UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2000
[] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to _________
Commission file number 0-21991
ADVANCED GAMING TECHNOLOGY, INC.
(Exact name of small business issuer as specified in its charter)
Wyoming 98-0152226
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
P O BOX 46855 LAS VEGAS, NEVADA 89114 (Address of
principal executive offices)
(702) 227-6578
Issuer's telephone number
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: June 30, 2000 25,000,000
Transitional Small Business Disclosure Format (check one). Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed consolidated financial statements presented herein
have been prepared by the Company in accordance with the instructions to
Form10-QSB and do not include all of the information and note disclosures
required by generally accepted accounting principles. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Form 10-KSB for the year ended December 31, 1999. The accompanying financial
statements have not been examined by independent accountants in accordance with
generally accepted auditing standards, but in the opinion of management such
financial statements include all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the Company's financial
position and results of operations. The results of operations for the three and
six months ended June 30, 2000 may not be indicative of the results that may be
expected for the year ending December 31, 2000.
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Advanced Gaming Technology, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
ASSETS: 2000 1999
- --------- ----------- -----------
Current Assets
Cash and cash equivalents $ 326,489 $ 440,561
Prepaid expenses 1,000 1,000
Inventory 20,000 20,000
----------- -----------
Total current assets 347,489 461,561
Property and Equipment, net 109,740 141,740
Intangible and other assets 156,333 1,906,333
----------- -----------
Total assets $ 613,562 $ 2,509,634
=========== ===========
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Advanced Gaming Technology, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2000 1999
LIABILITIES AND STOCKHOLDER'S DEFICIT ----------- -----------
- ----------------------------------------
Current Liabilities
Accounts payable and accrued liabilities $ 204,915 $ 140,510
Current portion of long term debt 10,000 104,000
----------- -----------
Total current liabilities 214,915 244,510
Long term obligations, net of current portion 896,748 2,535,019
----------- -----------
Total liabilities 1,111,663 2,779,529
----------- -----------
Stockholders' Deficit:
- -----------------------
Preferred Stock-10% cumulative, $.10 par value;
authorized 4,000,000 shares; issued - nil -- --
Common Stock - $.005 par value; authorized
150,000,000 shares; issued and outstanding
25,000,000 on June 30, 2000 and December 31, 1999 125,000 125,000
Additional paid-in capital -- --
Accumulated deficit (623,101) (394,895)
----------- -----------
Total stockholders' deficit (498,101) (269,895)
----------- -----------
Total liabilities and stockholders deficit $ 613,562 $ 2,509,634
=========== ===========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
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Advanced Gaming Technology, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
Revenues $ -- $ 87,501 $ 15,163 $ 175,002
Cost of revenues -- -- -- --
---------- ---------- ---------- ----------
Gross margin -- 87,501 15,163 175,002
Expenses 102,245 150,653 201,181 252,542
---------- ---------- ---------- ----------
Loss from operations 102,245 63,152 186,017 77,540
Other income (expense), net (10,831) -- (42,188) (96,500)
---------- ---------- ---------- ----------
Net Loss $ 113,076 63,152 $ 228,206 $ 174,040
========== ========== ========== ==========
Net loss per common share $ -- $ -- $ (.01) $ (.01)
========== ========== ========== ==========
Weighted average common
shares outstanding 25,000,000 25,000,000 25,000,000 25,000,000
The accompanying notes are an integral part of the condensed consolidated
financial statements.
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Advanced Gaming Technology, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months
Ended June 30,
2000 1999
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (228,206) $ (174,040)
Adjustments to Reconcile Net Loss to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and amortization 32,000 141,517
Change in operating assets and liabilities:
Accounts receivable -- (158,910)
Accounts payable and accrued liabilities (29,595) 96,500
----------- -----------
Net cash used in operating activities (225,801) (94,933)
Cash Flows From Investing Activities:
Other assets 1,750,000 --
Purchase of property and equipment -- --
----------- -----------
Net Cash (Used in) provided by Investing Activities 1,750,000 --
Cash Flows From Financing Activities:
Repayment of debt and notes (1,638,271) --
----------- -----------
Net cash provided by financing activities (1,638,271) --
Net change in cash and cash equivalents (114,072) (94,933)
Cash and cash equivalents at beginning of period 440,561 109,824
----------- -----------
Cash and cash equivalents at end of period $ 326,489 $ 14,891
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest 31,368 $ --
Supplemental Disclosure of Non-Cash
The accompanying notes are an integral part of the condensed consolidated
financial statements.
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Advanced Gaming Technology, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
1. Interim Reporting
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles and
Form 10-QSB requirements. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating
results for the three and six month periods ended June 30, 2000, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSB for
the year ended December 31, 1999.
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Item 2. Management's Discussion and Analysis
General -
This discussion should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations in the Company's
annual report on Form 10-KSB for the year ended December 31, 1999. The Company's
shares of capital stock are registered under Section 12 of the Securities
Exchange Act of 1934. The Company became a reporting issuer in March 1997. This
quarterly report on Form 10-QSB and the information incorporated by reference
herein contain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements include, but are not limited
to, projected sales, gross margin and net income figures, the availability of
capital resources, plans concerning products and market acceptance.
Forward-looking statements are inherently subject to risks and uncertainties,
many of which cannot be predicted with accuracy and some of which may not even
be anticipated. Future events and actual results, financial and otherwise, could
differ materially from those set forth in or contemplated by the forward-looking
statements herein and any forward looking statements should be considered
accordingly.
Results of Operations -
2000 Compared to 1999
The net loss for the six months ended June 30, 2000 was $228,206 compared to a
loss of $174,040 for the same period in 1999. The prior year included $172,000
of revenue related to settlement of a dispute regarding product royalties.
The Company completed a Chapter 11 bankruptcy reorganization in the third
quarter of 1999. Since that time the company has focused efforts on executing
the new business plan. A priority is to build new relationships with potential
distributors of the electronic bingo products. This effort has proven to be a
challenge as the marketplace is very competitive and most distributors are
aligned with one or more of these competitors. Despite these difficulties the
Company has successfully placed Max Lite handheld units with certain
distributors. Revenue from client installations should be realized in the third
quarter of 2000. However, The magnitude of such product placements and related
revenue is expected to be limited. Management remains optimistic that the Max
Lite product can gain market share over the next 12 months.
In addition to repositioning the Max Lite product, in January of 2000 the
Company formed the Internet travel provider TravelSwitch.com. This venture
accepts room reservations for the Las Vegas market from the Internet address
www.777LasVegas.com. The venture also handles all forms of retail travel through
the dba's Imperial Travel, Play Vegas.com and Speedway Travel. The Company holds
a 22% interest in TravelSwitch.
This investment diversifies operations and gives the Company a presence in the
booming market surrounding Internet commerce. It also serves to allow management
to stay in touch with the growth opportunities in the red-hot Las Vegas gaming
market. Although the Company believes it is building equity in this venture, it
is not likely that TravelSwitch will provide cash flow for some time. Cash
excesses, if any, will likely be utilized toward building additional market
share.
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The Company is also considering introducing a new patented game to the bingo
market during the third quarter of 2000. This yet to be named game can be
installed along with any existing bingo game and introduces four exciting
progressive jackpots to customers. The game is currently under development. A
market study is underway to determine the potential for market penetration. No
funds have been expended on this concept to date.
Expenses for the first six months of 2000 were $201,181 compared to $252,542 in
the prior year. Some of this expense in 2000 includes management salary that has
been deferred voluntarily. Management is cautiously guarding expenses until cash
flow from product placements can be generated. Expenses for the second quarter
were $102,245 compared to $150,653 in 1999.
Other income (expense) consisted of an expense of $42,188 for the first six
months of 2000 compared to an expense of $96,500 in 1999.
Liquidity and Capital Resources -
The Company received operating capital in the amount of $1 million in
conjunction with the reorganization. Much of this new capital was utilized to
pay court approved administrative expenses and priority claims. The company is
optimistic that placement of the Max Lite units will produce cash flow during
the third quarter. However, there is no guarantee that such efforts will be
enough to fund future operations. Additional capital may be necessary. There is
no guarantee that such capital will be readily available.
The company's debt was restructured in conjunction with the chapter 11 process.
Debt in excess of $10 million at June 30, 1998 has been reduced to one note for
$900,000 at June 30, 2000. This note is convertible at the option of the holder
at a rate of $.53 per share. Debt service requirements are minimal through 2007.
Inflation and Regulation -
The Company's operations have not been, and in the near term are not expected to
be, materially affected by inflation or changing prices. The Company encounters
competition from a variety of firms offering similar products in its market
area. Many of these firms have long standing customer relationships and are well
staffed and well financed. The Company believes that competition in the industry
is based on competitive pricing, although the ability, reputation and technical
support of a concern is also significant. The Company does not believe that any
recently enacted or presently pending proposed legislation will have a material
adverse effect on its results of operations.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ADVANCED GAMING TECHNOLOGY, INC.
(Registrant)
DATE: August 8, 2000 By: /s/ DANIEL H. SCOTT
------------------------------
Daniel H. Scott
President, Chief Operating
Officer and Director
(Principal executive and
accounting oficer)
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