-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VTQM6H8s0bWJYEeyzIfkikXAjSuLZA34CFRgoCD8cmdZw6sErJBNjgpcWngXe4o9 rSYhIgkW/8XdCYTo0zcNgA== 0001019056-02-000600.txt : 20020814 0001019056-02-000600.hdr.sgml : 20020814 20020814122239 ACCESSION NUMBER: 0001019056-02-000600 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ONLINE GAMING SYSTEMS LTD \ CENTRAL INDEX KEY: 0001003739 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 133858917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-27256 FILM NUMBER: 02733123 BUSINESS ADDRESS: STREET 1: 200 E PALMETTO PARK RD, STE 200 CITY: BOCA RATON STATE: FL ZIP: 33432 BUSINESS PHONE: 5613936685 MAIL ADDRESS: STREET 1: 3225 MCLEDO DRIVE STREET 2: 1ST FLOOR CITY: LAS VEGAS STATE: NV ZIP: 89121 FORMER COMPANY: FORMER CONFORMED NAME: CEEE GROUP CORP DATE OF NAME CHANGE: 19951120 FORMER COMPANY: FORMER CONFORMED NAME: ATLANTIC INTERNATIONAL ENTERTAINMENT LTD DATE OF NAME CHANGE: 19961203 FORMER COMPANY: FORMER CONFORMED NAME: ONLINE GAMING SYSTEMS INC DATE OF NAME CHANGE: 19991115 10QSB 1 online_2q.txt FORM 10QSB 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 EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 2002 OR [ ] 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: 0-27256 ONLINE GAMING SYSTEMS, LTD. (Exact name of small business issuer as specified in its charter) DELAWARE 65-0512785 (State or other jurisdiction of (I.R.S. Employer Identification number) incorporation or organization) 3225 McLeod Drive 1st Floor, Las Vegas, Nevada 89121 (Address of principal executive offices) Registrant's telephone no., including area code: (702) 836 -3042 Check whether the issuer (1) 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 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 [ ] 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 practicable date. Class Outstanding as of August 14, 2002 - --------------------------------- --------------------------------- Common Stock, $.001 par value 95,635,953 TABLE OF CONTENTS Heading Part I. FINANCIAL INFORMATION Page - ------- ----------------------------- ---- Item 1 Financial Statements............................................ 2 Consolidated Balance Sheet-June 30, 2002 (Unaudited)............ 3 Consolidated Statement of Operations-Six Months Ended June 30, 2002 (Unaudited)....................................... 4 Consolidated Statement of Operations-Three Months Ended June 30, 2002(Unaudited)........................................ 5 Consolidated Statement of Cash Flows-Six Months Ended June 30, 2002 (Unaudited)....................................... 6 Notes to Consolidated Financial Statements (Unaudited)..................................................... 7-10 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operation.............................. 11-12 Part II. OTHER INFORMATION -------------------------- Item 1 Legal Proceedings............................................... 13 Item 2 Change in Securities............................................ 13 Item 3 Defaults Upon Senior Securities................................. 13 Item 4 Submission of Matters to a Vote of Securities Holders........... 13 Item 5 Other Information............................................... 13 Item 6 Exhibits and Reports on Form 8-K................................ 13 Signatures...................................................... 14 PART 1 Item 1. Financial Statements The following unaudited financial Statements for the six-month periods ended June 30, 2002 and 2001 have been prepared by Online Gaming Systems, Ltd. (the "Company") and Subsidiary. ONLINE GAMING SYSTEMS, LTD. AND SUBSIDIARY Financial Statements June 30, 2002 Page 2 of 14 ONLINE GAMING SYSTEMS, LTD. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET (UNAUDITED)
June 30, December 31, 2002 2001 ------------ ------------ Assets: Current Assets: Cash $ 40,376 $ 123,097 Note Receivable 125,000 -- Other Current Assets 17,244 22,918 ------------ ------------ Total Current Assets 182,620 146,015 Property and Equipment-Net 102,951 214,393 Other Assets Intangible Assets-Net 331,179 319,333 ------------ ------------ Total Assets $ 616,750 $ 679,741 ------------ ------------ Liabilities and Stockholders' Equity: Current Liabilities: Accounts Payable and Accrued Expenses $ 260,301 $ 379,125 Notes Payable-Officers -- 34,680 Accrued Interest-Related Party 1,038,192 804,098 Note Payable 45,000 22,500 Capital Lease Obligations 11,478 34,874 ------------ ------------ Total Current Liabilities 1,354,971 1,275,277 Convertible Notes Payable-Related Party 4,384,907 3,734,907 ------------ ------------ Total Liabilities 5,739,878 5,010,184 Commitments and Contingencies -- -- Stockholders' (Deficit): Convertible Preferred Stock-Par Value $.001 Per Share; Authorized 10,000,000 Shares, None Issued and Outstanding -- -- Common Stock-Par value $.001 Per Share; Authorized 100,000,000 Shares, Issued and outstanding- 95,635,953 Shares at June 30, 2002 95,635 94,546 Additional Paid-in Capital 18,904,164 18,615,665 Treasury Stock, 811,767 Common Shares-At Cost (1,730,485) (1,730,485) Accumulated (Deficit) (22,392,442) (21,310,169) ------------ ------------ Total Stockholders' (Deficit) (5,123,128) (4,330,443) ------------ ------------ Total Liabilities and Stockholders' (Deficit) $ 616,750 $ 679,741 ------------ ------------
The Accompanying Notes are an Integral Part of these Consolidated Financial Statements Page 3 of 14 ONLINE GAMING SYSTEMS, LTD. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED) Six Months Ended June 30, 2002 2001 ------------ ------------ Revenue - Related Party $ 250,000 $ -- - Other 290,233 497,138 ------------ ------------ Total Revenue $ 540,233 $ 497,138 Cost of Sales -- 17,141 ------------ ------------ Gross Profit 540,233 479,997 ------------ ------------ Operating Expenses: General and Administrative 1,192,958 1,882,724 Depreciation and Amortization 174,095 125,735 ------------ ------------ Total Operating Expenses 1,367,053 2,008,459 ------------ ------------ [Loss] from Operations (826,820) (1,528,462) ------------ ------------ Other [Expenses] Income: Interest Expense-Related Party (254,608) (269,500) Interest Expense (2,643) (17,482) Settlement of debt -- (200,000) Other Income [Expense] 1,796 (358) ------------ ------------ Other [Expenses] Income - Net (255,455) (487,340) ------------ ------------ [Loss] from Operations Before Income Tax [Benefit] Expense (1,082,275) (2,015,802) Income Tax [Benefit] Expense -- -- ------------ ------------ Net [Loss] (1,082,275) (2,015,802) Preferred Stock Dividend in Arrears -- 22,500 ------------ ------------ Net Income [Loss] Available to Common Stockholders $ (1,082,275) $ (2,038,302) ------------ ------------ Basic and Diluted Net [Loss] Per Share of Common Stock $ (.01) $ (.12) Weighted Average Shares of Common Stock Outstanding-Basic and Diluted 95,231,370 16,811,076 The Accompanying Notes are an Integral Part of these Consolidated Financial Statements. Page 4 of 14 ONLINE GAMING SYSTEMS, LTD. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 30,2002 (UNAUDITED) Three Months Ended June 30, 2002 2001 ------------ ------------ Revenue -Related Party $ 250,000 $ -- -Other 225,259 272,033 ------------ ------------ Total Revenue $ 475,259 $ 272,033 Cost of Sales -- 8,084 ------------ ------------ Gross Profit 475,259 263,949 ------------ ------------ Operating Expenses: General and Administrative 389,601 1,140,288 Depreciation and Amortization 87,686 65,753 ------------ ------------ Total Operating Expenses 477,287 1,206,041 ------------ ------------ [Loss] from Operations (2,028) (942,092) ------------ ------------ Other [Expenses] Income: Interest Expense-Related Party (131,547) (143,500) Interest Expense (2,039) (12,687) Settlement of debt (200,000) Other Income [Expense] -- (78,500) ------------ ------------ Other [Expenses] Income - Net (133,586) (434,687) ------------ ------------ [Loss] from Operations Before Income Tax [Benefit] Expense (135,614) (1,376,779) Income Tax [Benefit] Expense -- -- ------------ ------------ Net [Loss] (135,614) (1,376,779) Preferred Stock Dividend in Arrears -- 11,250 ------------ ------------ Net [Loss] Available to Common Stockholders $ (135,614) $ (1,388,029) ------------ ------------ Basic and Diluted Net [Loss] Per Share of Common Stock $ (0.00) $ (.07) Weighted Average Shares of Common Stock Outstanding-Basic and Diluted 95,635,953 18,666,227 The Accompanying Notes are an Integral Part of these Consolidated Financial Statements. Page 5 of 14 ONLINE GAMING SYSTEMS, LTD. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, 2002 2001 ----------- ----------- Operating Activities: [Loss] from Operations $(1,082,275) $(2,015,802) Adjustments to Reconcile Net [Loss] Income to Net Cash [Used for] Operating Activities: Depreciation and Amortization 174,095 125,735 Issuance of Common Stock for cancellation of indebtedness 200,000 Changes in Assets and Liabilities: [Increase] Decrease in: Note Receivable (125,000) Other Assets 5,674 (11,846) Increase [Decrease] in: Accounts Payable and Accrued Expenses (118,823) (745,127) Accrued Interest - Related Party 234,094 269,500 ----------- ----------- Net Cash - Operating Activities: (912,235) (2,177,540) ----------- ----------- Investing Activities: Purchase of Patents and Licenses -- (125,000) Purchase of Property, Equipment, and Capitalized Software (74,500) -- ----------- ----------- Net Cash - Investing Activities (74,500) (125,000) ----------- ----------- Financing Activities: Proceeds from Issuance of Common Stock 4,910 -- Proceeds from Sale of Treasury Stock -- 14,062 Increase (Decrease) in Loan Payable to Officer -- 83,754 Proceeds from Note Payable 25,000 125,000 Proceeds from Convertible Note Payable - Related Party 1,150,000 2,293,642 Repayment of Convertible Note Payable - Related Party (250,000) -- Repayments of Note Payable (2,500) (182,500) Repayments of Capital Lease Payable (23,396) (58,467) ----------- ----------- Net Cash - Financing Activities 904,014 2,275,491 ----------- ----------- [Decrease] Increase in Cash and Cash Equivalents (82,721) (27,049) Cash and Cash Equivalents - Beginning of Period 123,097 32,929 ----------- ----------- Cash and Cash Equivalents - End of Period $ 40,376 $ 5,880 =========== =========== Supplemental Disclosures of Cash Flow Information: Cash paid during the years for: Interest $ 23,157 $ 17,482 Taxes -- --
Supplemental Disclosure of Non-cash Financing Activities: The Company sold the software license to a related party for $250,000, and offset convertible debt in the amount of $250,000 due the related party. The total amount of $250,000 was credited to additional paid in capital. The Company issued 561,766 shares of common stock of the Company at $.06 per share to a former CEO& President of the company in exchange for cancellation of an amount owed. During the six month period ended June 30, 2001 the Company issued 225,000 shares of common stock to a former consultant in exchange for cancellation of indebtedness. Accordingly non-cash expense of $200,000 was recognized. The Accompanying Notes are an Integral Part of these Consolidated Financial Statements. Page 6 of 14 ONLINE GAMIING SYSTEMS, LTD. AND SUBSIDIARY Notes to Consolidated Financial Statements June 30, 2002 (Unaudited) Note 1 - Basis of Preparation -------------------- The accompanying unaudited consolidated financial statements of Online Gaming Systems, Ltd and Subsidiary (the " Company") have been prepared in accordance with Regulation S-B promulgated by the Securities and Exchange Commission and do not include all of the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, these interim financial statements include all adjustments necessary in order to make the financial statements not misleading. The results of operations for such interim period are not necessary indicative of results of operations for a full year. The unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company and management's discussion and analysis of financial condition and results of operations included in the Annual Report on Form 10-KSB for the year ended December 31, 2001. Note 2 - Significant Accounting Policies ------------------------------- The accounting policies followed by the Company are set forth in Note 2 to the Company's financial statements in the December 31, 2001 Form 10-KSB. Note 3 - Per Share Data -------------- Per share basic data are based on the weighted average number of common shares outstanding during the respective periods. The diluted net income per share is based upon the common stock outstanding during the period and the effect of all dilutive potential common shares outstanding. The computation of diluted earnings per share does not assume conversion, exercise or contingent issuance of securities that would have an anti-dilutive effect on earnings per share. Note 4 - Major Customers --------------- Income fees derived from customers are concentrated amongst numerous customers, with the following contributing more than 10 percent of the Company's revenues during the six-month period ending June 30, 2002: Customer A-related party 46% Customer B 16% Page 7 of 14 Note 5 - Convertible Notes Payable - Related Party ----------------------------------------- At June 30, 2002, the Company had a $4,384,907 convertible note payable balance due Hosken Consolidated Investments ["HCI"]. As of June 30, 2002, subsidiaries of HCI owned approximately 86% of the outstanding shares of the Company's common stock. HCI is a South African investment holding company involved in various technology industries. Terms of the revised loan agreement provide for an extension of the maturity to repay all principal outstanding and related accrued interest by December 31, 2003. The notes payable are secured by substantially all assets of the Company. In November 2001, HCI converted $3,600,000 of convertible debt into 60,000,000 shares of the Company's common stock. As of June 30, 2002 the Company has accrued $1,038,192 in interest related to the convertible debt borrowing. During the six-month periods ended June 30, 2002 and 2001 the Company repaid HCI approximately $20,514 and $16,046 in accrued interest respectively. During the first quarter of 2002, HCI advanced the Company $750,000 in convertible notes and funds. During the second quarter of 2002, HCI advanced the Company $400,000 in convertible notes and funds. During the second quarter of 2002 the Company sold the software license of its ICE product for a fee of $250,000 to International Gaming & Entertainment Ltd. ("IGEC") and provided management services in connection with developing an Internet casino and securing requisite licensing for an additional fee of $250,000. Ahead Investments ("AI") is the majority shareholder of IGEC. AI is a wholly owned subsidiary of HCI and majority stockholder of the Company. Per the agreement IGEC exercised its right to pay for the license fee and management services by offsetting $500,000 of convertible debt due AI. The Company recorded the total amount of $250,000 of the sale of the software license as additional paid in capital. See Note 6 for additional business agreements. Note 6 - Capital Stock ------------- During the first quarter 2002, the Chief Financial Officer of the Company purchased 166,667 shares of the Company's common stock, at $.06 per share. Page 8 of 14 During the first quarter 2002, the former Chief Executive Officer of the Company was issued 561,766 shares of the Company's common stock, in settlement of a loan amount due to the former Chief Executive Officer of $34,683. In January 2002, the Company received a purchase money mortgage note from a consultant calling for the purchase of 30,000 shares per month for 12 months at a price of $.05 per share, the closing price on the date when the agreement was negotiated. On January 2, 2002, the Company issued the initial 30,000 shares of its common stock in exchange for $1,500. On February 7, 2002, the Company issued another 90,000 shares of its common stock in exchange for $4,500. In the second quarter of 2002, 241,251 shares of the Company's common stock were issued to a previous customer in satisfaction of an investment made in the Company. Note 7 - Business Agreements ------------------- Internet Casino Contract-Ahead Investments Limited -------------------------------------------------- In February 2002, the Company entered into a management agreement with Ahead Investments Limited ("AI"), a wholly owned subsidiary of HCI. At December 31, 2001, the agreement entails the creation of a yet unspecified separate entity that will own an Internet casino and be managed by the Company. Ownership of the Company is as follows. AI 88.60% Other 11.40% In addition, the agreement provides an option for certain OGS personnel to purchase an aggregate of an 18.5% ownership of the entity in exchange for a total of $110,000. AI will provide funding for the project, to be about $1,100,000. The agreement provides that AI will purchase from the Company a software license fee of $250,000 plus pay the Company $200,000 for costs related to obtaining an online casino licensing for the new entity. The purchase of the license fee and payment of the online casino licensing fee costs will be financed by the Company. Terms of the financing provisions provide for AI to incur interest at a rate of 10% per annum, with the $250,000 and $200,000 lump sums amounts maturing in December 2003. AI reserves the right to offset the notes payable due them by the Company with the interest and purchase price incurred in connection with the software license purchase and online casino licensing costs. Page 9 of 14 The Company will manage the casino for AI, for a minimum management fee of $600,000 per annum, plus incentive of up to $2,000,000 annually if certain operating thresholds are met. Additionally, OGS will receive $12,500 (increasing to $15,000) per month under a software support and maintenance agreement. In the event the marketing and operations agreement is terminated, AI may exercise a "put option" which requires the Company to purchase from AI and the remaining shareholders all of the shares on the separate company based upon a fair market value per share. The fair market value shall have a minimum value of $1,300,000. The agreement also provides that the Company may exercise a "call option" to require that AI and all remaining shareholders to sell to the Company their respective shares outstanding for a fair value with a minimum value of $1,500,000. The Company may not exercise the call option if AI elects to utilize its put option. Note 7 - New Authoritative Accounting Pronouncements ------------------------------------------- On August 15, 2001, the FASB issued SFAS No.143, "Accounting for Asset Retirement Obligations ["SFAS No.143"]. SFAS No.143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS No.143 will be effective for financial statements issued for fiscal years beginning after June 15, 2002. An entity shall recognize the cumulative effect of adoption of SFAS No.143 as a change in accounting principle. The Company is not currently affected by this Statement's requirements. On April 30, 2002, the Financial Accounting Standards Board (FASB) issued Statement No.145, Rescission of FASB Statements No.4, 44 and 64,Amendment of FASB Statement No. 13 and Technical Corrections. The Statement updates, clarifies and simplifies existing accounting pronouncements. Statement 145 rescinds Statement 4, which required all gains and losses from extinguishments of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As result, the criteria in Opinion 30 will now be used to classify those gains and losses. Statement 64 and amended Statement 4, is no longer necessary because Statement 4 has been rescinded. Statement 44 was issued to establish accounting requirements for the effects of transition to the provisions of the Motor Carrier Act of 1980. Because the transition has been completed, Statement 44 is no longer necessary. Statement 145 amends Statement 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. This amendment is consistent with the FASB's goal of requiring similar accounting treatment for transactions that have similar economic effects. This Statement also makes technical corrections to Page 10 of 14 exiting pronouncements. While those corrections are not substantive in nature, in some instances, they may change accounting practice. The Company is not currently affected by this Statement's requirements. Item 2. Management's Discussion and Analysis of Financial Condition and ------------------------------------------------------------------ Results of Operations --------------------- Six Months Ended June 30, 2002 and 2001 --------------------------------------- Net Revenues. The Company's revenues increased approximately 8.5% in 2002 over the same period in 2001. Revenues from operations for the six-month ended June 30, 2002 were $540,233 as compared with $497,138 for the same period in 2001. The increase in revenue was primarily due to an increase in sales of our software products and consulting services performed to a related party of $250,000. This was partially offset by decreases in fee-paying customers emanating from a general industry slowdown apparent since the third quarter of 2001. We allocated our limited resources to increased product development, as opposed to marketing and sales, to better position the company to benefit from changes occurring in the industry. Operating Expenses. Operating expenses decreased by 32% or $641,406 for the six-month period ended June 30, 2002 over the same period in 2001. The decrease was largely due to downsizing of employees, resulting in reduced payroll costs and reducing certain operating expenses. We focused our business on Internet gaming software, and significantly reduced our involvement in the hardware portion of our business. Accordingly, we experienced relatively significant severance and related charges during the past six months. Three Months Ended June 30, 2002 and 2001 ----------------------------------------- Net Revenues. The Company's revenues increased approximately 74.6% in 2002 over the same period in 2001. Revenues from operations for the three-month ended June 30, 2002 were $475,259 as compared with $272,033 for the same period in 2001. The increase in revenue was primarily due to consulting fees of $250,000 performed to a related party, and licensing of software product. This was partially offset by decreases in fee-paying customers emanating from a general industry slowdown apparent since the third quarter of 2001. Operating Expenses. Operating expenses decreased by 60% or $728,754 for the three-month period ended June 30, 2002 over the same period in 2001. The decrease was largely due to downsizing of employees, resulting in reduced payroll costs and reducing certain operating expenses. Page 11 of 14 Liquidity and Capital Resources ------------------------------- Cash and cash equivalents totaled $40,376 at June 30, 2002. Net cash used from operations was $912,235 primarily due to a Net Loss for the six months ended June 30, 2002 of $1,082,274, a reduction in Accounts Payable and accrued expenses of $143,823 and an increase in a Note Receivable of $125,000. This was offset by an increase in accrued interest to a related party of $234,09 and non-cash depreciation and amortization of $174,905. Net cash used in investing activities for the six months ended June 30, 2002, was $74,500 for payments made for the further development of the Company's software. Net cash provided from financing activities for the six months ended June 30, 2002, was $904,014. HCI, the Company's largest stockholder advanced $1,150,000 of which $250,000 was offset for payment for a software license. Our ability to meet our future obligations in relation to the orderly payment of our recurring obligations on a current basis is totally dependent on our ability to attain a profitable level of operations, and receive required working capital advances from our shareholders. Failure to obtain sufficient funding from HCI could adversely affect the operating ability of the Company. Forward -Looking Statements --------------------------- The matters discussed in Management's Discussion and Analysis and throughout this report that are forward-looking statements are based on current management expectations that involve risk and uncertainties. Potential risks and uncertainties include, without limitation; the impact of economic conditions generally and in the industry for Internet gaming products and services; dependence on key customers; continued competitive and pricing pressures in the industry; open-sourcing of products; rapid product improvement and technological change; capital and financing availability; and other risks set forth herein. Page 12 of 14 ONLINE GAMING SYSTEMS, LTD. AND SUBSIDIARY JUNE 30, 2002 PART II Item 1. Legal Proceedings During the second quarter of 2002, RCS Financial Services, Ltd filed suit against the Company for repayment of a loan, alleging a remaining balance of $47,500. The Company is currently investigating the matter, and has retained counsel to defend the claim. There were no other new legal proceedings filed or threatened involving the Company during the six-month period ended June 30, 2002. 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 (a) None (b) Reports on Form 8-K Form 8-K: Changes to executive management, - March 29, 2002 Page 13 of 14 In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Online Gaming Systems, Ltd. Date: August 14, 2002 By: /s/ J.A. Copelyn ---------------------------------- (Signature) J.A. Copelyn Chairman of the Board / Chief Executive Officer By: /s/ Lawrence P. Tombari ---------------------------------- (Signature) Lawrence P. Tombari President/Chief Financial Officer Page 14 of 14 EX-99.1 3 ex99_1.txt EXHIBIT 99.1 CERTIFICATION OF CHIEF EXECUTIVE AND FINANCIAL OFFICERS The undersigned chief executive officer and chief financial officer of the Registrant do hereby certify that this Quarterly Report on Form 10-QSB fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934, as amended, and that the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the Registrant at the dates and for the periods shown in such report. Online Gaming Systems, Ltd. Date: August 14, 2002 By: /s/ J.A. Copelyn ---------------------------------- (Signature) J.A. Copelyn Chairman of the Board / Chief Executive Officer By: /s/ Lawrence P. Tombari ---------------------------------- (Signature) Lawrence P. Tombari President/Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----