-----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, QWUG2E5zN4bEwjJsr2J8w8sDvfC2yx1y33eHbjS5bOKa3m539gCxmVZw7FSwCEYP aCS5oNKvDV2/1kbMO2cgmw== 0001135745-01-500099.txt : 20010814 0001135745-01-500099.hdr.sgml : 20010814 ACCESSION NUMBER: 0001135745-01-500099 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BGI INC CENTRAL INDEX KEY: 0000355590 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 731092118 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10519 FILM NUMBER: 1707210 BUSINESS ADDRESS: STREET 1: 13581 POND SPRINGS RD STREET 2: SUITE 105 CITY: AUSTIN STATE: TX ZIP: 78279 BUSINESS PHONE: 5124900065 MAIL ADDRESS: STREET 1: 11006 METRIC BOULEVARD STREET 2: STE 350 CITY: AUSTIN STATE: TX ZIP: 78758 FORMER COMPANY: FORMER CONFORMED NAME: BINGO & GAMING INTERNATIONAL INC DATE OF NAME CHANGE: 19951120 FORMER COMPANY: FORMER CONFORMED NAME: O PETRO ENERGY CORP DATE OF NAME CHANGE: 19941215 FORMER COMPANY: FORMER CONFORMED NAME: PRIMARY DEVELOPMENT CORP /OK/ DATE OF NAME CHANGE: 19941215 10QSB 1 bgiqsb813.txt BGI 10-QSB U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to __________________ Commission File No. 0-10519 BGI, INC. OKLAHOMA 73-1092118 ------------------------- --------------------- (State or Other Jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 13581 Pond Springs Rd. Suite 105 Austin, Texas 78729 ------------------- (Address of Principal Executive Offices) Issuer's Telephone Number: (512) 335-0065 Indicate by check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. (1) Yes X No (2) Yes X No --- --- --- --- Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-QSB or any amendment to this Form 10-QSB. [ ] Indicated below is the number of shares outstanding of the registrant's common stock as of August 1, 2001: Class Number of Shares Outstanding Common Stock, $.001 Par Value 9,685,165 TABLE OF CONTENTS Page Number Part I: Item 1. Financial Statements 1 --------------------- Item 2. Management's Discussion and Analysis 6 ------------------------------------- Part II: Item 1. Legal Proceedings 7 ----------------- Item 2. Changes in Securities 7 --------------------- Item 3. Defaults Upon Senior Securities 7 ------------------------------- Item 4. Submission of Matters to a Vote of Security Holders 7 --------------------------------------------------- Item 5. Other Information 7 ----------------- Item 6. Exhibits and Reports on Form 8-K 8 -------------------------------- PART I: BGI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS June 30, 2001 December 31, 2000 ------------ -------------- Current assets: Cash $ 149,490 $ 58,124 Accounts receivable - trade, net 150,465 117,505 Inventories 12,970 86,453 Prepaid expenses 2,500 14,099 ------------ -------------- Total current assets 315,425 276,181 ------------ -------------- Property and equipment, at cost - net 546,486 684,340 ------------ -------------- Other assets: Intangible assets - net 36,319 36,121 Deferred financing costs 0 34,484 Deposits 15,190 27,741 ------------ -------------- Total other assets 51,509 98,346 ------------ -------------- Total assets $ 913,420 $1,058,867 ------------ -------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable - trade and accrued expenses $ 227,452 $ 403,352 Current maturities of long-term debt 165,171 200,482 Current maturities of capital lease obligations 338,993 277,567 ------------ -------------- Total current liabilities 731,616 881,401 Long-term debt, less current maturities 20,695 21,814 Capital lease obligations, less current maturities 70,782 190,901 ------------ -------------- Total liabilities 823,093 1,094,116 ------------ -------------- Stockholders' equity: Preferred stock, nonvoting; $.001 par; 10,000,000 shares authorized; no shares issued and outstanding - - Common stock, $.001 par; 70,000,000 shares authorized; 9,685,165 and 9,141,142 issued and outstanding 9,685 9,141 Additional paid-in capital 979,660 936,253 Retained earnings (deficit) (899,018) (980,643) ------------ -------------- Total stockholders' equity 90,327 (35,249) ------------ -------------- Total liabilities and stockholders' equity $ 913,420 $ 1,058,867 ============ ==============
The accompanying notes are an integral part of these financial statements. BGI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended ------------------ ---------------- June 30, June 30, June 30, June 30, 2001 2000 2001 2000 --------------- ------------- ------------- ------------- Revenue: Machine rental $ 599,726 $ - $ 646,645 $ - Phone card sales 99,753 769,924 433,920 1,548,506 Hall rental and concession income 29,676 84,091 96,199 167,175 Machine sales - 10,990 22,500 35,981 Other revenue - 14,254 805 25,691 --------------- ------------- ------------- ------------- Total revenue 729,155 879,259 1,200,069 1,777,353 --------------- ------------- ------------- ------------- Cost of revenue: Phone cards 127,100 297,733 295,614 586,856 Prizes paid 3,378 266,407 113,360 514,365 Hall rental and concession expenses 173 56,901 36,235 95,761 Machines sold - 7,750 27,125 23,830 Total cost of revenue 130,651 628,791 472,334 1,220,812 --------------- ------------- ------------- ------------- Gross margin 598,504 250,468 727,735 556,541 General and administrative expenses 381,953 364,058 617,131 658,580 Operating income (loss) 216,551 (113,590) 110,604 (102,039) Gain on sale of asset 4,602 - 46,165 - Interest expense (43,840) (58,289) (75,144) (127,882) --------------- ------------- ------------- ------------- Income (loss) before federal income tax 177,313 (171,879) 81,625 (229,921) Federal income tax - - - - --------------- ------------- ------------- ------------- Net income (loss) 177,313 (171,879) 81,625 (229,921) Retained earnings (deficit): Beginning (1,076,331) (378,643) (980,643) (320,601) --------------- ------------- ------------- ------------- Ending $(899,018) $ (550,522) $ (899,018) $ (550,522) =============== ============= ============= ============= Basic income (loss) per common share: Income (loss) applicable to common stockholder $ 0.02 $ (0.02) $ 0.01 $ (0.03) =============== ============= ============= ============= Diluted income (loss) per common share: Income (loss) applicable to common stockholder $ 0.02 $ (0.02) $ 0.01 $ (0.03) =============== ============= ============= =============
The accompanying notes are an integral part of these financial statements. BGI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2001 2000 ---------------- --------------- Operating activities: Net income $ 81,625 $ (229,921) Adjustments to reconcile net income to net cash income: Depreciation and amortization 158,780 183,329 Provision for bad debts - - Recovery from bad debts - (62,114) Stock issued for services 43,951 74,099 Deferred financing cost 34,484 29,914 Gain on disposal of property (46,165) - Changes in current assets and liabilities: Accounts receivable (32,961) 46,464 Inventories 73,483 14,553 Prepaid expenses 11,599 (8,878) Deposits 12,551 - Accounts payable - trade and accrued expenses (175,900) 18,913 ---------------- --------------- Cash provided by operating activities 161,447 66,359 ---------------- --------------- Investing activities: Purchase of property and equipment (11,976) (32,837) Increase (decrease) in other assets (10,000) (13,348) Proceeds from sale of equipment 62,000 3,000 ---------------- --------------- Cash provided (used) by investing activities 40,024 (43,185) ---------------- --------------- Financing activities: Payments on long-term debt (51,412) (48,872) Payments on long-term leases (58,693) (77,525) Proceeds from issuance of common stock - 65,000 ---------------- --------------- Cash provided (used) by financing activities (110,105) (61,397) ---------------- --------------- Net increase (decrease) in cash 91,366 (38,223) Cash at beginning of period 58,124 89,636 ---------------- --------------- Cash at end of period $ 149,490 $ 51,413 ================= ============== Supplemental disclosures of cash flow information: Interest paid $ 75,144 $ 101,801 Cash flow from non-cash transfer activities Purchases of fixed assets $ (14,982) Proceeds from long term debt 14,982 $ 0 =================
The accompanying notes are an integral part of these financial statements. BGI, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2001 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation: The financial statements for the six months ended June 30, 2001 and June 30, 2000 are unaudited. They have however, been prepared from the books and records of the Company in accordance with generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission. All adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of financial position and operating results for the interim periods have been reflected. These financial statements should be read in conjunction with the Company's most recent Annual Report on Form 10-KSB, which includes audited financial statements for the year ended December 31, 2000. Reclassifications: Certain prior period amounts have been reclassified to conform with this June 30, 2001 presentation. Going concern: The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. Numerous factors could affect the Company's operating results, including, but not limited to, general economic conditions, competition, and changing technologies. Any significant adverse change in any of these factors could have an adverse effect on the Company's consolidated financial position or results of operations. Further, the Company had losses for the year ended December 31, 2000, and its working capital position deteriorated. At June 30, 2001, current liabilities exceeded current assets by $416,191. In view of these matters, realization of a major portion of the assets in the accompanying balance sheets is dependent upon the Company's success with its operations in the future. Taxes on income: The Company accounts for income taxes under the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than possible changes in the tax laws or rates. The Company provides a valuation allowance against its deferred tax assets to the extent that management estimates that it is not "more likely than not" that such deferred tax assets will be realized. However, the company will use portions of NOL tax benefits in this period to offset income tax expense. BGI, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2001 NOTE 2 - EARNINGS PER SHARE Basic income or loss per common share is computed based on the weighted average number of common shares outstanding during each period. For the periods ended June 30, 2001, diluted income or loss per common share is computed based on the weighted average number of common shares outstanding, after giving effect to the potential issuance of Common Stock on the exercise of options and warrants and the impact of assumed conversions. The following table provides a reconciliation between basic and diluted shares outstanding: - -------
Three Months Ended June 30, Six Months Ended June 30, 2001 2000 2001 2000 --------------- -------------- ---------------- ------------ Weighted average number of common shares used in basic earnings per share 9,574,158 8,981,549 9,486,700 9,073,983 Effect of dilutive securities: Stock Options 881,500 881,500 - Warrants 475,000 - 475,000 - Weighted average number of common shares and dilutive potential common stock used in diluted earnings per share 10,930,658 8,981,549 10,843,200 9,073,983 =============== ============== ================ ============
NOTE 3 - RELATED PARTY During the quarter that ended June 30, 2001, Reid Funderburk, Chairman, CEO and Director, and/or other employees of BGI, Inc., assisted in the organization of and/or invested in certain Donation Station charity center locations. The charity that leases the location contracts with BGI, Inc. for the placement of Donation Station charity machines. Item 2 - Management's Discussion and Analysis The Company is including the following cautionary statement in this Quarterly Report on Form 10-QSB to make applicable and utilize the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding any forward looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical facts. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such statements. The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties, but there can be no assurance that management's expectations, beliefs or projections will result will be realized. Subsequent to December 31, 2000, the Company began converting its phone card machines to a new machine "Donation Station" that accepts donations for selected charities with a free participation in a promotional sweepstakes. The name "Donation Station" is in the process of being changed to "Charity Station". Results of Operations Three Months Ended June 30, 2001 Compared with the Three Months Ended June 30, 2000 Total revenue for the three months ended June 30, 2001, was $729,155 compared to $879,259 for the three months ended June 30, 2000. This 17% decrease resulted from an 87% decline in phone card and machine sales as many phone card machines were being converted to the new Donation Station Machine. Revenues from rental of the Donation Station Machine were $599,726 compared to no rental sales in June 2000. Cost of sales were $130,651 for three months ended June 30, 2001 compared to $628,791 for three months ended June 30, 2000. The 79.6% decrease was due to the conversion of phone card machines to the new Donation Station machine that has less cost of sales. Gross margin for the three months ended June 30, 2001, was $598,504 as compared to $250,468 for the three months ended June 30, 2000. The increase of $348,036 resulted from the new Donation Station Game having a reduced cost of sales. General and administrative expense for the three months ended June 30, 2001 was $381,953 as compared to $364,058 for the three months ended June 30, 2000. The 4.6% increase was due to writeoffs of obsolete inventory of maintenance supplies. The $14,449 decline in interest expense is due to several notes having been paid off. Six Months Ended June 30, 2001 Compared with the Six Months Ended June 30, 2000. Total revenue for the six months ended June 30, 2001, was $1,200,069 compared to $1,777,353 for the six months ended June 30, 2000. This 32.4% decrease was the result of declines in phone card and machine sales and the time necessary to convert the phone card machines to the new Donation Station machine. Revenues from machine rentals of the new Donation Station machine were $646,645 for the six months ended June 30, 2001 compared to no revenues for machine rentals for the six months ended June 30, 2000. Cost of revenues decreased $748,478 or 61.3% from the six months ended June 30, 2001 to $472,334 compared to the six months ended June 30, 2000 of $1,220,812. The decrease is due to the Donation Station machine having less cost of sales. Gross margin increased 30.7% or $171,194 for the six months ended June 30, 2001 to $727,735 compared to June 30, 2000 gross margin of $556,541. The increase was due to the new Donation Station machine having less cost of revenues and the decrease of the number of phone card machines that have been converted to the new machine. General and administrative expenses for the six months ended June 30, 2001, were $617,131 compared to $658,580 for the six months ended June 30, 2000. This decrease was a result of a reduction of salaries and consulting fees. Management has reviewed all business processes and implemented revisions where appropriate. Liquidity Current assets of $315,425 as of June 30, 2001, represented 43.1% of current liabilities of $731,616 as compared to current assets of $276,181 at December 31, 2000, which represented 31.3% of current liabilities of $881,401. The Company's cash position improved for the three months ended June 30, 2001. Inventory decreased because of a reduction in the supplies and costs related to phone cards. As of June 30, 2001, the Company is current on payments of accounts payable, notes and leases. PART II Item 1. Legal Proceedings. None 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. Thomas Murphy, President, resigned effective 7/31/2001. Robert Chappell, Secretary/Treasurer, resigned effective May 31, 2001. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibit Annual Report on Form 10-KSB for the year ended December 31, filed April 15, 2000** **This document and related exhibits have been previously filed with the Securities and Exchange Commission and by this reference are incorporated herein. SIGNATURES Pursuant to the requirements of Section 13 or 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. BGI, INC. By: /s/ Reid Funderburk ------------------- Reid Funderburk, CEO Date: 8/12/01 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Date: 8/12/01 By: /s/ Reid Funderburk ------------------- Reid Funderburk, Chairman, C.E.O. & Director Date: 8/12/01 By: /s/ Edward Reckdenwald ---------------------- Edward Reckdenwald, Secretary -----END PRIVACY-ENHANCED MESSAGE-----