ITEM 1.
BUSINESS
General
On July 15, 2003, Beeper Plus, Inc. changed its name to Western Gaming Corporation. Western Gaming Corporation (the "Company" or "WGC"), a Nevada corporation, was incorporated on March 25, 1986, and has its corporate headquarters at 1515 E. Tropicana Ave, #140, Las Vegas, NV, 89119. WGC was in the business of collecting, organizing and disseminating timely sports information through wireless services to individual and corporate customers throughout the United States, Canada and the Caribbean, as well as news information through a network of resellers.
While the Company maintained its corporate name, Beeper Plus, Inc., we entered into a Purchase and Sale transaction on March 19, 2001, which became effective as of April 1, 2001. At that time, we sold the paging business known as The Sports Page and Score Page to BeepMe, a third party vendor and our creditor. As a consequence of the sale of our paging business, we ceased business operations in the paging business. We are currently seeking new business opportunities through acquisitions or a merger.
Competition
The dissemination of sports and news information is a competitive industry. There are a number of entities that were in direct or indirect competition with us in disseminating sports information. There are a number of enterprises that provide sports information through a number of traditional
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channels such as newspapers and television, and now through new media such as the Internet and wireless hand-held devices and PDAs, two-way pagers and mobile phones. Several disseminate sports information through a hand-held pager in a similar fashion as we did, while others feed sports information through cable television sports channels, commercial television sports news programs, sports information periodicals, the sports section of newspapers and radio, direct dial "900" score lines and online computer services. No one outlet dominates any of these channels. New technologies and providers have made the dissemination of information at any time and anywhere easy and convenient for any user to access sports information on a timely basis.
Intellectual Property
We had invested significantly in building our Sports Page and Score Page brands. We did not register any of our trademarks, nor did we investigate whether we had infringed on third party trademark rights.
Employees
As of June 30, 2005, we had no employees.
General Information
We are a SEC reporting company and file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934. We file these reports electronically with the SEC. The SEC maintains an Internet site at "http://www.sec.gov/", that contains these reports, any proxy and information statements, and other information that we are required to file. Go to the EDGAR link for company filings. A copy of this report or any of our reports are available without charge upon request by contacting our corporate office.
ITEM 2.
ITEM 2.
PROPERTIES
We own no real property and we currently utilize office space contributed by Mr. Frank DeRenzo, one of our directors and shareholder, at no charge to us.
We had leased office space, located at 3900 Paradise Rd., Suite 201, Las Vegas, Nevada 89109 at the rate of $6,113 per month. The lease expired on June 30, 2001.
We sublet office space to a non-related party for $1,100 per month on a month to month basis.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS
We are not aware of any pending or threatened litigation against us that we expect will have a material adverse effect on our business, financial condition, liquidity, or operating results. However, legal claims are inherently uncertain and we cannot assure you that we will not be adversely affected in the future by legal proceedings.
ITEM 4.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5.
ITEM 5.
MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Common Stock, par value $.001, currently trades on the OTC Bulletin Board (OTCBB). Our initial registration statement was declared effective by the Securities and Exchange Commission on June 20, 1986. As of our fiscal year ended June 30, 2005, there were approximately 765,035 shares traded through the National Association of Securities Dealers.
The market price information for our common equity pursuant to Item 201(a)(i)(iii) for each fiscal quarter from the fourth quarter ending June 30, 2003, through the fourth quarter ending June 30, 2005, was as follows:
High
Low
6-30-2003
Fourth Quarter
.12
.04
9-30-2003
First Quarter
.04
.004
12-31-2003
Second Quarter
.04
.04
3-31-2004
Third Quarter
.04
.04
6-30-2004
Fourth Quarter
.04
.04
9-30-2004
First Quarter
.08
.05
12-31-2004
Second Quarter
.15
.08
3-31-2005
Third Quarter
.53
.16
6-30-2005
Fourth Quarter
.05
.05
The above bid and asked quotations represent prices between dealers and does not include retail markup, markdown or commission. They do not represent actual transactions and have not been adjusted for stock dividends or splits.
No dividends have been declared with respect to the Common Stock since our inception, and we don't anticipate paying dividends in the foreseeable future. However, there are no restrictions on our ability to declare dividends on our Common Stock.
On June 30, 2005, the approximate number of holders of record of our $.001 par value Common Stock was 254.
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA
We have not paid any dividends on our stock.
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ITEM 7.
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations for the fiscal year ended June 30, 2005 compared to fiscal year ended June 30, 2004
Revenues
We had revenues of $0 for the fiscal year ended June 30, 2005, as compared to $0 for the fiscal year ended June 30, 2004. Our Statement of Operations reflects a net loss of $24,626 for the fiscal year ended June 30, 2005, compared to a net loss of $20,590 for the fiscal year ended June 30, 2004. This represented an increase in the net loss of $4,036 or approximately 20%, due to the fact, that while we increased our operating loss to $36,636 for fiscal year ended 2005 as compared to a loss of $19,803 for fiscal year ended 2004, our other income increased to 12,010 for 2005 as compared to a loss of $787 for 2004.
For the fiscal year ended June 30, 2005, we were not successful in establishing any business operations, and as a consequence, we did not generate any revenues. We are in the process of identifying and developing new business ventures and/or business partners through acquisitions or mergers.
General and Administrative Expenses
General and administrative expenses consists primarily of Legal, Accounting, Consulting and related costs, and administration expenses including storage rent, office and postage. General and administrative expenses increased from $19,803 for the fiscal year ended June 30, 2004, to $36,636 for the fiscal year ended June 30, 2005. No salaries or wages were paid during either fiscal period.
Liquidity and Capital Resources
We had a working capital deficit of $209,261 at June 30, 2005, compared to a working capital deficit of $232,635 at June 30, 2004. For the fiscal year ended June 30, 2005, cash used in operating activities was $26,505, as compared to $10,508 for the fiscal year ended June 30, 2004. For the fiscal year ended June 30, 2005, investing activities provided $12,931 as compared to providing $0 for the fiscal year ended June 30, 2004. For the fiscal year ended June 30, 2005, financing activities provided $14,000 as compared to providing $10,007 for the fiscal year ended June 30, 2004. The $3,993 or approximately 40% increase in financing activities was primarily do to an advance of $14,000 by a related party. Net cash increased to $426 for the fiscal year ended June 30, 2005 as compared to a decrease of $501 for the fiscal year ended June 30, 2004.
At the fiscal year ended June 30, 2005, we had short-term payables of, a $16,000 unsecured Note Payable to a shareholder, at an interest rate of 12% per annum, Additionally, at the fiscal year ended 2005, we had unsecured, non-interest bearing Notes, with an open term, due on demand, Note Payable, to a related party of $52,000.
We generated $0 revenues for fiscal year ended June 30, 2005 and a net loss of $24,626 for the fiscal year ended June 30, 2005, resulting in an accumulated deficit of $1,267,130 at June 30, 2005. Our ability to continue as a going concern is ultimately dependent on our ability to obtain another business venture and/or business partners and additional financing. We may choose to raise additional cash through the sale of equity or debt and obtain another business venture through a merger or acquisition. No assurance can be given that we will be successful in these efforts. We have no plans to pay dividends with respect to Common Stock in the foreseeable future.
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Results of Operations for the fiscal year ended June 30, 2004 compared to fiscal year ended June 30, 2003
Revenues
We had revenues of $0 for the fiscal year ended June 30, 2004, as compared to $0 for the fiscal year ended June 30, 2003. Our Statement of Operations reflects a net loss of $20,590 for the fiscal year ended June 30, 2004, compared to net income of $9,847 for the fiscal year ended June 30, 2003. This represented an increase in the net loss of approximately 109% due to interest and miscellaneous income of $233 for the fiscal year ended 2004 as compared to $8,019 for the fiscal year ended 2003.
For the fiscal year ended June 30, 2004, we were not successful in establishing any business operations, and as a consequence, we did not generate any revenues. We are in the process of identifying and developing new business ventures and/or business partners through acquisitions or mergers.
General and Administrative Expenses
General and administrative expenses consists primarily of Legal, Accounting, Consulting and related costs, and administration expenses including storage rent, office and postage. General and administrative expenses increased from $16,981 for the fiscal year ended June 30, 2003, to $19,803 for the fiscal year ended June 30, 2004. No salaries or wages were paid during either fiscal period.
Liquidity and Capital Resources
We had a working capital deficit of $232,635 at June 30, 2004, compared to a working capital deficit of $212,045 at June 30, 2003. For the fiscal year ended June 30, 2004, cash used in operating activities was $10,507, as compared to $12,574 for the fiscal year ended June 30, 2003. For the fiscal year ended June 30, 2004, investing activities provided $0 as compared to providing $0 for the fiscal year ended June 30, 2003. For the fiscal year ended June 30, 2004, financing activities provided $10,007 as compared to providing $1,500 for the fiscal year ended June 30, 2003. The $8,500 or approximately 570% increase in financing activities was primarily do to an advance by a related party. Net cash decreased by $501 for the fiscal year ended June 30, 2004 as compared to a decrease of $11,074 for the fiscal year ended June 30, 2003.
During the year ended June 30, 2004, we had short-term payables of, an advance of $1,500 from a related party, a $7,000 Note, unsecured, at an interest rate of 12% per annum, a $16,000 Note, Additionally, during the fiscal year ended 2004, we decreased an unsecured, non-interest bearing notes, due on demand and an open term, Note Payable, by $3,000 to $52,000.
We generated $0 revenues for fiscal year ended June 30, 2004 and a net loss of $20,590 for the fiscal year ended June 30, 2004, resulting in an accumulated deficit of $1,242,504 at June 30, 2004. Our ability to continue as a going concern is ultimately dependent on our ability to obtain another business venture and/or business partners and additional financing. We may choose to raise additional cash through the sale of equity or debt and obtain another business venture through a merger or acquisition. No assurance can be given that we will be successful in these efforts. We have no plans to pay dividends with respect to Common Stock in the foreseeable future.
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ITEM 7A.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Financial Statements commencing on page F-i.
ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have not had any changes in and disagreements with accountants on accounting and financial disclosure during our last two (2) fiscal years ended June 20, 2003 and June 30, 2004.
ITEM 9A.
ITEM 9A.
CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures.
Based on their evaluation as of the end of the period covered by this Form 10-K, the Company's principal executive officer and principal financial officer have carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon this evaluation, the principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures are effective in timely informing them of material information relating to the Company required to be disclosed in its reports under the Securities Exchange Act of 1934.
(b) Changes in Internal Control over Financial Reporting.
There was no change in the Company's internal control over financial reporting during the Company's fiscal year covered by this Form 10-K that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
ITEM 9B.
ITEM 9B.
OTHER INFORMATION
On July 21, 2005, Western Gaming Corporation entered into a Stock Purchase Agreement with the sole shareholder of Inrob Ltd., Ben Tsur Joseph, whereby all of the issued and outstanding shares of Inrob Ltd. were acquired by Western Gaming Corporation for a total of 26,442,585 shares of common stock of Western Gaming Corporation, to be issued after the upcoming reverse split of the common stock of Western Gaming Corporation at a rate of 10.98 shares of old common stock for each one share of new common stock. The shares issued to Ben Tsur Joseph will give Ben Tsur Joseph control over approximately 88% of the issued and outstanding shares of the common stock immediately after the effectiveness of the reverse split and the share issue to Equity Capital Investments:
As part of the transaction, Mr. Frank DeRenzo, former President and former controlling shareholder of the Company, who sold his shares of common stock to Inrob Ltd., will receive a total of 350,000 shares of post reverse common stock for consultancy services provided in the past.
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On July 21, 2005, control of the Company was assumed by Inrob, Ltd, pursuant to the purchase from Equity Capital Investment, Inc. of 22,590,417 shares of pre reverse common stock of the Company including 19,151,705 shares out of a total of 29,209,273 shares of pre reverse common stock of the Company which were issued in exchange for debts of $40,000 due to Mr. DeRenzo from the Company.
The transaction involved the payment of a total of $475,000 for the entire amount of shares, previously owned by Frank DeRenzo.
Based upon the total number of shares owned by Inrob Ltd., Inrob Ltd. controlled, prior to the issue of the shares to Mr. Joseph approximately 64% of the total issued and outstanding shares of common stock.
PART III
ITEM 10.
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth-certain information regarding each director and executive officer of the Company:
Name
Age
Position
Frank H. DeRenzo
President and Director
Robert Muniz
Director
DeAnn Moore
Secretary, Treasurer and Director
Our Directors are elected to hold office until the next annual meeting of shareholders or until their respective successors are duly elected and qualified. Our Officers serve at the discretion of the Board of Directors and are appointed by the Board of Directors.
Frank H. DeRenzo. Mr DeRenzo was elected as our President and Director on March 20, 1998. From May of 1997 to March 26, 1999, Mr. DeRenzo served as President and Director of Maven Enterprises, Inc. of Las Vegas, NV, a media company within the gaming industry. Since 1989, he has been Vice-President of gaming sales for Trans-Lux Corporation, the leading manufacturer of LED Displays worldwide, and is responsible for sports and race book contracts. From
to 1989, he was President of Intermark Imagineering, Inc. (manufacturer of computerized Keno systems). From 1984 to 1987, Mr. DeRenzo was Vice President of Sports Form, Inc. (satellite broadcast of horse racing). From 1984 to 1987, he was Vice-President of Satellite Simulcast Service, Inc. (transmission and encryption services to racetracks).
Robert Muniz. Mr. Muniz was re-appointed as our Director on April 1, 1999. From March 20, 1998 to July 1, 1998, Mr. Muniz was a Director of the Company. Mr. Muniz has been in the gaming industry for over 20 years. From 1978 to 2002, Mr. Muniz was the Race Book Manager at the Barbary Coast & Casino in Las Vegas, Nevada; the Race Book Manager at the Gold Coast Hotel & Casino; and the Director of Race Book Operations for Coast Resorts, Inc. Mr.Muniz has served as a consultant to Hyatt Regency, Riveria Hotel & Casino, Las Vegas Dissemination Company and the University of Arizona's Race Track Industry Program. Mr. Muniz also assisted in the establishment of the Nevada Pari-Mutuel Association.
DeAnn Moore. Ms. Moore was appointed as one of our Director's on April 16, 2001, and as our Secretary/Treasures on June 27, 2003. Ms. Moore joined the Company on April 6, 1998, as an administrative assistant and was promoted to office manager/bookkeeper. Ms. Moore has been a retail manager for five (5) years working for Country and More, a home decor and gift store and Pier One Imports.
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ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation we paid for our fiscal year ending June 30, 2005, to each of our executive officers. During the fiscal years ending June 30, 2005, 2004, and 2003, no Executive Officer or Director of the Company received cash remuneration in excess of $60,000. There are no standard arrangements for the compensation of directors.
OPTION GRANTS IN FISCAL YEAR 2004
We did not issue any option grants in the fiscal year 2005.
Our Employee Stock Option Plan was previously extended to 2010. Currently no options have been issued under the Employee Stock Option Plan.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth information as of the date hereof, based on information obtained from the persons named below, with respect to the beneficial ownership of the Common Stock by (i) each person known by us to own beneficially 5% or more of the Common Stock, (ii) each director and officer of the Company and (iii) all directors and officers as a group:
Name and Address of Beneficial Owner
Shares owned Beneficially
% Owned
Frank DeRenzo
1515 E. Tropicana Ave., #140
Las Vegas, NV 89119
3,438,712
57.23%
Robert Muniz
1515 E. Tropicana Ave., #140
Las Vegas, NV 89119
100,000
1.67%
DeAnn Moore
1515 E. Tropicana Ave., #140
Las Vegas, NV 89119
51,600
.86%
Officers and Directors, and 5% shareholders as a group (3 in number)
3,590,312
59.76%
The number of shares of Common Stock owned are those "beneficially owned" as determined under the rules of the Securities and Exchange Commission, including any shares of Common Stock as to which a person has sole or shared voting or investment power and any shares of Common Stock which the person has the right to acquire within 60 days through the exercise of any option, warrant or right.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our Directors, Executive Officers and persons who own more than 10% of a registered class of the Company's securities to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Directors, Executive Officers and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) reports they file.
We believe that during and for the year ended June 30, 2005, none of our Directors, Executive Officers and greater than 10% stockholders complied with Section 16(a) filing requirements. These persons have been advised as to the necessity to comply with Section 16(a) filing requirements.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended June 30, 2005, we did not enter into any transactions with related parties.
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
Spector and Wong, LLP billed us an aggregate of approximately $8,000 in fees for professional services rendered in connection with the audit of the Company's financial statements, and reviews of the financial statements included in the Company's quarterly reports for the most recent fiscal year ended June 30, 2005, and fees of approximately $7,500 for those services during the fiscal year ended June 30, 2004.
Audit-Related Fees
Spector and Wong, LLP did not bill us any audit-related fees during our fiscal year ended June 30, 2005.
Tax Fees
Spector and Wong, LLP did not bill us any tax fees during our fiscal year ended June 30, 2005.
Financial Information Systems Design and Implementation Fees
Spector and Wong, LLP did not bill us for any professional services rendered to the Company and its affiliates for the fiscal year ended June 30, 2005, in connection with financial information systems design or implementation, the operation of the Company's information system.
All Other Fees
Spector and Wong, LLP has not billed us any fees for professional services rendered other than those listed above.
Our board of directors has determined that the provision of services by Spector and Wong, LLP, as set forth above, is compatible with maintaining Spector and Wong, LLP's independence.
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PART IV
ITEM 15.
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 31.1 Certification of President pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2 Certification of Secretary/Treasurer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1 Certification of President pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2 Certification of Secretary/Treasurer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Items filed as part of report:
Attached hereto commencing on Page F-i are the financial statements and Supplementary Data required by Item 8 of this Form.
.
SIGNATURES
In accordance with 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 hereunto duly authorized.
August 8, 2005
Western Gaming Corporation
(Registrant)
/s/Frank DeRenzo
Frank DeRenzo
President
In accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
August 8, 2005
/s/Frank DeRenzo
President and Director
Frank DeRenzo
August 8, 2005
/s/Robert Muniz
Director
Robert Muniz
August 8, 2005
/s/DeAnn Moore
DeAnn Moore
Director, Secretary-Treasurer
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WESTERN GAMING CORPORATION
(AUDITED)
FINANCIAL STATEMENTS
June 30, 2005
INDEX
Page
INDEPENDENT AUDITOR'S REPORT
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
F-i
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HAROLD Y. SPECTOR, CPA
SPECTOR & WONG, LLP
80 SOUTH LAKE AVENUE
CAROL S. WONG, CPA
Certified Public Accountants
SUITE 723
(888) 584-5577
PASADENA, CA 91101
FAX (888) 584-8033
spectorwongcpa@aol.com
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and stockholders
of Western Gaming Corporation.
We have audited the accompanying balance sheets of Western Gaming Corporation (a Nevada corporation), as of June 30, 2005 and 2004, and the related statements of operations, changes in stockholders' deficit, and cash flows for the years ended June 30, 2005, 2005 and 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of Western Gaming Corporation as of June 30, 2005 and 2004, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2005, 2004 and 2003 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company's operating losses and working capital deficiency raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/Herold Spector
Spector and Wong, LLP
Pasadena, California
July 20, 2005
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Return to Index to Financial Statements
WESTERN GAMING CORPORATION
BALANCE SHEETS
JUNE 30
ASSETS
Current Assets
Cash and cash equivalents
$ 545
$ 119
TOTAL ASSETS
$ 545
$ 119
Stockholders' Deficit
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding
-
-
Common stock, $0.001 par value, 80,000,000 shares authorized, 6,008,135 shares issued and outstanding
6,008
4,808
Paid-in capital
1,055,231
1,008,431
Accumulated deficit
(1,267,130)
(1,242,504)
(205,891)
(229,265)
Less: Treasury stock, at cost
(3,370)
(3,370)
Total stockholders' deficit
(209,261)
(232,635)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$ 545
$ 119
See Notes to Financial Statements
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Return to Index to Financial Statements
WESTERN GAMING CORPORATION
STATEMENTS OF OPERATIONS
For years ended June 30,
Operating Expenses:
Selling, general and administrative expenses
$ 36,636
$ 19,803
$ 16,981
Total operating expenses
(36,636)
(19,803)
(16,981)
Operating loss
(36,636)
(19,803)
(16,981)
Other income (expenses):
Interest and miscellaneous income
13,360
8,019
Interest expenses
(1,350)
(1,020)
(885)
Total other income (expenses)
12,010
(878)
7,134
Net loss
$ (24,626)
$ (20,590)
$ (9,847)
Basic and diluted net loss per share
$ (0.00)
$ (0.00)
$ (0.00)
Weighted average number of shares
5,391,468
4,808,135
4,808,135
See Notes to Financial Statements
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Return to Index to Financial Statements
WESTERN GAMING CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
For years ended June 30, 2005, 2004 and 2003
Balance at June 30, 2002, retroactively restated
4,808,135
4,808
1,008,431
(1,212,067)
(3,370)
(202,198)
Net loss
(9,847)
(9,847)
Balance at June 30, 2003
4,808,135
4,808
1,008,431
(1,221,914)
(3,370)
(212,198)
Net loss
(20,590)
(20,590)
Balance at June 30, 2004
4,808,135
4,808
1,008,431
(1,242,504)
(3,370)
(232,635)
Excersising of stock options to reduce debt and liabilities
1,200,000
1,200
46,800
48,000
Net loss
(24,626)
(24,626)
Balance at June 30, 2005
6,008,135
$ 6,008
$ 1,055,231
$ (1,267,130)
$ (3,370)
$ (209,261)
See Notes to Financial Statements
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Return to Index to Financial Statements
WESTERN GAMING CORPORATION
STATEMENTS OF CASH FLOWS
For years ended June 30,
Cash Flow from Operating Activities:
Net loss
$ (24,626)
$ (20,590)
$ (9,847)
Adjustments to reconcile net loss to net cash used in operations:
Gain on disposal of impairred investment
(12,931)
Increase (decrease) in:
Accounts payable and accrued expenses
11,052
10,082
(2,727)
Cash flows used in operating activities
(26,505)
(10,508)
(12,574)
Cash Flow from Investing Activities:
Proceeds from disposal of impaired investment
12,931
Cash flows provided by investing activities
12,931
Cash Flow from Financing Activities:
Accounts payable advanced from related party
13,007
Advances from (repayments) to related parties
14,000
(3,000)
1,500
Cash flows provided by (used in) financing activities
14,000
10,007
1,500
Net increase (decrease) in cash
(501)
(11,074)
Cash balance at beginning of year
11,694
Cash balance at end of year
$ 545
$ 119
$ 620
SUPPLEMENTAL DISCLOSURES
Noncash Investing and Financing Activities:
In January 2005, isuance of common stock
from exercising of stock options to reduce:
Notes payable to related parties and accrued expenses
$ 26,020
Accrued compensation
21,980
$ 48,000
See Notes to Financial Statements
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Return to Index to Financial Statements
WESTERN GAMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS
Western Gaming Corporation (the "Company") historically disseminated sports and news information directly to customers nationwide through hand held pagers by utilizing contracted paging services. The Company also utilized independent distributors to provide information to clients within the United States. In April 2001, the Company sold its business to a vendor and has not commenced any operations since then.
On October 14, 2003, the Company changed its name to Western Gaming Corporation.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates.
Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.
Fair Value of Financial Instruments The carrying amounts of the financial instruments have been estimated by management to approximate fair value.
Property and Equipment As of June 30, 2005, 2004 and 2003, the Company did not maintain or control any fixed assets during these years.
Income Taxes Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts.
Stock-based Compensation The Company accounts for stock-based compensation arrangements in accordance with the provisions of Accounting Principles Board Opinion (APB) No. 25, "Accounting for Stock Issued to Employees," and related interpretations. No stock-based employee compensation cost is reflected in net loss for the years ended June 30, 2005, 2004 or 2003 as all options granted had an exercise price equal to or greater than the fair market value of the underlying common stock on the date of grant. The Company is required under SFAS No. 123, as amended by SFAS No. 148, to disclose pro forma information regarding option grants made to its employees based on specified valuation techniques that produce estimated compensation charges. The pro forma information is as follows:
Years ended June 30,
Net loss-as reported
(24,626)
(20,590)
(9,847)
Compensation expense, net of tax
-
-
-
Net loss-pro forma
(24,626)
(20,590)
(9,847)
Basic and diluted net loss per share-as reported
(0.00)
(0.00)
(0.00)
Basic and diluted net loss per share-pro forma
(0.00)
(0.00)
(0.00)
See note 6 for additional information on the assumption used in the SFAS No. 123 charge.
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WESTERN GAMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income (Loss) Per Common Share The Company accounts for income (loss) per share in accordance with SFAS No. 128, "Earnings Per Share." SFAS No. 128 requires that presentation of basic and diluted earnings per share for entities with complex capital structures. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common stock outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted net loss per common share does not differ from basic net loss per common share since potential shares of common stock from the exercise of stock options and warrants are anti-dilutive for all periods presented.
New Accounting Pronouncements: In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 153. This statement addresses the measurement of exchanges of nonmonetary assets. The guidance in APB Opinion No. 29, "Accounting for Nonmonetary Transactions," is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that opinion; however, included certain exceptions to that principle. This statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetrary exchange has commercial substance if the future cash flows of the entity a re expected to change significantly as a result of the exchange. This statement is effective for financial statements for fiscal years beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges incurred during fiscal years beginning after the date of this statement is issued. Management believes the adoption of this statement will have no impact on the financial statements of the Company.
In December 2004, the FASB issued a revision to SFAS No. 123R, "Accounting for Stock Based Compensations." This statement supercedes APB Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. This statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. This statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement does not change the accounting guidance for share based payment transactions with parties other than employees provided in SFAS No. 123. This statement does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans." The Company has not yet determined the impact to its financial statements from the adoption of this statement.
In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment of ARB No. 43, Chapter 4." This statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that ". . . under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges. . . ." This statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not believe the adoption of this statement will have any immediate material impact on the Company.
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WESTERN GAMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - GOING CONCERN
The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company incurred a loss of $24,626 and $20,590 for the years ended June 30, 2005 and 2004, respectively, and as of those dates, had an accumulated deficit of $1,267,130 and $1,242,504, respectively. As of June 30, 2005, the Company's current liabilities exceeded its current assets by $209,261. In the near term, the Company expects operating costs to continue to exceed funds generated from operations. As a result, the Company expects to continue to incur operating losses and may not have enough money to grow its business in the future. The Company can give no assurance that it will achieve profitability or be capable of sustaining profitable operations. As a result, operations in the near future are expected to continue to use working capital.
In April 2001, the Company sold its business and ceased operations. The Company presently has not commenced any operations and does not generate any revenue. The Company converted certain debts into equity through exercising options. The amount of debt converted into equity at June 30, 2005 was $48,000. The Company's continued existence depends on its ability to meet its financing requirements and the success of its future operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 4 - SHORT-TERM NOTES PAYABLE
Short-term notes payable included the following:
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WESTERN GAMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - INCOME TAX
As of June 30, 2005, the Company has a net operating loss carryforwards, of approximately $1.3 million to reduce future taxable income. To the extent not utilized, the carryforwards will begin to expire through 2024. The Company's ability to utilize its net operating loss carryforwards is uncertain and thus a valuation reserve has been provided against the Company's net deferred tax assets.
The net deferred tax assets consist of the following:
As of June 30,
Deferred tax assets:
Net operating loss carryforwards
$ 464,170
$ 455,797
$ 448,797
Less: valuation allowance
(464,170)
(455,797)
(448,797)
Total net deferred tax assets
$ -
$ -
$ -
NOTE 6 - STOCKS OPTIONS
The Company has a Stock Option Plan (the Plan) adopted by the stockholders in April 1989 pursuant to which there are 500,000 shares of common stock reserved for issuance and under which the Company may issue non-statutory, incentive or performance based stock options to officers, directors and employees. The price of the options granted pursuant to the plan shall not be less than 100% of the fair market value of the shares on the date of grant. The options vest immediately and expire after ten years from the date of grant. Prices for options granted to employees who own greater than 10% or more of the Company's stock is at least 110% of the market value at date of grant. At June 30, 2005, 2004 and 2003, no shares have been issued.
Non-plan Options
As of June 30, 2004 and 2003, there were 1,200,000 shares of options outstanding. As of June 30, 2005, all of these options had been exercised.
A summary of the status of stock options issued by the Company as of June 30, 2005, 2004 and 2003 is presented in the following table:
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WESTERN GAMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - NET (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
June 30,
Numerator:
Net loss
$ (24,626)
$ (20,590)
$ (9,847)
Denominator:
Weighted average common shares outstanding
5,391,468
4,808,135
4,808,135
Basic and diluted net loss per share
$ (0.00)
$ (0.00)
$ (0.00)
NOTE 8 - RELATED PARTY TRANSACTIONS
As disclosed in Note 4, the Company had notes payable to related parties in the amounts of $76,500 and $79,500 as of June 30, 2004 and 2003, respectively. The Company also had accounts payable to a related party in the amount of $14,784 and $1,777, respectively, as of those dates.
NOTE 9 - STOCKHOLDERS EQUITY
On October 14, 2003, the Company changed its name to Western Gaming Corporation. The Board of directors approved to increased the authorized shares of common stock to eighty million (80,000,000) and the authorized shares of preferred stock to twenty million (20,000,000). Both have a par value of $0.001 per share. As of June 30, 2004, the Company did not have any preferred stock issued and outstanding. The accompanying financial statements have been retroactively adjusted to reflect the change of par value from $0.01 to $0.001.
NOTE 10 - SEGMENT INFORMATION
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related Information" requires that a publicly traded company must disclose information about its operating segments when it presents a complete set of financial statements. Since the Company had only one segment before April 2001 and has no operations since then; accordingly, detailed information of the reportable segment is not presented.
NOTE 11 - GUARANTEES
The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary indemnifications to purchasers of the Company's businesses or assets; and (ii) certain agreements with the Company's officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising our of their employment relationship.
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WESTERN GAMING CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOTE 11 - GUARANTEES (Continued)
The terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these types of agreements often are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been recorded for these obligations on its balance sheet as of June 30, 2005.
Since the Company is not operating, it does not incur any product warranty.
NOTE 12 - SUBSEQUENT EVENT
On July 21, 2005, the Company's majority of interest was acquired by a foreign engineering firm as part of a post reverse merger.
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