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 Six Months Ended December 31, 2000
Commission File Number: 0-9047
GLOBAL GAMING AND TECHNOLOGY, INC.
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(Exact Name of Registrant as specified in its charter)
Delaware 02-0314487
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(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
1200 N Federal Highway #200, Boca Raton, FL 33432
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 561-447-8222
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 December 31, 2000, there was issued and outstanding 26,328,028 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 December 31, 2000
TABLE OF CONTENTS
PART I - Financial Information: Page
--------------------------------
Item I - Financial Statements
Balance Sheet 4
Statement of Operations and Deficit 5
Statement of Cash Flows 6
Summary of Significant Accounting Policies
and Notes to Financial Statements 7-9
Item II - Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 10
PART II - Other Information: 11
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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.
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PART I
Global Gaming and Technology, Inc.
Financial Statements
December 31, 2000
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Global Gaming and Technology, Inc.
Balance Sheet
December 31, 2000 and June 30, 2000
Dec 31 June 30
2000 2000
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 76,844 $ 15,867
Inventories (Note 5) 275,390 4,000
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Total Current Assets 352,234 19,867
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OTHER ASSETS
Deposits 300 300
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Total Other Assets 300 300
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TOTAL ASSETS $ 352,534 $ 20,167
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LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES
Accounts Payable $ 14,944 $ 9,969
Accrued Interest 1,220,016 1,185,016
Unearned Revenue 360,150 0
Notes Payable (Note 4) 860,935 860,935
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Total Current Liabilities 2,456,045 2,055,920
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STOCKHOLDER'S DEFICIENCY (Note 6)
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). 263,280 263,280
Paid in Capital in excess of
par value 3,395,568 3,395,568
Accumulated Deficit (5,762,359) (5,694,601)
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Total Stockholder's Deficit (2,103,511) (2,035,753)
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TOTAL LIABILITIES AND
STOCKHOLDER'S DEFICIT $ 352,534 $ 20,167
=========== ===========
The accompanying notes are an integral part of these financial statements.
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Global Gaming and Technology, Inc.
Statement of Operations and Deficit
For the Three Months Ended December 31, 2000 and 1999
And the Six Months Ended December 31, 2000 and 1999
(Unaudited)
Three Months Ended Six Months Ended
December 31 December 31 December 31 December 31
2000 1999 2000 1999
REVENUE AND INCOME
Other Income $ 646 $ -0- $ 646 $ -0-
------------ ------------ ------------ ------------
Total Income -0- -0- -0- -0-
------------ ------------ ------------ ------------
COSTS AND EXPENSES
Commissions 6,500 0 6,500 0
Licenses & Taxes 800 0 2,400 0
Professional Fees 2,590 2,819 4,659 6,663
Rent 1,120 0 1,120 0
Travel 6,552 0 6,552 0
Interest 17,500 17,500 35,000 35,000
Transfer Fees 1,000 774 2,500 1,524
Salaries and Wages 4,875 4,875 8,125 9,750
Payroll Tax Expense 544 517 890 1,061
Miscellaneous 312 50 658 89
Total Costs ------------ ------------ ------------ ------------
and Expenses 41,793 26,535 68,404 54,087
------------ ------------ ------------ ------------
Net Income (Loss) (41,147) (26,535) (67,758) (54,087)
Deficit Beginning
of Period (5,721,212) (5,618,382) (5,694,601) (5,590,830)
------------ ------------ ------------ ------------
Deficit End of Period (5,762,359) (5,644,917) (5,762,359) (5,644,917)
============ ============ ============ ============
Loss per Common Share $ (.002) $ (.001) $ (.003) $ (.002)
============ ============ ============ ============
Weighted Average Number of
Common Shares Outstanding 26,328,028 26,328,028 26,328,028 26,328,028
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
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Global Gaming and Technology, Inc.
Statement of Cash Flows
For the Six Months Ended December 31, 2000 and 1999
(Unaudited)
Six Months Ended
December 31 December 31
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (67,758) $ (54,087)
Changes in in
Inventories (271,390) 0
Unearned Revenue 360,150 0
Accounts Payable 4,975 (708)
Accrued Interest Payable 35,000 35,000
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NET OPERATING CASH 60,977 (19,795)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures -0- -0-
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CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on Debt -0- -0-
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Net Increase (Decrease) in Cash 60,977 (19,795)
Cash Beginning of Period 15,867 50,700
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Cash End of Period $ 76,844 $ 30,905
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Supplemental Disclosures
Interest Expense $ 35,000 $ 35,000
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The accompanying notes are an integral part of these financial statements.
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Global Gaming and Technology, Inc.
Notes to Financial Statements
December 31, 2000
NOTE 1 - Summary of Significant Accounting Policies:
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Global Gaming and Technology, Inc. (The Company) was incorporated in the State
of Delaware in 1973 and has elected June 30 as its year end. The Company, al-
though dormant until recently, is been engaged in the research, development,
manufacture, and marketing of electronic gaming devices and coinless games of
chance.
The preparation of financial statements in conformity with generally accepted
accounting prnciples requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of con-
tingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period.
NOTE 2 - Organization's Ability to Continue as a Going Concern:
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The Company had been dormant for the past several years and lacked the re-
sources to be competitive in the gaming industry at the present time. As of
December 31, 2000, the Company has negative workling capital of $2,103,811
and stockholders' deficit of $2,103,511.
The Company initiated a patent infringement case. The case is being appealed
by both parties. The manner in which the litigation is resolved is likely to
have significant financial impact on the Company.
NOTE 3 - Related Party Transactions:
------------------------------------
Notes payable at December 31, 2000 and 1999 consist of $841,491 due to stock-
holders bearing interest at 8% and 10% and are due on demand. Accrued interest
at December 31, 2000 and 1999 was $1,220,016 and $1,150,397 and the Company
incurrred interest expense of $17,500 and $17,500 in the three months then
ended. See "Note 4 - Notes Payable" for details.
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Global Gaming and Technology, Inc.
Notes to Financial Statements
December 31, 2000
NOTE 4 - Notes Payable
----------------------
Current Non-Current
Maturities Maturities Total
Michael Wichinsky
Payable upon demand.
Interest payable
quarterly at 8% $ 511,644 $ - 0 - $ 511,644
Michael Wichinsky
Payable upon demand.
Interest payable
quarterly at 10% 105,490 - 0 - 105,490
Estate of William
T. O'Donnell, Sr.
Payable upon demand.
Interest payable
quarterly at 8% 224,357 - 0 - 224,357
State of New Jersey
Payable in monthly
installments of $1,363
including interest.
This note is in arrears. 19,444 - 0 - 19,444
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TOTAL $ 860,935 - 0 - $ 860,935
========== ========= ==========
The Company incurred interest expense totaling $17,500 and $17,500 on these
notes during the three months ended December 31, 2000 and 1999, respectively.
NOTE 5 - Inventories:
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On November 16, 2000, the Company purchased eighty(80) used, reconditioned
games of various types and manufactures at a cost of $271,390. These machines
are part of a contract-of-sale for a total of 230 machines with Sha Ka Wah
Casino in Hopland, CA.
The Company also has inventory consisting of ten (10) slot machines from a
settlement arising out of litigation with Univeral Distributing of Nevada,
Inc. Pursuant to SFAS 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of", the Company evaluated the recov-
erability of the long-lived assets. Due to rapid changes in gaming technol-
ogy, the machines did not hold their value. The estimated fair value was
based on a offer to purchse the machines.
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Global Gaming and Technology, Inc.
Notes to Financial Statements
December 31, 2000
NOTE 6 - Unearned Revenue:
--------------------------
On October 6, 2000, the company entered into a Contract for Sale of Goods with
Sho-Ka-Wah Casino, located in Hopland, California, for the purchase of 230
used, reconditioned machines for a total price of $720,300. The $360,150 in
Unearned Revenue represents a 50% down payment on this contract.
NOTE 7 - Income Taxes:
----------------------
The benefit for income taxes is different than the amount computed by applying
the statutory federal income tax rate to net loss before taxes. A reconcilia-
tion of the net income tax benefit follows:
Three Months Ended
12/31/00 12/31/99
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Computed tax benefit at federal statutory rate $ 23,038 $ 18,390
Deferred income tax valuation allowance (23,038) (18,390)
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Provision for Federal Income Taxes $ 0 $ 0
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The Provision for federal income taxes consisted of the following:
12/31/00 12/31/99
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Current $ 0 $ 0
Deferred 0 0
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Total $ 0 $ 0
========= =========
The Deferred Tax Asset consisted of the following:
Tax Benefit of NOL carryforwards $ 914,200 $ 973,100
Valuation Allowance (914,200) (973,100)
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Net Deferred Tax Asset $ 0 $ 0
========= =========
The Company has a net operating loss carryforward ("NOL") for federal income
tax reporting purposes at June 30, 2000 of $2,688,846. A portion of the NOL
expires after each year. $226,859 will expire at June 30, 2001 if not utilized.
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ITEM II - Management's Discussion and
Analysis of Financial Condition
and Results of Operations
As of December 31, 2000, the Company had negative working capital of
$2,103,811. The Company has no commitments for capital expenditures.
As of December 31, 2000, the Company had stockholders' deficit of $2,103,511.
During the three months ended December 31, 2000, the Company realized $646 in
interest income and incurred expenses of $41,793, $17,500 of which is accrued
interest expense.
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 1200 N Federal Highway, Boca Raton, Florida 33432
Primary North American markets for gaming devices are Las Vegas, Nevada, and
Atlantic City, New Jersey. The Company does not have the resources to apply
for licenses in Nevada and New Jersey. However, based upon the opportunities
which the Directors perceive to exist in the California Indian Tribal casinos,
the Company registered with the California Department of Justice in June,
2000. The Company intends to register in other Indian Gaming jurisdictions.
In October, 2000, the Company entered into a contract with Sho-Ka-Wah Casino,
located in Hopland, California, for the sale of 230 used and reconditioned
machines. A fifty percent (50%) down payment for the purchase of these
machines has been collected.
Patents expired at the end of July, 1995, and are the subject of current
litigation pending a ruling by the court.
The Company employs one person on a part-time basis.
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PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
--------------------------
The Company initiated a patent infringement case which is being appealed by
both parties. The manner in which the litigation is resolved is likely to have
significant financial impact on the Company.
ITEM 2 - Changes in Securities
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None.
ITEM 3 - Defaults Upon Senior Securities
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Not Applicable
ITEM 4 - Submission of Matters to a Vote of Security Holders
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None
ITEM 5 - Related Party Transactions
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Michael Wichinsky (19% stockholder) has a note to the Company with a current
balance of $511,644, 8% interest, payable on demand. Michael Wichinsky has a
second note to the Company in the amount of $105,490 (10% interest, payable
on demand). The Estate of William T. O'Donnell, Sr. (17% stockholder) has a
note to the Company with a current balance of $224,357, 8% interest, payable
on demand. There were no principal or interest payments on these notes during
the three months ended December 31, 2000. Accrued interest payable on these
notes as of December 31, 2000 amounts to $1,220,016, of which $1,172,563 is
payable to Wichinsky and $47,453 is payable to O'Donnell.
ITEM 6 - Exhibits and Reports on Form 8-K
-----------------------------------------
None.
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SIGNATURES
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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.
GLOBAL GAMING & TECHNOLOGY, INC.
By: /s/Glenn E Wichinsky Date:
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Glenn E Wichinsky
President, Secretary and Tresurer
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.
By: /s/Claudia D Wichinsky Date:
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Claudia D Wichinsky, Director
By: /s/Constance Koplow Date:
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Cosntance Koplow, Director
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