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.
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.
