's revenue for the most recent fiscal year are $797,466. The number of
common shares outstanding on March 25, 1996, was 3,573,522. The aggregate market
value of the voting stock held by non-affiliates, based on the closing NASDAQ
sale price on March 25, 1996 was $10,770,527.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the at LottoWorld, Inc. 1996 Notice of Annual Meeting of
Stockholders and Proxy Statement, to be filed with the Securities and exchange
Commission within 120 days after the close of the Registrant's fiscal year are
incorporated by reference in Part III
Transitional Small Business Disclosure Format : Yes No X
--- ---
LottoWorld, Inc.
Index to Amended Annual Report on Form 10-KSB/A/A
Filed with the Securities and Exchange Commission
Year ended December 31, 1995
Items in Form 10-KSB/A/A
Page
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Part II
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................... 3
Signatures................................................................ 6
.
2
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Part II
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources:
On December 29, 1994, the Company issued 166,670 shares of its Series A
Convertible Preferred Stock at a purchase price of $6.00 per share for a total
consideration of $1,000,020. This stock pays an annual cumulative dividend of
$.60 per share, payable quarterly as permitted by law, and is convertible into
common stock at a maximum price of $6.00 per share, but is subject to
adjustment. Whenever the Company shall issue any shares of its Common Stock for
a consideration per share which is less than the conversion price in effect
immediately prior to such issuance, the conversion price shall be reduced to a
price equal to the consideration per share received by the Company for the new
shares. The current conversion price, based upon the June 28, 1996 issuance is
$1.625 per share The preferred stock is subject to mandatory redemption at $6.00
per share for any shares of convertible preferred stock which remains
outstanding on December 15, 1998. Pursuant to terms and conditions under which
the Company issued the preferred stock, during the period that any preferred
shares remain outstanding, the Company shall keep on deposit at Resource Bank
(previously the deposit was held at the First Bank National Association)
Minneapolis, Minnesota, the sum of $6.00 for each share of outstanding preferred
stock. There is $1,000,020 on deposit, as no shares have been converted.
The following table represents the capital resources of the Company:
December 31
-----------
1995 1994
------------ ----------
Current Assets $ 1,155,209 $ 133,031
Current Liabilities 1,099,191 238,935
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Working Capital (Deficiency) $ 56,018 $ (105,904)
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December 31
-----------
1995 1994
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Common Shareholders' Equity
Common stock $ 3,106 1,885
Common stock subscribed 1,316,230 -
Additional paid-in capital 7,933,759 2,095,394
Accumulated deficit (7,789,523) (2,094,330)
Less unpaid stock subscriptions (866,250) -
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$ 597,322 $ 1,241,904
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The Company used more cash in operating activities during 1995 than during
1994 due to a larger loss and increased current assets partially off-set by
increased current liabilities. The Company received cash during 1995 from the
sale of common stock, mainly through an Initial Public Offering of the Company's
common stock on March 10, 1995 and the proceeds from secured subordinated
promissory notes from two of the Company's officers. On November 10, 1995, these
officers, Dennis B. Schroeder and A. Richard Holman, the Chief Executive Officer
and President respectively, exchanged an aggregate amount of $1,000,020 of the
Company's secured subordinated promissory notes for an aggregate of 333,340
shares of the Company's $.001 common stock. The Company additionally purchased
wire magazine racks, equipment and furniture totaling $411,000 which appears to
meet the Company's need for 1996 without any further major capital expenditures.
In two private transactions, on March 12, 1996, the Company sold 180,000
shares and on June 28, 1996, the Company sold 1,188,164 shares of its $.001 par
value common stock. The net proceeds to the Company from these transactions were
$2,325,882.
On March 12, 1996, the Company sold 180,000 shares of its Common Stock to
a private investor outside of the United States at the price of $3.75 per share.
The net proceeds to the Company was $607,500. This sale was subject to a price
adjustment based upon the market performance of the Company's stock and based
upon that price adjustment, another 120,000 shares were subsequently issued.
On June 28, 1996, the Company sold 1,188,164 shares at a price of $1.625
per share and the net proceeds to the Company from this transaction was
$1,718,382. This transaction was not subject to a price adjustment. These
securities were sold pursuant to an exemption from registration under Regulation
D promulgated by the Securities and Exchange Commission.
4
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The following table sets forth at December 31, 1995; (i) the total
assets and the capitalization of the Company; and (ii) the pro-forma
capitalization to give effect to the transactions:
at December 31, 1995
--------------------
Actual Pro-forma
----------- -----------
Total assets $ 2,721,583 $ 5,047,465
Long-Term Debt, less current maturities $ 25,050 $ 25,050
Redeemable convertible preferred stock $ 1,000,020 $ 1,000,020
Common Shareholders' Equity
Common stock $ 3,106 $ 4,474
Common stock subscribed 1,316,230 1,316,230
Additional paid in capital 7,933,759 10,258,273
Accumulated deficit (7,789,523) (7,789,523)
Less stock subscriptions (866,250) (866,250)
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$ 597,322 $ 2,923,204
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The Company believes that its capital resources on hand at December 31,
1995, together with the above private transaction and the expected revenues from
sales, will be sufficient to satisfy its working capital requirements for the
next 12 months.
Government Regulation
Lotteries, and activities associated therewith such as promotion, are
subject to regulation under federal laws and by each state which conducts a
lottery. For example, all states have prohibitions on the sale of lottery
tickets for more than face value and the sale of lottery tickets from other
states' lotteries. LOTTOWORLD(R) provides information concerning the legal
lotteries of various states, as well as advice on strategies for participating
in such lotteries. For example: certain states have laws which prohibit the
promotion of gambling and while it may be construed that the magazine might be
promoting gambling, the Company does not believe that its magazine contravenes
such prohibitions, the application of such regulation is subject to the
interpretation by, and enforcement policy of, each state's lottery commission
and/or attorney general. The Company actively attempts to comply with all
applicable laws and has no knowledge of any regulatory action that has been
taken or threatened that would impact the activities of the Company.
Nevertheless, there can be no assurance that such regulatory action could not be
taken. Any regulatory action could have a material effect upon the Company's
business.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereto
duly authorized.
LottoWorld, Inc.
By: s/ A. Richard Holman
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A. Richard Holman
President
By: s/ Stuart Dubow
-------------------------
Stuart Dubow
Chief Financial Officer
Date: February 14, 1997
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant in the capacities and the
dates indicated.
S/ Dennis B. Schroeder Date: February 14, 1997
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Dennis B. Schroeder, Chief Executive Officer
and a director
s/ A. Richard Holman Date: February 14, 1997
- --------------------------------------------
A. Richard Holman, President and a director
s/ James D. Cullen Date: February 14, 1997
- --------------------------------------------
James D. Cullen, a director
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