UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2003
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File Number: 33-5516-LA
Beeper Plus, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 88-0219239
- ------------------------ ------------------------------------
(State of Incorporation) (IRS Employer Identification Number)
1515 Tropicana Ave., #775 Las Vegas, NV 89119
- ------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (702) 795-3601
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
----------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 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.
Yes No X
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (subsection 229.405 of this chapter) is not contained herein,
and will not be contained herein, and will not 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-K. [ ]
As of November 14, 2003, the aggregate market value of the voting and non-voting
common equity held by non-affiliates was approximately $93,600
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
As of June 30, 2003 4,808,135 $.01 par value
Beeper Plus, Inc.
Form 10-K
June 30, 2003
TABLE OF CONTENTS
Page
PART I
ITEM 1. Business.......................................................... 1
ITEM 2. Properties........................................................ 2
ITEM 3. Legal Proceedings................................................. 2
ITEM 4. Submission of Matters to a Vote of Security Holders............... 2
PART II
ITEM 5. Market for the Registrant's Common Equity and Related
Stockholder Matters............................................. 3
ITEM 6. Selected Financial Data........................................... 3
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................. 4
ITEM 7A. Quantitative and Qualitative Disclosure about Market Risk......... 6
ITEM 8. Financial Statements and Supplementary Data....................... 6
ITEM 9. Changes In and Disagreements with Accountants
On Accounting and Financial Disclosure.......................... 6
ITEM 9A. Controls and Procedures........................................... 6
PART III
ITEM 10. Directors and Executive Officers of the Registrant................ 7
ITEM 11. Executive Compensation............................................ 7
ITEM 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters........................ 8
ITEM 13. Certain Relationships and Related Transactions.................... 9
ITEM 14. Principal Accounting Fees and Services............................ 9
PART IV
ITEM 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.. 9
ii
Forward-Looking Information-General
This report on Form 10-K contains forward-looking statements that involve risks
and uncertainties. Western Gaming Corporation's actual results may differ
significantly from the results discussed in the forward-looking statements.
This report contains a number of forward-looking statements, which reflect
Western Gaming Corportaion's current views with respect to future events and
financial performance including statements regarding Western Gaming
Corporation's projections, and business endevours. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or those
anticipated. In this report, the words "anticipates", "believes", "expects",
"intends", "future", "plans", "targets" and similar expressions identify
forward-looking statements. Readers are cautioned to not place undue reliance
on the forward-looking statements contained herein, which speak only as of the
date hereof Western Gaming Corporation undertakes no obligation to publicly
revise these forward-looking statements, to reflect events or circumstances that
may arise after the date hereof.
Additionally, these statements are based on certain assumptions that my prove to
be erroneous and are subject to certain risks including, but not limited to,
Western Gaming Corporation's dependence on limited cash resources, and its
dependence on certain key personnel within Western Gaming Corporation.
Accordingly, actual results may differ, possibly materially, from the
predictions contained herein.
PART I
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, #775, 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
1
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 third party trademark rights.
Employees
As of June 30, 2003, 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 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. PROPERTIES
We own no real property and we currently utilize office space contributed by Mr.
Frank DeRenzo, one of our directors, 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. 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
2
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Our Common Stock, par value $.001, currently trades in the NASD Pink Sheets.
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,
2003, there were approximately 80,000 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 first quarter ending September
30, 2001, through June 30, 2003, and the interim period ending September 30,
2003, was as follows:
Bid Price Asked Price
High Low High Low
---- --- ---- ---
9-30-2001 First Quarter .02 .01 .04 .02
12-31-2001 Second Quarter .02 .01 .04 .02
3-31-2002 Third Quarter .02 .01 .04 .02
6-30-2002 Fourth Quarter .01 .004 .03 .02
9-30-2002 First Quarter .01 .004 .03 .02
12-31-2002 Second Quarter .05 .02 .05 .02
3-31-2003 Third Quarter .04 .02 .04 .02
6-30-2003 Fourth Quarter .12 .04 .12 .04
9-30-2003 First Quarter .04 .04 .04 .04
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, 2003, the approximate number of holders of record of our $.001 par
value Common Stock was 258.
ITEM 6. SELECTED FINANCIAL DATA
Year ended June 30
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Results of Operations Data
Operating Revenue $ 0 $ 0 $ 594,470 $ 755,511 $ 828,331
Net Income (Loss) (9,847) (12,153) 41,282 (237,650) (290,173)
Net Income (Loss)
Per Common Share Outstanding (.00) (.00) .01 (.06) (.07)
Balance Sheet Data
Total Assets 620 11,694 215,034 233,460 228,477
Total Liabilities 212,665 213,892 405,079 466,196 349,560
Stockholders' Equity (deficit) (212,045) (202,198) (190,045) (232,736) (121,083)
Long-term Debt $ 0 $ 0 $ 0 $ 0 $ 0
3
We have not paid any dividends on its stock.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations for the fiscal year ended June 30, 2003 compared to fiscal
year ended June 30, 2002
Revenues
We had revenues of $0 for the fiscal year ended June 30, 2003, as compared to $0
for the fiscal year ended June 30, 2002. Our Statement of Operations reflects a
net loss of $9,847for the fiscal year ended June 30, 2003, compared to net
income of $12,153 for the fiscal year ended June 30, 2002.
For the fiscal year ended June 30, 2003, 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 personnel and related
costs and administrative expenses including rent, utilities and postage. General
and administrative expenses have decreased from $26,320 for the fiscal year
ended June 30, 2002, to $16,981 for the fiscal year ended June 30, 2003. No
salaries or wages were paid during the fiscal period.
Liquidity and Capital Resources
We had a working capital deficit of $212,045 at June 30, 2003, compared to a
working capital deficit of $202,198 at June 30, 2002. For the fiscal year ended
June 30, 2003, cash used in operating activities was $12,574, as compared to
$28,809 for the fiscal year ended June 30, 2002. For the fiscal year ended June
30, 2003, investing activities provided $0 as compared to providing $206,156 for
the fiscal year ended June 30, 2002. For the fiscal year ended June 30, 2003,
financing activities provided $1,500 primarily from an advance by a related
party. For the fiscal year ended June 30, 2002, financing activities used
173,431 primarily from the retirement of a line of credit or approximately
$160,000. Net cash decreased by $11,074 for the fiscal year ended June 30, 2003
as compared to an increase of $3,916 for the fiscal year ended June 30, 2002.
During the year ended June 30, 2003, 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, unsecured, non-interest bearing, due on demand
and an open term, $55,000 Note Payable.
We generated $0 revenues for fiscal year ended June 30, 2003 and a net loss
of $9,847 for the fiscal year ended June 30, 2003, resulting in an accumulated
deficit of $1,221,914 at June 30, 2003. 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.
4
Results of Operations for the fiscal year ended June 30, 2002 compared to fiscal
year ended June 30, 2001
Revenues
Revenues decreased to $0 for the fiscal year ended June 30, 2002, from $594,470
for the fiscal year ended June 30, 2001, representing a decline in revenue of
100% in fiscal 2002. Our Statement of Operations reflects a net loss of $12,153
for the fiscal year ended June 30, 2002, compared to net income of $41,282 for
the fiscal year ended June 30, 2001.
The drop in revenues from 2001 to 2002 was primarily due to the sale of our
Sports Page and Score Page business in April of 2001, which represented our
primary source of revenues.
We are in the process of identifying and developing new business ventures and/or
business partners through acquisitions or mergers.
Operating Cost and Expenses
Cost of revenue has decreased from $239,756 for the fiscal year ended June 30,
2001, compared to $0 for the fiscal year ended June 30, 2002. The decrease in
costs and expenses was primarily due to the sale of our business operations.
General and Administrative Expenses
General and administrative expenses consists primarily of personnel and related
costs and administrative expenses including rent, utilities and postage, as well
as marketing. General and administrative expenses have decreased from $508,387
for the fiscal year ended June 30, 2001 to $26,320 for the fiscal year ended
June 30, 2002. No salaries or wages were paid during the fiscal period.
Liquidity and Capital Resources
We had a working capital deficit of $202,198 at June 30, 2002, compared to a
working capital deficit of $190,045 at June 30, 2001. For the fiscal year ended
June 30, 2002, cash used in operating activities was $28,809, as compared to
$183,568 for the fiscal year ended June 30, 2001. For the fiscal year ended
June 30, 2002, investing activities provided $206,156 as compared to providing
$80,626 for the fiscal year ended June 30, 2001. For the fiscal year ended June
30, 2002, financing activities used $173,431 primarily from the retirement of a
line of credit or approximately $160,000. Net cash increased by $3,916 for the
fiscal year ended June 30, 2002 as compared to a decrease of $27,442 for the
fiscal year ended June 30, 2001.
At June 30, 2000, we secured a line of credit with Community Bank of Nevada in
the amount of $160,000, with a maturity date of August 14, 2001, secured by the
certificate of deposit in the amount of $160,000. The line of credit carried an
interest rate of 2.00% over the certificate of deposit rate (8.68% at June 30,
2001), matured on August 14, 2001, and required monthly interest payments. As
of June 30, 2001, outstanding borrowings against this line of credit was
$159,931. The line of credit was closed and the proceeds from the certificate
of deposit were used to pay down the line of credit as of August 13, 2001.
5
During the year ended June 30, 2002, we had short-term payables of, a $7,000
Note, unsecured, at an interest rate of 12% per annum, a $16,000 Note,
unsecured, non-interest bearing, due on demand and an open term, $55,000 Note
Payable.
We generated $0 revenues for fiscal year ended June 30, 2002 and a net loss of
$12,153 for the fiscal year ended June 30, 2002, resulting in an accumulated
deficit of $1,212,067 at June 30, 2002. 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Financial Statements commencing on page F-1.
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,
2002 and June 30, 2003.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls & 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.
6
PART III
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 67 President and Director
Robert Muniz 50 Secretary, Treasurer and Director
DeAnn Moore 32 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 1987 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/Treasurer 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.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the total compensation we paid for our fiscal
year ending June 30, 2003, to each of our executive officers. During the fiscal
years ending June 30, 2003, 2002, and 2001, 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.
7
Annual Compensation Long Term
Name Year Ended June 30 Compensation
Restricted
2003 2002 2001 Stock Awards (#)
---- ---- ---- ----------------
Frank H. DeRenzo $0 $0 $30,000
Director/President
Robert Muniz $0 $0 $0
Director/Secretary-Treasurer
DeAnn Moore $0 $0 $25,000
Director
OPTION GRANTS IN FISCAL YEAR 2003
We did not issue any option grants in the fiscal year 2003.
Our Employee Stock Option Plan was previously extended to 2010. Currently no
options have been issued under the Employee Stock Option Plan.
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 2,467,102 51.3%
1515 E. Tropicana Ave., #775
Las Vegas, NV 89119
Robert Muniz 0 0%
1515 E. Tropicana Ave., #775
Las Vegas, NV 89119
DeAnn Moore 1,600 .0003%
1515 E. Tropicana Ave., #775
Las Vegas, NV 89119
Officers and Directors, and 5% 2,468,702 51.3003%
shareholders as a group
(3 in number)
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.
8
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, 2003, 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. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended June 30, 2003, we did not enter into any
transactions with related parties.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
Spector and Wong, LLP billed us an aggregate of approximately $7,600 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, 2003,
and fees of approximately $3,250 for those services during the fiscal year ended
June 30, 2002.
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, 2003, 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.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Items filed as part of report:
Attached hereto commencing on Page F-1 are the financial statements and
Supplementary Data required by Item 8 of this Form.
9
(b) Reports on Form 8-K
We filed a Report on Form 8-K on July 15, 2003, announcing that we had filed
with the Nevada Secretary of State, a Certificate of Amendment to Articles of
Incorporation for Nevada Profit Corporations to: 1. Change the name of the
Corporation from Beeper Plus, Inc. to Western Gaming Corporation. 2. Change
the aggregate number of authorized common stock the Company has authority to
issue from ten million (10,000,000) $.01 par value shares to eighty million
(80,000,000) $.001 par value shares of common stock. 3. Give the Company
authority to issue an aggregate of twenty million (20,000,000) $.001 par value
shares of preferred stock.
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.
December 8, 2003
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
----------- -------------------
December 8, 2003 /s/Frank DeRenzo President and Director
----------------
Frank DeRenzo
December 8, 2003 /s/Robert Muniz Director
----------------
Robert Muniz
December 8, 2003 /s/DeAnn Moore Director, Secretary-Treasurer
---------------
DeAnn Moore
10
HAROLD Y. SPECTOR, CPA SPCETOR & WONG, LLP 80 SOUTH LAKE AVENUE
CAROL S. WONG, CPA Certified Public Accounants SUITE 723
(888) 584-5577 PASADENA, CA 91101
FAX (888) 584-8033
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
(FKA Beeper Plus, Inc., a Nevada corporation), as of June 30, 2003 and 2002, and
the related statements of operations, changes in stockholders' deficit, and cash
flows for the years ended June 30, 2003, 2002 and 2001. 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 generally accepted
in the United States of America. 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
(FKA Beeper Plus, Inc.) as of June 30, 2003 and 2002, and the results of its
operations and its cash flows for the years ended June 30, 2003, 2002 and 2001
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.
Spector and Wong, LLP
Pasadena, California
September 26, 2003
F-1
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
Balance Sheets
As of June 30
_____________________
ASSETS 2003 2002
____________________________________________________________________________
Current Assets
Cash $ 620 $ 11,694
---------- ----------
TOTAL ASSETS $ 620 $ 11,694
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses $ 32,682 $ 35,409
Accrued compensation and related taxes 100,483 100,483
Short-term Notes payable 79,500 78,000
---------- ----------
Total current liabilities 212,665 213,892
---------- ----------
Stockholders' Deficit
Common Stock, $0.01 par value, authorized
10,000,000 shares, issued and outstanding
4,808,135 shares shares 48,081 48,081
Paid-in capital 965,158 965,158
Accumulated deficit (1,221,914) (1,212,067)
---------- ----------
(208,675 (198,828)
Less: Treasury stock, at cost (3,370) (3,370)
---------- ----------
Total stockholders' deficit (212,045) (202,198)
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 620 $ 11,694
========== ==========
See Notes to Financial Statements
F-2
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
Statements of Operations
For the years ended June 30, 2003 2002 2001
____________________________________________________________________________
Sales $ - $ - $ 594,470
Cost of Sales - - 239,756
--------- --------- ---------
Gross Profit - - 354,714
--------- --------- ---------
Opearting Expenses:
General, general and
administrative expenses 16,981 26,320 508,387
Write-off intangible assets - - 7,800
--------- --------- ----------
16,981 26,320 516,187
--------- --------- ----------
Operating (loss) (16,981) (26,320) (161,473)
--------- --------- ----------
Other income (expenses):
Interest and miscellaneous income 8,019 16,592 40,117
Gain on disposal of business - - 176,431
Interest Expenses (885) (2,425) (13,793)
---------- --------- ----------
7,134 14,167 202,755
---------- --------- ----------
Net income (loss) $ (9,847) $ (12,153) $ 41,282
========== ========= ==========
Basic and diluted net income (loss)
per share $ (0.00) $ (0.00) $ 0.01
========= ========= ==========
Weighted average number of shares 4,808,135 4,808,135 4,808,135
See Notes to Financial Statements
F-3
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For years ended June 30, 2003, 2002 and 2001
______________________________________________________________________________________________________________
Common Stock Paid-in Accumulated Treasury
________________
Shares Amount Capital Deficit Stock Total
______________________________________________________________________________________________________________
Balance at June 30, 2000 4,288,000 47,880 963,951 (1,241,196) (3,370) (232,735)
Stock issued for employee
compensation 20,135 201 1,207 - - 1,408
Net income - - - 41,282 - 41,282
---------------------------------------------------------------------------
Balance at June 30, 2001 4,308,135 $ 48,081 $ 965,158 $(1,199,914) $ (3,370) $ (190,045)
Net (loss) - - - (12,153) - (12,153)
---------------------------------------------------------------------------
Balance at June 30, 2002 4,308,135 $ 48,081 $ 965,158 $(1,212,067) $ (3,370) $ (202,198)
Net (loss) - - - (9,847) - (9,847)
---------------------------------------------------------------------------
Balance at June 30, 2003 4,308,135 $ 48,081 $ 965,158 $(1,221,914) $ (3,370) $ (212,045)
===========================================================================
See Notes to Financial Statements
F-4
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
STATEMENT OF CASH FLOWS
For years ended June 30 2002 2002 2001
____________________________________________________________________________________________
Cash Flow from Operating Activities:
Net income (loss) $ (9,847) $ (12,153) $ 41,282
Adjustments to reconcile net income (loss)
to net cash (used in) operations:
Depreciation and amortization - - 4,819
Write-off intangible assets - - 7,800
Miscellaneous noncash adjustment - - (52)
Gain on disposal of business - - (176,431)
Decrease in:
Accounts receivable, net - - 7,844
Prepaids and other assets - 1,100 8,328
Increase (decrease) in:
Accounts payable and accrued expenses (2,727) (17,756) (38,587)
Accrued compensation and related expenses - - 15,176
Deferred revenue - - (53,747)
--------------------------------------------
Net cash (used in) operating activities (12,574) (28,809) (183,568)
--------------------------------------------
Cash Flow from Investing Activities:
Proceeds from closing certificate of deposit - 160,000 -
Purchase of property and equipment - - (3,218)
Proceeds from sales of business - 46,156 83,844
--------------------------------------------
Net cash provided by investing activities - 206,156 80,626
--------------------------------------------
Cash Flow from Financing Activities:
Advances from (repayments to) related parties 1,500 (13,500) 75,500
(Repayments) on line of credit - (159,931) -
--------------------------------------------
Net cash provided by (used in)
financing activities 1,500 (173,431) 75,500
--------------------------------------------
Net increase (decrease) in cash (11,074) 3,916 (27,442)
Cash balance at beginning of year 11,694 7,778 35,220
--------------------------------------------
Cash balance at end of year $ 620 $ 11,694 $ 7,778
============================================
Supplemental Disclosures of Cash Flow
Information
Interest Paid $ - $ 5,343 $ 12,128
Supplemental Schedules of Noncash Investing
and Financing Activities
Issued stock for a liability $ - $ - $ 1,409
See Notes to Financial Statements
F-5
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
NOTE 1 - NATURE OF BUSINESS
Western Gaming Corporation (formally known as Beeper Plus, Inc., the "Company")
was historically disseminated sports and news information directly to customers
nationwide through band 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 did not commence any operations since then.
On July 15, 2003, the Company changed its name to Western Gaming Corporation.
The Company is currently seeking to form a joint venture to own and operate a
40-room hotel and approximately 80 acres of beachfront property in LaPaz of
Mexico. The project is still open.
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.
REVENUE RECOGNITION Revenue is recognized at the point of sales or as services
have been performed and are billable, provided that no significant obligations
remain and collectibility is reasonably assured. Subscription revenue received
in advance is recorded as deferred income and recognized as income on a
straight-line basis over the life of the subscription.
The Company adopted Staff Accounting Bulletin No. 101, "Revenue Recognition
in Financial Statements" ("SAB 101") in fourth quarter of 2000. The adoption of
SAB 101 did not have a material impact on the Company's operating results or
financial positions.
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 Property and equipment are valued at cost. Maintenance
and repair costs are charged to expenses as incurred. Depreciation is computed
on the straight-line method based on the estimated useful lives of the assets,
generally 5 to 7 years. Depreciation expense for year ended June 30, 2001 was
$4,019. There was no depreciation expense for fiscal year 2003 and 2002 since
the Company did not maintain or control any fixed assets during these years.
IMPAIRMANT OF LONG-LIVED ASSETS Long-lived assets and certain identifiable
intangible assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of such
assets may not be recoverable. Determination of recoverability is based on an
estimate of undiscounted future cash flows resulting from the use of the asset
and its eventual disposition. Measurement of an impairment loss for long-lived
assets and certain identifiable intangible assets that management expects to
hold and use is based on the fair value of the asset.
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.
F-6
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
STOCK-BASED COMPENSATION The Company accounts for stock-based compensation
arrangements in accordance with the provisions of Accounting Principles Board
Opinion (APO) No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. No stock-based employee compensation cost is reflected in net
income (loss) for the years ended June 30, 2003, 2002 or 2001 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, 2003 2002 2001
____________________________________________________________________________________________
Net income (loss)-as reported $ (9,847) $ (12,153) $ 41,282
Compensation expense, net of tax - - (1,000)
--------------------------------
Net income (loss)-pro forma (9,847) $ (12,153) $ 40,532
- --------------------------------------------------------------------------------------------
Basic and diluted net income (loss) per share-as reported $ (0.00) $ (0.00) $ 0.01
- --------------------------------------------------------------------------------------------
Basic and diluted net income (loaa) per share-pro forma $ (0.00) $ (0.00) $ 0.01
- --------------------------------------------------------------------------------------------
See note 7 for additional information on the assumption used in the SFAS No.
123 charge.
ADVERTISING COSTS All advertising costs are expensed as incurred. Advertising
expense for the year ended June 30, 2001 was $10,827. There were no advertising
costs for the years ended June 30, 2003 or 2002.
DERIVATIVES In June 1998, the Financial Accounting Standards Board (FASB)
issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", as amended by SFAS No. 138, which was issued in June 2000. SFAS
No. 133 establishes accounting and reporting standards for derivative
instruments. The Company currently does not use derivative financial products
for hedging or speculative purposes and as a result, does not anticipate any
impact on the Company's financial statements.
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 reflects 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. Shares excluded from diluted income (loss) per share
totalled 1,200,000 for years ended June 30, 2003, 2002 and 2001.
RECENT ACCOUNTING PRONOUNCEMENTS In November 2002, the EITF reached a consensus
on Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables." Issue
00-21 provides guidance on how to account for arrangements that involve the
delivery or performance of multiple products, services and/or rights to use
assets. The provisions of Issue 00-21 will apply to revenue arrangements
entered into fiscal periods beginning after June 15, 2003. The Company
currently does not generate any revenue and as a result, does not anticipate
any impact on the Company's financial statements.
F-7
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees Including Indirect
Guarantees of Indebtedness of Others." Interpretation 45 requires that a
liability be recorded in the guarantor's balance sheet upon issuance of a
guarantee. In addition, Interpretation 45 requires disclosures about the
guarantees that an entity has issued, including a roll forward of the entity's
product warranty liabilities. The Company will apply the recognition provisions
of Interpretation 45 prospectively to guarantees issued after December 31, 2002.
The Company is currently in the process of evaluating the potential impact that
the adoption of Interpretation 45 will have on its financial statements.
On December 31, 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS No.
123, "Accounting for Stock-Based Compensation," to provide alternative methods
of transition to SFAS No. 123's fair value method of accounting for stock-based
employee compensation. SFAS No. 148 also amends the disclosure provisions of
SFAS No. 123 and APB Opinion No. 28, "Interim Financial Reporting," to require
disclosure in the summary of significant accounting policies of the effects of
an entity's accounting policy with respect to stock-based employee compensation
on reported net income and earnings per share in annual and interim financial
statements. While SFAS No. 148 does not amend SFAS No. 123 to require companies
to account for employee stock options using the fair value method, the
disclosure provisions of SFAS No. 148 are applicable to all companies with
stock-based employee compensation, regardless of whether they account for that
compensation using the fair value method of SFAS No. 123 or the intrinsic value
method of APB Opinion 25.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities," an interpretation of Accounting Research Bulletin
No. 51, "Consolidated Financial Statements." Interpretation 46 establishes
accounting guidance for consolidation of variable interest entities that
function to support the activities of the primary beneficiary. Interpretation
46 applies to any business enterprise, both public and private, that has a
controlling interest, contractual relationship or other business relationship
with a variable interest entity. The Company believes it has no investment in
or contractual relationship or other business relationship with a variable
interest entity and therefore the adoption did not have any impact on the
Company's financial position or results of operations. However, if the Company
enters into any such arrangement with a variable interest entity in the future,
the Company's financial position or results of operations may be adversely
impacted.
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," which is generally effective for
contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. SFAS No. 149 clarifies under what
circumstances a contract with an initial net investment meets the characteristic
of a derivative as discussed in SFAS No. 133, clarifies when a derivative
contains a financing component, amends the definition of an "underlying" to
conform it to the language used in FASB Interpretation No. 45, "Guarantor
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" and amends certain other existing
pronouncements. The Company does not have any derivative financial instruments.
The Company does not anticipate that the adoption of SFAS No. 149 will have an
impact on its balance sheet or statements of operations and cash flows.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This Statement
requires that certain instruments that were previously classified as equity on
the Company's statement of financial position now be classified as liabilities.
The Statement is effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. The Company currently has no
instruments impacted by the adoption of this statement and therefore the
adoption did not have an effect on the Company's financial position, results
of operations or cash flows.
F-8
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
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 $9,847 and $12,153 for the year ended June 30, 2003 and 2002, respectively,
and as of those dates, had an accumulated deficit of $1,221,914 and 1,212,067,
respectively. As of June 30, 2003, the Company's current liabilities exceeded
its current assets by $212,045. 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 does not commence any operations and does not generate any revenue.
The Company is negotiating to convert certain debts into equity; none was
converted through to date. The Company 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:
June 30, 2003 2002
___________________________________________________________________________
a.) Notes payable to an officer,
interest at 12% per annum, due
on demand. Unsecured $ 8,500 $ 7,000
b.) Notes payable to a shareholder,
non-interest bearing; due on
demand. Unsecured 16,000 16,000
c.) Notes Payable to a related party.
Terms are open. 55,000 55,000
--------- ---------
$ 79,500 $ 78,000
========= =========
NOTE 5 - INCOME TAX
As of June 30, 2003, the Company has net operating loss carryforwards,
approximately of $1.3 million to reduce future taxable income. To the extent
not utilized, the carryforwards will begin to expire through 2023. 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: 2003 2002 2001
___________________________________________________________________________
Deferred tax assets
Net operating loss carryforwards $ 448,797 $ 445,449 $ 441,362
Less: valuation allowance (448,797) (445,449) (441,362)
------------------------------------
Total net deferred tax assets $ - $ - $ -
====================================
F-9
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
NOTE 6 - SALES OF BUSINESS
On April 1, 2001, the Company agreed to sell its pager business known as Sport
Page to a vendor ("BeepMe") for a cash price of $130,000. The selling price
includes all customers, software, computers, and equipment directly related to
the production and broadcast of The Sports Page and The Score Page. BeepMe will
assume all the direct vendors, supplies, and distributors related to the Sports
Page and Score Page as of April 1, 2001. BeepMe will also assume the needed
employees and related employee expenses, will use the Company office, and will
be responsible for its telephone and utility expenses.
Net gain recognized on this sale was as follows:
Total selling price $ 130,000
Add: Liabilities assumed at its book value
Deferred revenue 58,050
Less: Assets solt at its book value
Property and equipment (11,619)
---------
Gain on sales of business $ 176,431
=========
NOTE 7 - STOCKS OPTIONS
Employee Stock Option Plan
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, 2003,
2002 and 2001, no shares have been issued.
Non-plan Options
During the year ended June 30, 2001, the Company granted 100,000 non-plan
options to current directors and employees. The options were granted with an
exercise price of $0.04 per share which was the market price on the date of
grant. The options vested immediately and began to expire in 2010. There was
no option granted during the years ended June 30, 2003 and 2002. As of June 30,
2003, 2002 and 2001, there were 1,200,000 shares of options outstanding. None
of these options have been exercise to date.
A summary of the status of stock options issued by the Company as of June 30,
2003, 2002 and 2001 is presented in the following table:
F-10
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
NOTE 7 - STOCK OPTIONS (CONTINUED)
2002 2002 2001
________________________________________________________________
Weighted Weighted Weighted
Number Average Number Average Number Average
of Exercise of Exercise of Exercise
Options Price Options Price Options Price
________________________________________________________________
Outstanding at beginning of Year 1,200,000 $ 0.04 1,200,000 $ 0,04 1,200,000 $ 0.04
Granted - - - - 100,000 0.04
Cancelled - - - - (100,000) 0.04
--------- ------ --------- ------ --------- -----
Outstanding at end of Year 1,200,000 $ 0.04 1,200,000 $ 0.04 1,200,000 $ 0.04
========= ====== ========= ====== ========= =====
Exercisable at end of Year 1,200,000 $ 0.04 1,200,000 $ 0.04 1,200,000 $ 0.04
========= ====== ========= ====== ========= =====
The following table sets forth additional information about stock options
outstanding at June 30, 2003:
Weighted
Average Weighted
Remaining Average
Exercise Options Contractual Exercise Options
Price Outstanding Life Price Exercisable
_______________________________________________________________________
$ 0.04 1,200,000 7.05 years $ 0.04 1,200,000
In accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," the
Company is required to present pro forma information regarding its net loss and
net loss per share if the Company had accounted for its employee stock options,
granted subsequent to June 30, 1995 using the fair value method of accounting.
The fair value of the options granted in fiscal 2003, 2002, and 2001 has been
estimated at the date of grant using the Black-Scholes option pricing model with
the following weighted average assumptions:
FY2003 FY2002 FY2001
__________________________
Weighted average fair value per option granted $ 0.12 $ 0.01 $ 0.01
Risk-free interest rate 1.29% 2.50% 2.50%
Expected dividend yield 0.00% 0.00% 0.00%
Expected lives 7.00 8.00 9.00
Expected volatility 7.62 2.75 4.72
The Black-Scholes option pricing model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models such as the Black-Scholes
option pricing model require the input of highly subjective assumptions,
including the expected stock price volatility. Because the Company's options
have characteristics significantly difference from those of trade options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in the opinion of management, the existing models do not
necessarily provide a reliable single measure of the fair value of its options.
F-11
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
NOTE 8 - NET INCOME (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
2003 2002 2001
_________________________________
Numerator:
Net income (loss) $ (9,847) $ (12,153) $ 41,282
Denominator:
Weighted average common shares outstanding 4,808,135 4,808,135 4,808,135
Basic and diluted net income (loss)
per share $ (0.00) $ (0.00) $ 0.01
NOTE 9 - RELATED PARTY TRANSACTIONS
As disclosed in Note 4, the Company had notes payable to related parties in the
amounts of $79,500 and $78,000 as of June 30, 2003 and 2002, respectively.
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 has 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.
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,
2003.
Since the Company is not operating, it does not incur any product warranty.
F-12
WESTERN GAMING CORPORATION
(FKA BEEPER PLUS, INC.)
NOTES TO FINANCIAL STATEMENTS
________________________________________________________________________________
NOTE 12 - SUBSEQUENT EVENTS
On July 15, 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, 2003, the Company did not have any preferred stock
issued and outstanding.
The retroactive restatement of the Stockholders' Deficit section will be as
follows:
June 30,
2003 2002
___________________________________________________________________________
Stockholders' Deficit
Common stock, $0.001 par value; 80,000,000
shares authorized; issued and outstanding
4,808,135 shares $ 4,808 $ 4,808
Paid-in capital 1,008,431 1,008,431
Accumulated deficit (1,221,914) (1,212,067)
(208,675) (198,828)
Less: treasury stock, at cost (3,370) (3,370)
Total stockholders' deficit $ (212,045) $ (202,198)
F-13