UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter ended March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period to
---- ----
Commission file number - 0-50187
GAMING VENTURE CORP., U.S.A.
Exact name of Registrant as specified in its charter)
NEVADA 86-0883289
(State or other
jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
801 Pascack Road
Paramus, NJ 07652
(Address of principal executive offices) (Zip Code)
(201) 599-8484
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and
Exchange Act of 1934 during the preceding twelve months (or such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to file such filing requirements for the past
thirty days.
Yes x No
------ ------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report:
6,519,427 Shares of Common Stock
($.001 par value)
Transitional Small Business Disclosure Format (check one):
Yes No x
------- -------
2
Casino Journal Publishing Group, Inc.
PART I: Financial Information
ITEM 1 - Financial statements
ITEM 2 - Management's discussion and analysis of
financial condition and results of
operations
ITEM 3 - Controls and Procedures
PART II: Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
3
PART I
Item 1. Financial Statements:
GAMING VENTURE CORP., U.S.A.
CONDENSED BALANCE SHEET
MARCH 31, 2003
(UNAUDITED)
ASSETS
Current assets
Cash $ 446,503
Accounts receivable 10,715
Investment in marketable securities 91,121
----------
Total current assets 548,339
Property and equipment - at cost, less
accumulated depreciation 13,222
Due from affiliates 312,299
----------
$ 873,860
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Deferred revenues $ 69,402
----------
Shareholders' equity
Common stock, $.001 par value; 50,000,000 shares
authorized, 6,519,427 shares issued and outstanding 6,519
Additional paid-in capital 1,324,040
Accumulated unrealized loss on investments (199,463)
Accumulated deficit (326,638)
----------
804,458
----------
$ 873,860
==========
The accompanying notes are an integral part of these condensed
financial statements.
4
GAMING VENTURE CORP., U.S.A.
CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
2003 2002
---------- ----------
Revenues
Subscriptions $ 43,467 $ 42,847
Consulting 22,500 10,500
Other 2,534 2,238
---------- ----------
Total revenues 68,501 55,585
Cost of revenues 16,694 17,599
---------- ----------
Gross profit 51,807 37,986
General and administrative expenses 79,583 35,213
---------- ----------
(27,776) 2,773
---------- ----------
Other income (expense)
Realized gain (loss) on marketable securities (5,020) 48,319
Other - (240)
---------- ----------
(5,020) 48,079
---------- ----------
Net income (loss) $ (32,796) $ 50,852
========== ==========
Basic and diluted income (loss) per share $ - * $ 0.01
========== ==========
Shares used in calculation of loss per share 6,519,427 6,519,427
========== ==========
* - Amount is less than $.005
The accompanying notes are an integral part of these condensed
financial statements.
5
GAMING VENTURE CORP., U.S.A.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
2003 2002
---------- ----------
Net income (loss) $ (32,796) $ 50,852
---------- ----------
Reclassification adjustment 561 (33,880)
Unrealized gain on investments 6,159 113,412
---------- ----------
Other comprehensive income 6,720 79,532
---------- ----------
Comprehensive income (loss) $ (26,076) $ 130,384
========== ==========
The accompanying notes are an integral part of these condensed
financial statements.
6
GAMING VENTURE CORP., U.S.A.
CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)
2003 2002
---------- ----------
Cash flows from operating activities $ (7,492) $ 107,692
Cash flows from investing activities 22,250 (68,211)
---------- ----------
Net increase in cash 14,758 39,481
Cash, beginning of period 431,745 329,428
---------- ----------
Cash, end of period $ 446,503 $ 368,909
========== ==========
The accompanying notes are an integral part of these condensed
financial statements
7
GAMING VENTURE CORP., U.S.A.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Gaming Venture Corp., U.S.A. was incorporated on June 1, 1995 in the
State of Nevada. The operations and objectives of the Company are to
provide various types of gaming reports and newsletters regarding the
gaming and hospitality industries. The Company also provides
consulting and advisory services to the gaming and hospitality
industries.
On April 3, 1998, Casino Journal Publishing Group, Inc. ("CJPG") and
its combined affiliates merged with Gaming Venture Corp., U.S.A.
("Gaming" or the "Company"), a Nevada corporation. CJPG and its
combined affiliates became wholly owned subsidiaries of Gaming, the
legal acquirer. As the shareholders of CJPG and its combined
affiliates acquired 65% of Gaming's outstanding voting shares, the
merger was accounted for as a reverse acquisition of Gaming by CJPG,
the accounting acquirer in the transaction. Simultaneous with the
acquisition, Gaming changed its name to CJPG.
On January 3, 2003, the Board of Directors of CJPG approved the spin-
off of one of its subsidiaries, Gaming Venture Corp., U.S.A., as a
separate company. The terms of the spin-off arrangement were amended on
May 13, 2003. The shareholders of CJPG will receive 1 share of Gaming
for each share of CJPG owned as of the record date. Gaming reimbursed
CJPG for its payroll and related taxes. Gaming and CJPG share no
common expenses except salaries and payroll taxes. These expenses are
allocated based on time spent on each entity. Management believes this
allocation method is reasonable. The accompanying condensed balance
sheet as of March 31, 2003 and the condensed statements of operations,
comprehensive income (loss) and cash flows for the three months ended
March 31, 2003 and 2002 were retroactively adjusted to reflect the
spin-off as if it had occurred as of January 1, 2001. The Company
increased the number of outstanding Gaming shares from 1,664,000 to
6,519,427 and adjusted the par value of common stock and additional
paid-in capital by $4,855 as a result of the increased shares.
Comprehensive Income (Loss)
Comprehensive income (loss) is the total of (1) net income (loss) plus
(2) all other changes in net assets arising from nonowner sources,
which are referred to as other comprehensive income (loss). Other
comprehensive income (loss) consists of net unrealized (gains) losses
from marketable securities and reclassification adjustments for
reconciliation of previously unrealized losses. The Company has
presented a separate statement of comprehensive income (loss).
8
GAMING VENTURE CORP., U.S.A.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
2 - BASIS OF PRESENTATION
The condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and applicable rules and regulations of the Securities and
Exchange Commission. 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 (consisting primarily of normal recurring adjustments)
considered necessary for a fair presentation have been included. The
results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The
accompanying financial statements should be read in conjunction with
the Company's audited financial statements for the year ended December
31, 2002 included in its Form 10SB.
3 - PER SHARE DATA
Basic income (loss) per share is computed by dividing the net income
(loss) by the weighted average number of shares of common stock
outstanding during the periods. Diluted income per share is computed
by dividing the net income by the weighted average number of shares of
common stock, stock warrants and options outstanding during the period.
The Company had no stock options and warrants outstanding at March 31,
2003 and 2002.
4 - INVESTMENT IN AVAILABLE-FOR-SALE SECURITIES
Investments, consisting of equity securities, are classified as
available-for-sale securities and are carried at fair value.
Unrealized gains and losses are reported as a separate component of
shareholders' equity, net of applicable income taxes. Realized gains
and losses and declines in value deemed to be other than temporary on
available-for-sale securities are included in other income (expense).
5 - INCOME TAXES AND DEFERRED INCOME TAXES
At December 31, 2002, the Company had a net operating loss carryforward
of approximately $165,000 available to reduce its future Federal
taxable income, if any, through 2022.
9
GAMING VENTURE CORP., U.S.A.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
6 - RELATED PARTY TRANSACTIONS
The Company rents an office facility from its officer under a five-year
lease which began on January 1, 2001. Total related party rent expense
was $6,000 and $6,168 for the three months ended March 31, 2003 and
2002, respectively.
Approximate future minimum lease payments at March 31, 2003 are as
follows:
Period Ending
March 31,
-------------
2004 $ 24,000
2005 24,000
2006 18,000
---------
$ 66,000
=========
Amounts due from affiliates represent loans and advances to the
affiliated companies and are noninterest-bearing. At March 31, 2003,
due from affiliates also included approximately $40,000 of Federal
income tax paid on behalf of CJPG.
7 - REPORTABLE SEGMENTS
The Company applies Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related
Information" (SFAS No. 131). This statement establishes standards for
the reporting of information about operating segments in annual and
interim financial statements and requires restatement of prior year
information. Operating segments are defined as components of an
enterprise for which separate financial information is available that
is evaluated regularly by the chief operating decision maker(s) in
deciding how to allocate resources and in assessing performance. SFAS
No. 131 also requires disclosures about products and services,
geographic areas and major customers.
10
GAMING VENTURE CORP., U.S.A.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
7 - REPORTABLE SEGMENTS (Continued)
The Company has two reportable segments, newsletter and gaming
subscriptions and consulting services. All revenues generated in the
segments are external. For the periods ended March 31, 2003 and 2002,
the total reportable segment information is as follows:
Newsletter
and Gaming Consulting Corporate/ Total As
Subscriptions Services Other Reported
------------- ---------- ---------- ---------
<s> <c> <c> <c> <c>
For the period ended March 31, 2002:
Reportable segments
External revenues $ 42,847 $ 10,500 $ 2,238 $ 55,585
Depreciation and
amortization 2,457 602 - 3,059
Operating income (loss) 7,468 (4,695) - 2,773
Assets 12,875 6,800 887,919 907,594
For the period ended March 31, 2003:
Reportable segments
External revenues $ 43,467 $ 22,500 $ 2,534 $ 68,501
Depreciation and
amortization 2,035 1,054 - 3,089
Operating loss (22,580) (5,196) - (27,776)
Assets 12,397 6,547 854,916 873,860
Products and Services Revenues
The table below presents external revenues for groups of similar
products and services for the periods ended March 31, 2003 and 2002.
2003 2002
------ -------
Newsletter and gaming subscriptions $43,467 $42,847
Consulting 22,500 10,500
Other 2,534 2,238
------- --------
$68,501 $55,585
======= =======
Both segments of the Company are operating in, and derived their
revenues in, the United States.
11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
Trends and Uncertainties. Demand for Gaming Venture's future products
and services will be dependent on, among other things, market
acceptance of Gaming Venture's concept, our proposed operations and
general economic conditions that are cyclical in nature. Inasmuch as
a major portion of our activities are the revenues generating from the
sale of our newsletters, Gaming Venture's business operations may be
adversely affected by competitors and prolonged recessionary periods.
On April 3, 1998, Casino Journal Publishing Group, Inc. and its
combined affiliates merged with Gaming Venture Corp., U.S.A., a Nevada
corporation. Casino Journal and its combined affiliates became wholly
owned subsidiaries of Gaming Venture, the legal acquiror. As the
shareholders of Casino Journal and its combined affiliated acquired 65%
of Gaming's outstanding voting shares, the merger was accounted for as
a reverse acquisition of Gaming Venture by Casino Journal, the
accounting acquiror in the transaction. Simultaneous with the
acquisition, Gaming Venture Corp., U.S.A. changed its name to Casino
Journal Publishing Group while the Gaming Venture's West, Inc.
subsidiary changed its name to Gaming Venture Corp., U.S.A.
On January 3, 2003, the Board of Directors of Casino Journal approved
the spin-off of one of its subsidiaries, Gaming Venture Corp., U.S.A.,
as a separate company. The terms of this spin-off arrangement were
amended on May 13, 2003. Casino Journal will provide its shareholders
one share of Gaming Venture for each share of Casino Journal owned as
of the record date. No fractional shares will be issued.
Gaming Venture has incurred accumulated losses of $326,638 through
March 31, 2003. It also has annual operating costs of approximately
$300,000 to $400,000 and no significant sources of revenues to mitigate
these operating losses. Gaming Venture plans to increase revenues by
increased newsletter sales, new newsletters catered to different
hospitality industries such as restaurants and timeshare, and
additional regional newsletters for the lodging industry.
Historically, Gaming Venture launched a new publication every two
years, resulting in a 20% increase in revenue. The last new
publication launched was the Daily Lodging Report - Asia Pacific in
February 2000.
Gaming Venture also plans to expand the consulting business to the
lodging industry along with expansion of gaming clients. Management
is in discussions with other hotel consulting companies to partner up
with them on contracts. Gaming Venture would provide investor
communication services to the hotel companies and assist on financial
consulting and would split the retainer fee with the other consulting
firms. Management has held very preliminary discussions with certain
hotel consulting companies and public relations firms with hotel
company clients. The discussions have been general on possible
working together in the future on some mutual clients. There has been
no further progress on this as management has been focusing on existing
operations and completion of the spin-off.
12
Capital and Source of Liquidity.
For the three months ended March 31, 2003, Gaming Venture received
proceeds from the sale of marketable securities of $22,250.
For the three months ended March 31, 2002, Gaming Venture received
proceeds from the sale of marketable securities of $35,750, had an
increase in marketable securities of $98,736 and had an increase in due
from affiliates of $5,225 resulting in net cash used in investing
activities of $68,211.
For the three months ended March 31, 2003 and 2002, Gaming Venture did
not have any financing activities.
Results of Operations. Revenues for the three months ended March 31,
2003 compared to March 31, 2002 increased from $55,585 to $68,501
mainly due to an increase in consulting revenue from $10,500 in 2002 to
$22,500 in 2003. The cost of revenues primarily consisted of payroll,
payroll taxes, employees' benefit and telephone expense. Portions of
the payroll, payroll taxes, employee benefit and telephone expense were
allocated to cost of revenues based on the percentage of time spent by
the employee in connection with generating revenues for the three
months ended March 31, 2003 and 2002. The costs of revenue for the
three months ended March 31, 2003 and 2002 were substantially the same.
General and administrative expenses for 2003 were substantially more at
$79,583 compared to the same period in 2002 of $35,213. This was due
to an increase in legal and accounting to effectuate the spin-off in
connection with the preparation of the SEC filings and increased
consulting. The general and administrative expense for 2003 and 2002
consisted of mainly salaries and related expenses, rent, investor
relation expense and professional fees.
For the three months ended March 31, 2003, Gaming Venture realized a
gain (loss) on marketable securities of $(5,020) and $48,319,
respectively.
Controls and Procedures. The chief executive officer and the chief
financial officer of Gaming Venture have made an evaluation of the
disclosure controls and procedures relating to the financial statements
of Gaming Venture on Form 10SB for the years ended December 31, 2002
and 2001 as filed with the Securities and Exchange Commission and have
judged such controls and procedures to be effective as of December 31,
2002 and 2001 (the evaluation date).
There have not been any significant changes in the internal controls of
Gaming Venture or other factors that could significantly affect
internal controls relating to Gaming Venture since the evaluation date.
Critical Accounting Policies.
Revenue Recognition
Gaming Venture has two types of revenues, subscription revenue on
newsletters for gaming and lodging industries and consulting income on
gaming related business. Gaming Venture recognizes the revenue from
newsletter subscriptions when they are delivered to subscribers. Any
unfilled subscriptions are accounted for as deferred revenues.
13
Consulting revenue is recognized when services are rendered for either
cash or marketable securities. Any cash or marketable securities
received for services that have not yet performed are deferred.
Marketable securities received are valued at the quoted market price on
the applicable securities exchange on the date consulting contracts are
signed. Gaming Venture retains all rights and title of the securities
received.
Investment in Available for Sale Securities
Gaming Venture accounts for the marketable securities as available for
sale securities in accordance with SFAS 115, Accounting for Certain
Investments in Debt and Equity Securities. Gaming Venture acquires its
securities for cash or for consulting services rendered. Gaming
Venture does not intend to trade its securities with the objective of
generating profits based on short-term differences in price, but sells
the securities to generate cash for operations.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our
chief executive officer and chief financial officer, conducted an
evaluation of our "disclosure controls and procedures" (as defined in
Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-14(c)).
Based on their evaluation, our chief executive officer and chief
financial officer have concluded that as of the Evaluation Date, our
disclosure controls and procedures are effective to ensure that all
material information required to be filed in this quarterly report on
Form 10QSB has been made known to them in a timely fashion.
Changes in Internal Controls
There have been no significant changes (including corrective actions
with regard to significant deficiencies or material weaknesses) in our
internal controls or in other factors that could significantly affect
these controls subsequent to the Evaluation Date set forth above.
14
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Exhibit 99 - Certification pursuant to 18 U.S.C. Section 1350
(b) Reports on Form 8-K
None
15
SIGNATURE
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.
Date: July 8, 2003
/s/Alan Woinski
------------------------
Alan Woinski, President
16
CERTIFICATIONS
I, Alan Woinski, certify that:
1. I have reviewed this quarterly report on Form 10QSB of Gaming
Venture Corp., U.S.A.
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present, in all material respects, the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods
presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and I have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
17
(6) I have indicated in this quarterly report whether or not there
were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: July 8, 2003
/s/Alan Woinski
Alan Woinski
Chief Executive Officer
Chief Financial Officer