-----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, H1f7UtGp3fwCmODz38jQVf3q3L5IQHUpJu1i7gtwLTEKyONN0VdV5KBcN52rHWCn gUY2xFIa5xsv9kvylNOuiQ== 0000278165-97-000002.txt : 19970515 0000278165-97-000002.hdr.sgml : 19970515 ACCESSION NUMBER: 0000278165-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL GAMING & TECHNOLOGY INC CENTRAL INDEX KEY: 0000278165 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 020314487 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09047 FILM NUMBER: 97603970 BUSINESS ADDRESS: STREET 1: 2575 S HIGHLAND DR CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027940336 MAIL ADDRESS: STREET 1: 2575 S HIGHLAND DRIVE CITY: LAS VEGAS STATE: NV ZIP: 89109 FORMER COMPANY: FORMER CONFORMED NAME: GAMEX INDUSTRIES INC DATE OF NAME CHANGE: 19890928 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Nine Months Ended March 31, 1997 Commission File Number: 0-9047 GLOBAL GAMING AND TECHNOLOGY, INC. ------------------------------------------------------ (Exact Name of Registrant as specified in its charter) Delaware 02-0314487 - ------------------------------- ---------------------------- (State or other jurisdiction of (IRS Employer Identification incorporation or organization) Number) 2575 South Highland Drive, Las Vegas, Nevada 89109 -------------------------------------------------- (Address of principal executive offices) Registrant's Telephone Number, including Area Code: 702/794-0336 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 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 ----- ----- As of March 31, 1997, there was issued and outstanding 26,378,577 shares of Common Stock of Registrant. The aggregate market value of the shares of Common Stock held by non-affiliates (without admitting that any person whose shares are not included in determining such value is an affiliate) was not available because the prices for such shares are not quoted by the National Association of Securities Dealers through NASDAQ, its automated system for reporting quotes. Global Gaming and Technology, Inc. Form 10-Q Quarter Ended March 31, 1997 TABLE OF CONTENTS Page PART I - Financial Information: - -------------------------------- Item I - Financial Statements Accountants Review Report 4 Balance Sheet 5 Statement of Operations and Deficit 6-7 Statement of Cash Flows 8 Summary of Significant Accounting Policies 9-10 Notes to Financial Statements 11-13 Item II - Management's Discussion and Analysis of Financial Condition and Results of Operations. 14 PART II - Other Information: 15 - ---------------------------- Item 1 - Legal Proceedings. Item 2 - Changes in Securities. Item 3 - Defaults upon Senior Securities. Item 4 - Submission of Matters to a vote of security holders. Item 5 - Related Party Transactions. Item 6 - Exhibits and Reports on Form 8-K. - 2 - PART I Global Gaming and Technology, Inc. Financial Statements March 31, 1997 (See Accountant's Review Report) - 3 - Joseph F. Zerga, Ltd Certified Public Accountants 2950 E Flamingo Rd, Ste L Las Vegas, NV 89121 (702)732-2775 To the Board of Directors and Stockholders of Global Gaming and Technology, Inc. We have reviewed the accompanying balance sheet of Global Gaming and Technology, Inc. as of March 31, 1997 and the related statements of operations, deficit, and cash flows for the three months and nine months ended March 31, 1997 and 1996, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Global Gaming and Technology, Inc. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statement taken as a whole. Accordingly, we do not express such an opinion. Based on our review and subject to the preceding paragraph, we are not aware of any material modifications that should be made to the accompanying comparative financial statements in order for them to be in conformity with generally accepted accounting principles. The financial statements for the year ended June 30, 1996 were audited by us and we expressed an unqualified opinion on them in our report dated September 11, 1996, but we have not performed any auditing procedures since that date. Las Vegas, Nevada May 8, 1997 - 4 - Global Gaming and Technology, Inc. Balance Sheet March 31, 1997 and June 30, 1996 (See Accountant's Review Report)
Mar 31 June 30 1997 1996 (Unaudited) ASSETS CURRENT ASSETS Cash $ 46,420 $ 10,157 Note Receivable-Current (Note 1) 247,496 272,250 ----------- ----------- Total Current Assets 293,916 282,407 ----------- ----------- OTHER ASSETS Note Receivable (Note 1) 298,044 475,377 Machine Inventory 28,500 Deposits 300 300 ----------- ----------- Total Other Assets 326,844 475,677 ----------- ----------- TOTAL ASSETS $ 620,760 $ 758,084 =========== =========== LIABILITIES AND STOCKHOLDER'S DEFICIENCY CURRENT LIABILITIES Payroll Taxes $ 1,378 Accounts Payable 8,000 $ 8,175 Accrued Interest 1,056,790 1,021,387 Notes Payable (Note 2) 1,155,352 1,166,668 ----------- ----------- Total Current Liabilities 2,221,520 2,196,230 ----------- ----------- LONG-TERM LIABILITIES Notes Payable - Net of Current Maturities (Note 2) -0- -0- ----------- ----------- STOCKHOLDER'S DEFICIENCY (Note 3) Preferred Stock, $.01 par value, 1,000,000 Shares Authorized, none issued. -0- -0- Common Stock, $.01 par value, 27,000,000 Shares Authorized, 26,378,577 Shares Issued (Including 51,382 held in the company name at no cost). 263,786 263,786 Paid in Capital in excess of par value 3,395,062 3,395,062 Deficit ( 5,259,608) ( 5,096,994) ----------- ----------- Total Stockholder's Deficit ( 1,600,760) ( 1,438,146) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY $ 620,760 $ 758,084 =========== =========== The Accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 5 -
Global Gaming and Technology, Inc. Statement of Operations and Deficit For the Three Months Ended March 31, 1997 and the Nine Months Ended March 31, 1997 (See Accountant's Review Report) (Unaudited)
3 Months Ended 9 Months Ended March 31 March 31 1997 1997 REVENUE AND INCOME Income from Settlement (Note 1) $ -0- $ -0- Interest Income 15,309 20,601 ----------- ----------- Total Income 15,309 20,601 ----------- ----------- COSTS AND EXPENSES Professional Services 45,508 102,429 Interest 22,345 68,600 Transfer Fees 500 2,250 Filing Fees -0- -0- Telephone 306 619 Travel -0- 1,633 Office Expense 148 298 License and Taxes 340 368 Salaries Expense 3,250 3,250 Payroll Tax Expense 378 378 Miscellaneous 8 8 Bad Debt Expense 2,500 2,500 Advertising 446 882 ----------- ----------- Total Costs and Expenses 75,729 183,215 ----------- ----------- Net Income (Loss) ( 60,420) ( 162,614) Deficit Beginning of Period ( 5,199,188) ( 5,096,994) ----------- ----------- Deficit End of Period ( 5,259,608) ( 5,259,608) =========== =========== Net Income (Loss) per Common Share (Note 4) ($ .0023) ($ .0062) =========== =========== The accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 6 -
Global Gaming and Technology, Inc. Statement of Operations and Deficit For the Three Months Ended March 31, 1996 and the Nine Months Ended March 31, 1996 (See Accountant's Review Report) (Unaudited)
3 Months Ended 9 Months Ended March 31 March 31 1996 1996 REVENUE AND INCOME Income from Settlement (Note 1) $ 157,500 $ 157,500 Interest Income 1,371 6,971 ----------- ----------- Total Income $ 158,871 $ 164,471 ----------- ----------- COSTS AND EXPENSES Professional Services 26,385 79,467 Interest 23,087 69,261 Transfer Fees 750 2,250 Filing Fees -0- 275 Telephone 138 410 Travel 725 725 Office Expense -0- 135 License and Taxes -0- 25 Advertising -0- -0- ----------- ----------- Total Costs and Expenses 51,085 152,548 ----------- ----------- Income (Loss) for the period 107,786 11,923 Deficit Beginning of Period ( 5,197,751) ( 5,101,888) ----------- ----------- Deficit End of Period ($ 5,089,965) ($ 5,089,965) =========== =========== Income per Common Share (Note 4) $ .0041 $ .0005 =========== =========== The accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 7 -
Global Gaming and Technology, Inc. Statement of Cash Flows For the Nine Months Ended March 31, 1997 and 1996 (See Accountant's Review Reports) (Unaudited) CAPTION Mar 31 Mar 31 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) ($ 162,614) $ 11,923 Changes in Payroll Taxes 1,378 Accounts Payable ( 175) -0- Accrued Interest Payable 35,403 54,261 Note Receivable 202,087 11,862 Machine Inventory ( 28,500) -0- ----------- ----------- NET OPERATING CASH 47,579 78,046 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Capital Expenditure -0- -0- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Repayment of Notes Payable ( 11,316) -0- ----------- ----------- Net Increase (Decrease) in Cash 36,263 78,046 Cash Beginning of Period 10,157 24,081 ----------- ----------- Cash End of Period $ 46,420 $ 102,127 =========== =========== The accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 8 -
Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements March 31, 1997 THE COMPANY ----------- The Company was incorporated in the State of Delaware in 1973 and has elected June 30 as its year end. The Company has been engaged in the research, devel- opment, manufacture, and marketing of electronic gaming devices and coinless games of chance. PROPERTY AND EQUIPMENT ---------------------- The Company does not own any real or personal property. INCOME TAXES ------------ Because of a net operating loss carry forward from prior years, the Company does not have an income tax obligation. LITIGATION ---------- On or about May, 1994, the Company instituted litigation in the United States District Court for the District of New Jersey for patent infringement against Bally's Park Place, Inc., Trump Plaza Associates, Trump Taj Mahal Associates, Trump Castle Associates, The Claridge Hotel and Casino Corporation, Resorts International Hotel, Atlantic Showboat Inc., and Greate Bay Hotel and Casino, Inc. Global was seeking damages to adequately compensate for the past infringement of the patent in suit by each of the defendants together with interest and cost. In this law suit, Global Gaming and Technology, Inc. contends that the defendants named in the complaint infringed upon a patent owned in connection with the manufacture, use or sale of slot machines driven by stepper motors. On or about July 6, 1994, IGT North America, Universal Distributing of Nevada, Inc. and Sigma Game, Inc. filed a civil complaint in the United States District Court for the District of Nevada against Global Gaming and Technology, Inc. for declaratory judgment of non-infringement, invalidity, unenforceability and laches. This lawsuit arose as a result of the New Jersey litigation (see above paragraph), and was filed for the purpose of having Global's patent declared invalid. The Company filed a counter-claim for infringement against IGT North America, Universal Distributing of Nevada, Inc. and Sigma Game, Inc. - 9 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements March 31, 1997 As a result of this action, on June 30, 1994 the Company entered into a license agreement with Bally Gaming, whereby the Company grants a non- exclusive, personal, non-transferable right and paid-up license to make, have made, use and sell, test, lease or otherwise dispose of licensed products under claims of this license patent. The Company will receive a non- refundable net royalty payment in the amount of one million dollars ($1,000,000), (See Note 1 for details). The Company has also settled independently with Sigma Game, Inc. and Universal Distributing of Nevada, Inc. (See Note 1 for details). On September 18, 1996, Global Gaming & Technology, Inc. completed its patent infringement trial (U.S. Patent 4,099,722) against International Gaming Technology (IGT) in the United States Federal District Court in Reno, Nevada. The decision from the United States District Court for the District of Nevada is as follows. On February 18, 1997, the United States District Court for the District of Nevada entered a Decision and Order regarding Global's patent infringement claim which was pending against IGT. In the Decision and Order, the Court found that IGT's reel-type slot machines infringe Global's patent, but held that the patent was invalid because the invention disclosed therein was on sale more than one year prior to the date on which Global's patent application was filed. Subsequently, the United States District Court for the State of Nevada agreed to entertain a motion for reconsideration of that portion of the Decision which concerns whether Global's patent is invalid. Global's request for reconsideration is currently pending with the Court. The Court further indicated that no judgement order would be entered in this case until Global's request for reconsideration is resolved. - 10 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements March 31, 1997 NOTE 1 - Notes Receivable - ------------------------ The total amount due pursuant to the promissory note from Ballys Gaming shall be paid in sixty consecutive installments, pursuant to the following schedule: A. $10,166.66 per month was paid on the first day of each month, starting on July 1, 1994, and continuing through December 1, 1996. B. $21,500.00 per month shall be paid on the first day of each month, starting on January 1, 1997, and continuing through June 1, 1999. C. The scheduled payments under this note have been discounted at 8% to reflect the present value of the note. Note Receivable - Current Portion $225,205 Note Receivable - Non-Current 286,470 -------- Balance as of March 31, 1997 $511,675 ======== The amount of this royalty payment is secured by a note from Bally's Gaming. Since June 30, 1994, the company has been receiving timely monthly installment payments on this note. However, as of May 1997, Bally has ceased making payments on the promissory note which it signed pending final resolu- tion of the patent infringement litigation against IGT. Global disputes that Bally has any right to suspend these payments and is currently pursuing a resolution of the matter. Also due is a Promissory Note from Sigma Game, Inc. from a settlement arising out of litigation. The following is a schedule of payments made and to be made to Global Gaming and Technology, Inc. and has been discounted at 8% to reflect the present value of the remaining payments, (Current $22,291, Non-Current $11,574): February 7, 1996 $95,000 February 7, 1997 25,000 February 7, 1998 25,000 February 7, 1999 12,500 Settlement with UDN consisted of three payments of $19,513, final payment received in July of 1996, and 10 slot machines (The Company's share valued at $28,500) received during the first quarter of 1997. - 11 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements March 31, 1997 NOTE 2 - Notes Payable - ----------------------
Current Non-Current Maturities Maturities Total Michael Wichinsky Payable upon demand. Interest payable quarterly at 8% $ 723,983 $ - 0 - $ 723,983 Michael Wichinsky Payable upon demand. Interest payable quarterly at 10% 105,490 - 0 - 105,490 William T. O'Donnel, Sr. Payable upon demand. Interest payable quarterly at 8% 306,436 - 0 - 306,436 State of New Jersey Payable in monthly installments of $1,363 including interest. This note is in arrears. 19,443 - 0 - 19,443 ---------- --------- ---------- TOTAL $1,155,352 - 0 - $1,155,352 ========== ========= ========== Total accrued interest payable at 3/31/97 is $1,056,790. $9,833 of this amount is owed to the Estate of William T. O'Donnell, Sr. and the balance of $1,046,957 is owed to Michael Wichinsky.
NOTE 3 - Stockholders' Deficiency - ---------------------------------
Paid in Capital in Number of $.01 Par Excess of Shares Value Par Value (Deficit) ----------- -------- ---------- ------------ Balance at June 30, 1995 26,378,577 $263,786 $3,395,062 ($5,101,888) Net Income (Loss) For The Year Ended June 30, 1996 4,894 ----------- -------- ---------- ------------ Balance at June 30, 1996 26,378,577 $263,786 $3,395,062 ($5,096,994) ----------- -------- ---------- ------------ Net Income (Loss) For The Nine months ended 3/31/97 ( 162,614) ----------- -------- ---------- ------------ Balance at 3/31/97 26,378,577 $263,786 $3,395,062 ($5,259,608) =========== ======== ========== ============
- 12 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements March 31, 1997 NOTE 4 - Earnings (Loss) Per Share - ---------------------------------- Income (Loss) per share was computed by dividing the net income or loss by the weighted average number of shares outstanding during the period. - 13 - ITEM II - Management's Discussion and Analysis of Financial Condition and Results of Operations As of March 31, 1997, the Company had negative working capital of $1,927,604. The Company has no commitments for capital expenditures. As of March 31, 1997, the Company had negative stockholders' equity of $1,600,760. During the nine months ended March 31, 1997, the Company realized total revenues of $20,601 and expenses of $183,215. GLOBAL GAMING AND TECHNOLOGY, INC. has been engaged in the design, manufacture, and marketing of electronic microprocessor-controlled gaming machines. The Company, which was incorporated in Delaware in 1973, maintains its principal offices at 2575 South Highland Drive, Las Vegas, Nevada 89109. No machines have been manufactured during the nine months ended March 31, 1997. The Company has been dormant for the past several years. Patents expired at the end of July, 1995 and are the subjects of current litigation pending a ruling by the court. Primary North American markets for gaming devices are Las Vegas, Nevada, and Atlantic City, New Jersey. Because of the high cost of obtaining gaming licenses in Nevada and New Jersey, the Company does not sell its machines in these states. Compared to Nevada and New Jersey, other markets are relatively immaterial, but growing. The Company does not have the resources to apply for licenses in Nevada and New Jersey at the present time. The gaming industry is highly competitive, and the Company is at a severe competitive disadvantage because of its size and lack of resources. The Company has not generated any sales in the last three months and does not anticipate sales in the foreseeable future. The Company employs one person on a part-time basis. The lack of gaming licenses in Nevada and New Jersey is a severe detriment to growth. In effect, sales are confined to much smaller and less lucrative markets. During the nine months ended March 31, 1997, the Company did not achieve any sales. - 14 - PART II - OTHER INFORMATION ITEM 1 - Legal Proceedings - -------------------------- See Part I - Summary of Significant Accounting Policies - Litigation (Page 9-10) 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 - Related Party Transactions - ----------------------------------- During the nine months ended March 31, 1997, Michael Wichinsky (19% stockholder) was repaid $31,252 from the Company as interest and principal payments on his note to the Company (Current balance $723,983, 8% interest, payable upon demand). Michael Wichinsky has a second note to the Company in the amount of $105,490 (10% interest, payable upon demand). The Estate of William T. O'Donnell, Sr. (10% stockholder) was repaid $13,261 from the Company as interest and principal payments on his note to the Company (Current balance $306,436, 8% interest, payable upon demand). Accrued Interest Payable on these notes as of March 31, 1997 amounts to $1,056,790, $1,046,957 payable to Wichinsky and $9,833 payable to O'Donnell. ITEM 6 - Exhibits and Reports on Form 8-K - ----------------------------------------- Not Applicable - 15 - SIGNATURES ---------- Pursuant to the requirements of Section 13 or Section 15(d) 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. DATED: 5/12/97 ------------------- GLOBAL GAMING & TECHNOLOGY, INC. BY: Mark Sarason -------------------------- Mark Sarason President and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons as a majority of the members of the Board of Directors of the registrant and in the capacities and on the dates indicated. DATED: 5/12/97 ----------------------- Mark Sarason -------------------------- Mark Sarason Secretary/Treasurer & Director EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR 10-Q
5 1 9-MOS Jun-30-1997 Jul-01-1996 Mar-31-1997 46420 0 247496 0 0 293916 0 0 620760 2221520 0 263786 0 0 (1864546) 620760 0 20601 0 0 114615 0 68600 (162614) 0 (162614) 0 0 0 (162614) .006 .006
-----END PRIVACY-ENHANCED MESSAGE-----