You Wrote:
I've gone back and re-read the consultant's report and the recent press releases andI see nothing about the schedule for shipping subsequent batches of machines. I do see statements that 1,300 machines are to be installed by end of 1998. I also see that a contract has been executed for the first 200 machines, but contracts for additional machines are only "contemplated," not executed. Did I miss something?
I Found this in the 08/26/97 release
NorAm's responsibility for setting up the Lottery will include the
selection of all sales locations, hiring of local personnel to carry out the
administration of the sales and collection of the funds and to establish a
channel of communication between the State Government and the Lottery.
Under the agreement, NorAm will initially install approximately 200 state
of the art, video lottery terminals throughout the major cities in Cojedes.
Noram also plans to set up Lottery offices in San Carlos, Cojedes, to
accommodate the administration of the Lottery.
NorAm expects annual gross revenues from Lottery sales to top $10 Million
U.S., with net earnings expected to be $2.5 million annually, for the Joint
Venture Partnership.
George C. Zilba, C.E.O. of NorAm also announced that as a result of the
successful negotiations with the State of Cojedes, the NorAm/LYMCA Joint
Venture Partnership has been approached by other States within the Republic of
Venezuela to provide proposals to set up and conduct Lotteries within those
States.08/26/97 News Release
Comment : Here the company states that they will put in 200 machines
Then NorAm Released this :09/02/97
The lottery announcement (8-26-97), for the Cojedes lottery project
limited NorAm to electronic video lottery sales within the state of Corjedes,
Republic of Venezuela. Annual sales and net income projections for that
agreement were estimated at $10 million and $2.5 million, respectively.
Following a meeting in Miami, Florida, on Sept. 1, 1997, between the
principals of NorAm and Lymca, an agreement was signed whereby, NorAm will
receive a 50% share of all Cojedes lottery sales throughout the Republic of
Venezuela.
This new arrangement will increase the population exposure for lottery
sales from a single state, to 23 states and the city of Caracas, with a total
population of 23 million.
George C. Zilva, CEO, NorAm, and Federico Fernandpoez, CEO, Lymca, have
conservatively placed the new annual sales and net income projections for the
Cojedes lottery, NorAm/Lymca joint venture at $40 million gross annual sales
and $10 million net sales to the joint venture.
Comment : My question at this point was where were they going to get the machines and would this mean an increase in the amount of the machines.
Then Noram Went ahead and released this: 10/23/97
TOLEDO, Ohio, Oct. 23 /PRNewswire/ -- NorAm Gaming & Entertainment Corporation (Nasdaq:NRAG - news),
announced today that Sharp Image Gaming International Corporation of Chatsworth, California, has entered into an agreement
with NorAm to supply VLT lottery terminals to the Cojedes Venezuela lottery project. The project was previously announced
by NorAm, on August 26, 1997, with a follow-up announcement on September 3, 1997.
Sharp Image is a major supplier of VLT touch screen terminals and slot machines to gaming establishments throughout North
and South America. The company headquarters in Chatsworth, California, includes a 40,000 sq. ft. ''state of the art''
manufacturing facility.
In accordance with a newly negotiated agreement between NorAm and its Venezuelan joint venture partner, Lymca, S.A.,
NorAm will receive 60% of the net revenue from the lottery project and Lymca will receive 40%. Under the new
NorAm-Sharp Image agreement, both companies will equally divide the 60% net revenue.
George C. Zilba, CEO of NorAm Gaming, stated that Sharp Image Gaming completed their own corporate due diligence
prior to becoming involved in the project.
Sharp Image sent company representatives to Venezuela to determine the feasibility of becoming involved in the project, and
to provide income and expense projections.
In a recent correspondence to NorAm's management, Sharp Image projected that the Cojedes lottery will produce the
following revenues:
1998 PROJECTIONS:
Gross Revenue $82,500,000.00
Gross Margin (after prizes) $20,625,000.00
Net Revenue (after operating expenses) $12,781,510.00
Total machines placed by the end of 1998 1300
1999 PROJECTIONS:
Gross Revenue $170,250,000.00
Gross Margin (after prizes) $42,562,500.00
Net Revenue (after operating expenses) $36,879,135.00
Total machines placed by the end of 1999 1700
2000 PROJECTIONS:
Gross Revenue $214,170,000.00
Gross Margin (after prizes) $53,542,500.00
Net Revenue (after operating expenses) $46,431,735.00
Total machines placed by the end of 2000 2100
Comment : Here they show the New amount of machines , The time frame in which they will be installed and the changes in Revenue .
Sharp Image made these projections on their own before siging the contract with NorAm ,(NorAm considered these numbers cut them in half and then announced them on their own) if i recall, but you could ask george when you call him. NorAm also showed the ability to get major financing to back this project with an offer of a purchase of the VLT's , to me that says alot about the strength of this deal and the partners. If an investment banker is willing to front 10 million for it,things must be in order from their prospective aswell.
You Wrote:
I found no info about the status of the advertising and promo program, only that there is supposed to be such a program.
Comment: At some point we must give managment of 3 companies the respect they deserve( NorAm having 100 years combined expierence it self in the gaming industry) . With 3 fully staffed offices in venezuela now , i would expect that this would be one of the things they were working on while the start up procedures are taking place as mentioned on the Gagel report.
You wrote :
My question about who is checking the machine intake for NorAm still isn't answered to my satisfaction. yes, the machines apparently will be audited by Golden Games personnel, but..........???? Where does it say that an audit is being done for/by NorAm???
Comment : Somewhere in the past, i had mentioned that the machines are accessable at anytime by telephone line, and have memory capable of the lifetime of the machine ( how long i dont know). After a conversation with Mark Nizdel in November, i was made aware of the lithium battery which lasts 6-7 years in the event of a power failure. (note for george eberting: George Zilba was an unware of this feature until yesterday,sorry if any confusion!). In normal business people and partners must be accountable to all. All partners have been completely accountable to each other to date. NorAm Being a publicly trader OTC:BB stock and a filing company striving for Nasdaq, has all the reasons to continue this practice of accountability.
You wrote:
I was gratified to learn that NorAm has not given up on its efforts
to recover stock from old PR firms. I do recall that MBA stated that no efforts were being made to recover those shares, however. You can therefore understand my confusion since MBA is acting as a company spokesman. I would like to know if any lawsuits have been filed in this effort and, if so, in what jurisdiction(s).
Comment :
I wrote in that post
In order to pursue the legal aspect of these events
would have come to great expense for the company and taken money away from its projects that were moving forward such as the V-LAND project
. I never said they werent or arent pursuing it . I have always thought that would be a great surprise someday.
You wrote :
Regarding the Gagel Report. I presume NorAm paid for this report. If so, they certainly didn't pay him to say mean things. In fact, Gagel's credibility is largely diluted, IMO, when he says things like:
Mr. Zilba is "tireless" and is the "driving force." And I was especially turned off when he says the project should "be an explosive success storyof very significantmagnitude." If it looks like hype, and it sounds like hype,.........
Comment : About the Author
James P. Gagel graduated from Duke University ('77) and Rutgers University Law School ('82), and practiced law in the United States for 7 years before going to Peru as a Fulbright Scholar in 1989, where he worked for the Ministry of Justice on legal reform projects. From 1990 to 1996 he practiced with a Peruvian law firm, where he represented major American and Canadian gaming entities entering the Peruvian market. He has participated in the identification, development, implementation and operation of gaming operations in South America, including, casinos, slot machine parlors, bingos, and nationwide lotteries. Fluent in Spanish and an expert in Latin America's civil law system,Mr. Gagel devotes the bulk of his time to joint venture and corporate structuring, leasing and acquisitions, licensing, regulatory compliance, intellectual property protection, and litigation on behalf of American companies involved in South American gaming. He continues to represent American clients in South America from his Washington,D.C. office, and is currently involved in projects in Venezuela, Argentina and Peru.
comment :I highly doubt that a person with his resume would jeopordize his "crediability" in an industry he has been working in for over 12 years on the cost of a plane ticket. He was asked to do an objective report and he did ,IMVHLWSO.
You wrote :
I presume the 1998 projections are for the entire Golden Games JV. This should be more clearly stated, and NorAm's share should be shown separately. The only reference to NorAm's independent share is in the
11/13 press release which gives a 27 cent per share figure for 1998.
(Is this before or after recovering the shares given to the PR firms?)
Comment : The shares have not been figured into any projection on any project . If and when they come back it will be like i said a great surprise.
You wrote:
It is interesting that the firms involved keep quoting each other for the revenue projections. There really is no "independent" evaluation, is there?
Comment : It is intresting that you have formed and opinon at this stage in your research, having not even spoken to any person involved. what you suggest in this statement is that 3 companies along with the government are in cahoots. Those projections were done by SHARP IMAGE not NorAm . NorAm followed up with the .27 cents. Sharp Image is a private company with nothing to gain and LYMCA is another country.
You wrote :
Finally, why would capital expenditures be called "operating expenses"? What kind of accounting is that? Is the life expectancy of the machines that short? What is the life expectancy of the machines, by the way.
Comment :The Accounting Questions are for the Accountants , I dont know that they will talk to anyone about it but there INFO is listed on the web site .
As far as the machines life expectancy. They are built of high quality and should last for a very long time. give george a call when he gets back.
You Wrote :
You can bark at me all you want. But I think YOU are the one who has not done complete DD. Until I'm satisfied that NorAm has all of its bases covered I'm not buying into it. George E.
Comment : I realize your post was made to dave but i thought maybe i could help
No one is twisting your arm , but i will continue to do my best in helping to answer the questions. These are all my personaly feelings and things i have descovered through my research .What i have always suggested is that a person not base their decision on what they read on the boards, but to call the company, ask all the questions you want , get a good feel for the company and then come back and discuss certain risks we have involved in investing this companyand the postive things , rather then forming opinons along the way . All investments as you know from your expeirence in both real estate , investment, and marketing comes with risks. I feel based on my knowledge and research in to this company for me and my family it is worth it. As things develop i will adjust my decsion if necassary. I want to thank you for some of those questions. I was able to spend the last 3 hours going over some of the news story's all the way back to February . Its always nice to see progress and get a refresher course at the same time .
GO NRAG MBA |
