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Angelciti: still losing money

Discussion in 'Casino Industry Discussion' started by mary, Jun 15, 2004.

    Jun 15, 2004
  1. mary

    mary Dormant account

    Omega Ventures has 5% of Angelciti stock, but controls Angelciti because it is special stock with extrra voting rights. "each share of this preferred stock
    can vote in a ratio of 20,000 shares of common stock for each
    share of preferred stock held."

    B) PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the accounts of Omega
    Ventures, Inc. and its majority owned subsidiaries AngelCiti, Worldwide
    and FNC. All significant intercompany accounts and transactions have
    been eliminated in consolidation.



    OMEGA VENTURES, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    MARCH 31, 200

    THREE MONTHS ENDED MARCH 31, 2004

    CASINO REVENUES, NET $ 314,122
    OPERATING EXPENSES
    Amortization and Depreciation 1,400
    Affiliate Commission 41,758
    Bad debts 35,201 Consulting 15,000 Royalty 60,962
    Marketing -- Advertising 13,190
    Legal & Professional fee 53,460 Rent 1,685
    Amortization of license Fee 69,167
    General and Administrative 129,958
    -----------------------
    TOTAL OPERATING EXPENSES 421,781
    ------------------------

    LOSS FROM OPERATIONS (107,659)


    NUMBER OF SHARES
    OUTSTANDING DURING
    THE YEAR -
    BASIC AND DILUTED 24,566,333


    Not paying license fee:

    Recognition of dererred license fee 69,167

    Majority of cash on hand is due to issuing stock:
    Proceeds from issuance of
    common stock, net of offering costs 318,215


    There were no non-cash investing and financing transactions to report for Omega
    for the three months ended March 31, 2004. All transactions listed below refer
    to the Company's majority-owned subsidiary and issuer, AngelCiti:

    As of March 31, 2004, the Company issued 330,731 shares of common stock upon
    exercise of stock options held by software vendor in connection with the
    settlement of accrued royalty payments to that vendor. The exercise price was
    $.035417 per share. The fair value of these transactions was $11,992. (See Note
    9(C))

    During the three months ended March 31, 2004, the Company had a stock
    subscription receivable for 4,823,383 shares having a fair value of $48,291.
    (See Note 9(B))

    Pursuant to SFAS No. 94 "Consolidation of All Majority-Owned
    Subsidiaries", Omega, although it does not have common stock ownership
    exceeding 50% of AngelCiti's outstanding common stock (only 5% control
    through common stock ownership), Omega holds AngelCiti Series A, voting
    preferred stock, that by the stated rights of the voting privileges,
    Omega has voting control.

    Omega's operating focus is online marketing and it operates a website
    known as casinopaycheck.com, which serves as a customer referral
    service for online casinos. The Company has not generated any revenues
    from this business through March 31, 2004.

    REVENUE RECOGNITION

    Following the guidance of Staff Accounting Bulletin No. 104 and the
    AICPA's guidance on revenue recognition for casinos, casino revenue is
    the net win from complete gaming activities, which is the difference
    between gaming wins and losses. Additionally, the value of promotional
    bonus dollars provided to customers is netted with revenues.

    The total amount wagered ("handle") was $11,883,387 for the three
    months ended March 31, 2004. The relationship of net casino revenues to
    handle ("hold percentage") was 2.6% for the three months ended March
    31, 2004.

    A) MONTHLY ROYALTY PERCENTAGE

    Based on the previous month's adjusted monthly net win, the Company is
    subject to a payment equivalent to a percentage of the adjusted monthly
    net win payable to the software licensor, as stipulated in the software
    license agreement. As of March 31, 2004, the Company had accrued
    $21,049 as a royalty payable.

    (B) COMMITMENT FOR MINIMUM ROYALTY PAYMENT

    Pursuant to the terms of the initial agreement, the Company had
    originally been committed to a minimum royalty payment of $10,000 per
    month. In May 2003, the Company entered into an amendment to its
    software license agreement. Under the terms of the amendment, effective
    May 1, 2003, the Company is committed to a minimum monthly royalty
    payment of $20,000 payable in cash as follows: 15% on adjusted net wins
    of $0 - $750,000, 13% on adjusted net wins of $750,001 - $1,500,000,
    and 12% on adjusted net wins exceeding $1,500,000. During the three
    months ended March 31, 2004, the software licensor received 15% of the
    adjusted net win in cash and the remaining amount to make up the
    difference through the simultaneous exercise of vested options (see
    Note 9(C)) and repayment by the Company in shares of common stock. Any
    amounts paid in stock through the exchange of options to the software
    licensor were based on a fixed exercise price of $.035417 per share. As
    of March 31, 2004, the Company issued 330,731 shares of common stock
    having a fair value of $11,992 in connection with this agreement to pay
    accrued royalty fees upon the exercise of these stock options.

    During the three months ended March 31, 2004, the Company incurred a
    royalty expense of $60,962.

    On September 30, 2003, the AngelCiti acquired FNC in exchange for nominal
    consideration. (See Note 2 (A)). At the time of the transaction the sole
    director, officer, and shareholder of FNC was the Company's President. The
    acquisition was accounted for as a combination of entities under common control
    at historical cost (see Note 10).

    In May 2003, the Company's majority owned subsidiary entered into a payment
    processing agreement with Fist National Consulting, Inc. FNC, a Belize
    Corporation. Under the terms of the agreement, FNC provides payment processing
    services to the Company, which include processing transactions for the Company
    related to casino operations, and payment for various corporate expenses that
    are required to be reimbursed. In exchange for receiving these services, no cash
    or non-cash compensation for these services was paid by the Company to FNC since
    FNC considered that the increase in volume for such transactions for its
    operations will provide it valuable exposure to certain of FNC's service
    providers. Ultimately, the increased volume transacted between FNC, and its
    service providers on behalf of the Company would lead to reduced rates for
    future services with these providers for the Company, and FNC believes this will
    serve as fair consideration for this transaction.
     
  2. Jun 15, 2004
  3. mary

    mary Dormant account

    AngelCiti: being sued

    Legal Proceedings

    We are not subject to any legal proceedings. However, AngelCiti, our majority
    owned subsidiary, has been named in connection with the following actions:

    In September of 2003, AngelCiti and its officers and directors were named as
    defendants in the matter known as FCC Enforcement Company successors in interest
    to AMPS Wireless Data vs. AngelCiti Entertainment, Inc., George Gutierrez, Dean
    Ward, et. al. This suit was filed in the Scottsdale Justice Court of the State
    of Arizona in and for the County of Maricopa, and alleged, among other things
    that AngelCiti violated The Telephone Consumer Protection Act of 1991 (the
    "Telephone Consumer Protection Act") by sending certain unsolicited fax
    advertisements to certain parties in violation of the Telephone Consumer
    Protection Act.

    In October of 2003, AngelCiti and its officers and directors were named as
    defendants in the matter known as FCC Enforcement Company successors in interest
    to Crossroads of Life Christian Books and Gifts vs. AngelCiti Entertainment,
    Inc., George Gutierrez, Dean Ward, et. al. This suit was filed in the Peoria
    Justice Court of the State of Arizona in and for the County of Maricopa, and
    alleged, among other things that AngelCiti violated The Telephone Consumer
    Protection Act of 1991 (the "Telephone Consumer Protection Act") by sending
    certain unsolicited fax advertisements to certain parties in violation of the
    Telephone Consumer Protection Act.

    Each case sought unspecified damages. The matters alleged in the aforementioned
    lawsuits relate to Baroda and its activities rather to AngelCiti and its
    activities. AngelCiti's attorneys have filed motions to dismiss these matters,
    as the lawsuits do not allege any wrongdoing on AngelCiti's part. Despite the
    foregoing, we have accrued $12,500 in our financial statements and recorded the
    same as a reserve for settlement payable. As these litigation matters contain
    allegations involving facts attributable to Baroda, Baroda has agreed to
    reimburse us for this expense and all other related expenses associated with
    this litigation.
     
  4. Jun 15, 2004
  5. mary

    mary Dormant account

    AngelCiti separates from Worldwide Holdings: same people, different financial reports

    As of April 15, 2004, we sold George Gutierrez and Dean Ward, AngelCiti's
    executive officers, a total of 14,000 AngelCiti Series A Preferred shares for
    aggregate consideration of $200,000. As of said date, AngelCiti issued to
    Messrs. Gutierrez and Ward an additional 6,000 of its Series A Preferred shares
    in consideration for past services rendered and the return of 1,000,000 common
    shares of Omega, 500,000 of which had been owned by a company controlled by Mr.
    Gutierrez and 500,000 of which had been owned by a company controlled by Mr.
    Ward. Both transactions provide Messrs. Gutierrez and Ward with voting control
    of AngelCiti. While we now maintain a small common stock equity position in
    AngelCiti, AngelCiti is no longer our majority owned subsidiary or controlled by
    us, and its operations will no longer be consolidated with ours.
     
  6. Jun 15, 2004
  7. mary

    mary Dormant account

    Keep in mind that management already had a controlling stak in the company--they had control of Omega Ventures, that had control of AngelCiti.The "double-digit expansion" is not profit.


    Press Release Source: AngelCiti Entertainment, Inc.


    AngelCiti's Double Digit Yearly Gain Continues
    Tuesday June 15, 4:21 pm ET


    PEMBROKE PINES, Fla., June 15, 2004 (PRIMEZONE) -- AngelCiti Entertainment's (OTC BB:AGEL.OB - News) wholly owned subsidiary, Worldwide Management, announced that it had a gross win of more than $809,000 in the first five months of 2004 on a net handle of more than $18 million, continuing AngelCiti's double-digit expansion over 2003.

    ``AngelCiti continues to emphasize expansion of core operations even as we expand into other market areas,'' remarked AngelCiti president George Gutierrez. ``This continued growth, combined with our ongoing developments into online poker software, should increase the company's profitability and make the capital markets take notice of what we consider our undervalued stock price, as evidenced by management's recent acquisition of a controlling stake in the company.''

    The Industry

    A Bear Stearns report for the industry pegs annual revenue at $4.2 billion for 2003, while Christiansen Capital Advisors predicts a slightly more rosy picture pointing to an estimated $4.5 billion in revenue for calendar year 2002, saying 2005 revenue could exceed $10 billion. InformaMedia Group, which tracks electronic gambling predicts that online gaming revenue will even reach $14.5 billion by 2006.

    The Company

    AngelCiti's wholly owned subsidiary Worldwide Management provides gaming software to numerous online casinos including SharkCasino.com, SharkPoker.com and TheHouseWins.com, and currently services casinos in English, Spanish, German, Chinese and Japanese.

    This news release contains forward-looking statements regarding AngelCiti's business strategies and future plans of operations. Forward-looking statements involve known and unknown risk and uncertainties. The company's risks and uncertainties include: intense price competition, economic, political and regulatory uncertainties, the need to raise additional capital for growth and expansion and its reliance on the internet as a means for promoting the software it sublicenses. The forward-looking statements contained in this news release speak only as of the date hereof and AngelCiti disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in AngelCiti's expectations or future events. The representations of net handle and gross net win in this press release are presented as measures of performance for the company that are different from those presented in the income statement in accordance with Regulation G promulgated by the Securities and Exchange Commission and are not to be considered as revenue or a GAAP related financial disclosure criteria.



    Contact:

    AngelCiti Entertainment, Inc.
    Evelyn Fallas
    (800) 908-9574
    This email is not visible to you.


    --------------------------------------------------------------------------------
    Source: AngelCiti Entertainment, Inc.
     
  8. Jun 15, 2004
  9. caruso

    caruso Banned User - repetitive violations of <a href="ht

    Occupation:
    Casino apologist
    Location:
    England
    We wrapped up last year's business very amicably, to the extent that Laura Chacon, one of the under-managers, seeing and slightly misinterpreting an ironic bonus request post I put up at The Pig Post, Emailed me further profuse thanks for my positive summing up and offered me the opportunity to participate in the promo, which I declined. Either way, it seemed everyone was happy.

    Then they locked me out.

    Go figure.
     
  10. Jun 15, 2004
  11. bethug

    bethug Banned User - Winner of the "<a href="http://www.c

    mary thanks for your info, i was going to tell my sister to play there. :notworthy
     
  12. Jun 16, 2004
  13. mary

    mary Dormant account

    In their SEC filings, they reported a casino hold of 2.6%

    I think that's about average for the industry. They're not making money on it.

    The holders of the preferred stock have 20k votes for every share. The holders of the common stock have one vote per share.

    That is not healthy corporate structure.
     

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