##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended October 2, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission
File No. 0-24993
 WPT ENTERPRISES, INC.
 
  Delaware
    
    77-06390000(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)5700 Wilshire BoulevardSuite 350Los Angeles, California
    
    90036(Address of principal executive offices)
    
    (Zip Code)
 
  Yes þ
    
    No o
  Yes o
    
    No þ
 o þ




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##### 



WPT ENTERPRISES, INC.
 INDEX
 Page ofForm 10-QPART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSCondensed Balance Sheets as of October 2, 2005 (unaudited) and January 2, 2005
    
    3Condensed Statements of Loss for the three months ended October 2, 2005 and October 3, 2004 (unaudited)
    
    4Condensed Statements of Comprehensive Loss for the three months ended October 2, 2005 and October 3, 2004 (unaudited)
    
    5Condensed Statements of Earnings (Loss) for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)
    
    6Condensed Statements of Comprehensive Earnings (Loss) for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)
    
    7Condensed Statements of Stockholders Equity for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)
    
    8Condensed Statements of Cash Flows for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)
    
    9Notes to Condensed Financial Statements (unaudited)
    
    10ITEM
2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    14ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    23ITEM
4. CONTROLS AND PROCEDURES
    
    23PART II. OTHER INFORMATIONITEM
1. LEGAL PROCEEDINGS
    
    24ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    25ITEM
6. EXHIBITS
    
    25SIGNATURES
    
    26
 2




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##### 



WPT ENTERPRISES, INC.
Condensed Balance Sheets
October 2, 2005 (unaudited) and January 2, 2005
 October 2, 2005
    
    
    January 2, 2005(In thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    3,015
    
    
    $
    4,525Short-term investments
    
    
    27,471
    
    
    
    27,755Accounts receivable, net of allowance
    
    
    1,480
    
    
    
    1,950Deferred television costs
    
    
    1,212
    
    
    
    917Deferred tax assets
    
    
    95
    
    
    
    136Inventory
    
    
    51
    
    
    
    52Other
    
    
    944
    
    
    
    62434,268
    
    
    
    35,959Property and equipment, net
    
    
    1,361
    
    
    
    703Restricted cash
    
    
    249
    
    
    
    244Other assets
    
    
    446
    
    
    
    207$
    36,324
    
    
    $
    37,113Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    83
    
    
    $
    17Accrued payroll and related
    
    
    242
    
    
    
    292Other accrued expenses
    
    
    1,953
    
    
    
    1,321Due to parent
    
    
    2
    
    
    
    16Deferred revenue
    
    
    4,764
    
    
    
    3,2807,044
    
    
    
    4,926Common stock subject to repurchase
    
    
    
    
    
    
    618Stockholders equity:Preferred stock, par value of $0.001
Authorized 20,000 shares; none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value authorized 100,000
shares;
20,158 and 19,480 shares issued and outstanding
    
    
    20
    
    
    
    19Additional paid-in capital
    
    
    34,128
    
    
    
    32,767Deficit
    
    
    (4,787
    )
    
    
    (1,205
    )Accumulated other comprehensive loss
    
    
    (79
    )
    
    
    (6
    )Deferred compensation
    
    
    (2
    )
    
    
    (6
    )29,280
    
    
    
    31,569$
    36,324
    
    
    $
    37,113
 The accompanying notes are an integral part of these condensed financial statements.
 3




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##### 



WPT ENTERPRISES, INC.
Condensed Statements of Loss
Three months ended October 2, 2005 and October 3, 2004
(unaudited)
 2005
    
    
    2004(In thousands, except per share data)Revenues:License fees:Domestic television
    
    $
    442
    
    
    $
    2,350International television
    
    
    395
    
    
    
    345Product licensing
    
    
    933
    
    
    
    1591,770
    
    
    
    2,854Online gaming
    
    
    170
    
    
    
    Event hosting and sponsorship fees
    
    
    73
    
    
    
    92Other
    
    
    115
    
    
    
    282,128
    
    
    
    2,974Cost of revenues
    
    
    561
    
    
    
    1,942Gross profit
    
    
    1,567
    
    
    
    1,032Expenses:Selling and administrative
    
    
    3,319
    
    
    
    1,508Depreciation
    
    
    56
    
    
    
    443,375
    
    
    
    1,552Loss from operations
    
    
    (1,808
    )
    
    
    (520
    )Other income (expense):Interest income
    
    
    254
    
    
    
    56Interest expense
    
    
    
    
    
    
    (4
    )Net loss
    
    $
    (1,554
    )
    
    $
    (468
    )Net loss per common share  basic
    
    $
    (0.08
    )
    
    $
    (0.03
    )Net loss per common share  diluted
    
    $
    (0.08
    )
    
    $
    (0.03
    )Weighted average common shares outstanding  basic
    
    
    19,721
    
    
    
    16,748Dilutive effect of restricted stock
    
    
    
    
    
    
    Dilutive effect of stock options
    
    
    
    
    
    
    Weighted average common shares outstanding  diluted
    
    
    19,721
    
    
    
    16,748
 The accompanying notes are an integral part of these condensed financial statements.
 4




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##### 



WPT ENTERPRISES, INC.
Condensed Statements of Comprehensive Loss
Three months ended October 2, 2005 and October 3, 2004
(unaudited)
 2005
    
    
    2004(In thousands)Net loss
    
    $
    (1,554
    )
    
    $
    (468
    )Other comprehensive earnings (loss), net of tax:Unrealized gains (losses) on securities:Unrealized holding gains (losses) during the period
    
    
    (37
    )
    
    
    3Comprehensive loss
    
    $
    (1,591
    )
    
    $
    (465
    )
 The accompanying notes are an integral part of these condensed financial statements.
 5




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##### 



WPT ENTERPRISES, INC.
Condensed Statements of (Loss) Earnings
Nine months ended October 2, 2005 and October 3, 2004
(unaudited)
 2005
    
    
    2004(In thousands, except per share data)Revenues:License fees:Domestic television
    
    $
    5,993
    
    
    $
    9,545International television
    
    
    1,456
    
    
    
    510Product licensing
    
    
    3,125
    
    
    
    21210,574
    
    
    
    10,267Online gaming
    
    
    170
    
    
    
    Event hosting and sponsorship fees
    
    
    1,785
    
    
    
    1,360Other
    
    
    301
    
    
    
    20512,830
    
    
    
    11,832Cost of revenues
    
    
    8,125
    
    
    
    7,059Gross profit
    
    
    4,705
    
    
    
    4,773Expenses:Selling and administrative
    
    
    8,908
    
    
    
    3,473Depreciation
    
    
    113
    
    
    
    1119,021
    
    
    
    3,584Earnings (loss) from operations
    
    
    (4,316
    )
    
    
    1,189Other income (expense):Interest income
    
    
    734
    
    
    
    56Interest expense
    
    
    
    
    
    
    (34
    )Net earnings (loss)
    
    $
    (3,582
    )
    
    $
    1,211Net earnings (loss) per common share  basic
    
    $
    (0.18
    )
    
    $
    0.08Net earnings (loss) per common share  diluted
    
    $
    (0.18
    )
    
    $
    0.07Weighted average common shares outstanding  basic
    
    
    19,525
    
    
    
    14,868Dilutive effect of restricted stock
    
    
    
    
    
    
    1,333Dilutive effect of stock options
    
    
    
    
    
    
    684Dilutive effect of common stock subject to repurchase
    
    
    
    
    
    
    15Weighted average common shares outstanding  diluted
    
    
    19,525
    
    
    
    16,900
 The accompanying notes are an integral part of these condensed financial statements.
 6




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##### 



WPT ENTERPRISES, INC.
Condensed Statements of Comprehensive (Loss) Earnings
Nine months ended October 2, 2005 and October 3, 2004
(unaudited)
 2005
    
    
    2004(In thousands)Net earnings (loss)
    
    $
    (3,582
    )
    
    $
    1,211Other comprehensive earnings (loss), net of tax:Unrealized gains (losses) on securities:Unrealized holding gains (losses) during the period
    
    
    (73
    )
    
    
    3Comprehensive earnings (loss)
    
    $
    (3,655
    )
    
    $
    1,214
 The accompanying notes are an integral part of these condensed financial statements.
 7




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##### 



WPT ENTERPRISES, INC.
Condensed Statements of Stockholders Equity
Nine months ended October 2, 2005 and October 3, 2004
(unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    OtherClass A Units
    
    
    Common Stock
    
    
    Paid-in
    
    
    
    
    
    
    Deferred
    
    
    ComprehensiveShares
    
    
    Dollars
    
    
    Shares
    
    
    Dollars
    
    
    Capital
    
    
    Deficit
    
    
    Compensation
    
    
    Loss
    
    
    Total(In thousands)2005BALANCES AT JANUARY 3, 2005
    
    
    
    
    
    $
    
    
    
    
    19,480
    
    
    $
    19
    
    
    $
    32,767
    
    
    $
    (1,205
    )
    
    $
    (6
    )
    
    $
    (6
    )
    
    $
    31,569Reduction of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Common stock issued
    
    
    
    
    
    
    
    
    
    
    678
    
    
    
    1
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29Stock-based compensation awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    714
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    714Common stock subject to repurchase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    643Interest on common stock subject to repurchase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73
    )
    
    
    (73
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,582
    )
    
    
    
    
    
    
    
    
    
    
    (3,582
    )BALANCES AT OCTOBER 2, 2005
    
    
    
    
    
    $
    
    
    
    
    20,158
    
    
    $
    20
    
    
    $
    34,128
    
    
    $
    (4,787
    )
    
    $
    (2
    )
    
    $
    (79
    )
    
    $
    29,2802004BALANCES AT DECEMBER 29, 2003
    
    
    93
    
    
    $
    119
    
    
    
    
    
    
    $
    
    
    
    $
    361
    
    
    $
    (2,637
    )
    
    $
    (12
    )
    
    $
    
    
    
    $
    (2,169
    )Reduction of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Stock-based compensation awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    537
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    537Conversion of LLC to C-corporation
    
    
    (93
    )
    
    
    (119
    )
    
    
    14,880
    
    
    
    15
    
    
    
    (561
    )
    
    
    680
    
    
    
    
    
    
    
    
    
    
    
    15Net proceeds from issuance of common stock
    
    
    
    
    
    
    
    
    
    
    4,600
    
    
    
    4
    
    
    
    32,386
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,390Common stock subject to repurchase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (602
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (602
    )Interest on common stock subject to repurchase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Other comprehensive earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,211
    
    
    
    
    
    
    
    
    
    
    
    1,211BALANCES AT OCTOBER 3, 2004
    
    
    
    
    
    $
    
    
    
    
    19,480
    
    
    $
    19
    
    
    $
    32,115
    
    
    $
    (746
    )
    
    $
    (8
    )
    
    $
    3
    
    
    $
    31,383
 The accompanying notes are an integral part of these condensed financial statements.
 8




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##### 



WPT ENTERPRISES, INC.
Condensed Statements of Cash Flows
Nine months ended October 2, 2005 and October 3, 2004
(unaudited)
 October 2, 2005
    
    
    October 3, 2004(In thousands)OPERATING ACTIVITIES:Net earnings (loss)
    
    $
    (3,582
    )
    
    $
    1,211Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:Depreciation
    
    
    113
    
    
    
    111Production depreciation
    
    
    191
    
    
    
    Stock-based compensation awards
    
    
    772
    
    
    
    545Bad debts
    
    
    (51
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    614
    
    
    
    (153
    )Inventory
    
    
    1
    
    
    
    (150
    )Deferred television costs
    
    
    (349
    )
    
    
    824Other assets
    
    
    (559
    )
    
    
    (505
    )Accounts payable
    
    
    66
    
    
    
    500Due to parent
    
    
    (14
    )
    
    
    (187
    )Deferred revenue
    
    
    1,484
    
    
    
    3,562Accrued expenses
    
    
    582
    
    
    
    (5
    )Net cash provided by (used in) operating activities
    
    
    (732
    )
    
    
    5,753INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (962
    )
    
    
    (478
    )Loan to and investment in unconsolidated investee
    
    
    
    
    
    
    (207
    )Decrease (increase) in short-term investments
    
    
    160
    
    
    
    (6,013
    )Net cash used in investing activities
    
    
    (802
    )
    
    
    (6,698
    )FINANCING ACTIVITIES:Increase in bank overdraft
    
    
    
    
    
    
    (184
    )Increase in restricted cash
    
    
    (5
    )
    
    
    (244
    )Net proceeds from issuance of common stock
    
    
    
    
    
    
    32,405Proceeds from stock option exercise
    
    
    29
    
    
    
    Repayments of notes payable to parent
    
    
    
    
    
    
    (3,429
    )Net cash provided by financing activities
    
    
    24
    
    
    
    28,548Net increase (decrease) in cash and cash equivalents
    
    
    (1,510
    )
    
    
    27,603Cash and cash equivalents  beginning of period
    
    
    4,525
    
    
    
    Cash and cash equivalents  end of period
    
    $
    3,015
    
    
    $
    27,603
 The accompanying notes are an integral part of these condensed financial statements.
 9




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##### 



WPT ENTERPRISES, INC.
 
 Notes to Condensed Financial Statements
(Unaudited)
 1. BASIS OF PRESENTATION
    2. DEFERRED TELEVISION COSTS
 Accounting
by Producers or Distributors of Films
 TM
  October 2,
    
    
    January 2,2005
    
    
    2005(In thousands)Deferred television costsIn-production
    
    $
    973
    
    
    $
    911Development and pre-production
    
    
    239
    
    
    
    6$
    1,212
    
    
    $
    917
  10




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##### 



WPT ENTERPRISES, INC.
Notes to Condensed Financial Statements (Continued)
(Unaudited)
 3. EARNINGS (LOSS) PER SHARE
  4. STOCK-BASED COMPENSATION
 Accounting for Stock Issued to Employees
 Accounting for Stock-Based Compensation
 Three Months Ended
    
    Nine Months EndedOctober 2, 2005
    
    October 3, 2004
    
    October 2, 2005
    
    October 3, 2004(In thousands, except per share data)Net earnings (loss) as reported
    
    $
    (1,554
    )
    
    $
    (468
    )
    
    
    (3,582
    )
    
    $
    1,211Add: equity-based compensation
expense included in reported net
earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deduct: total equity-based
compensation expense determined under
the fair value method
    
    
    (689
    )
    
    
    (321
    )
    
    
    (1,854
    )
    
    
    (322
    )Net earnings (loss) as pro forma under
SFAS No. 123
    
    $
    (2,243
    )
    
    $
    (789
    )
    
    
    (5,436
    )
    
    
    889Net (loss) earnings per common share 
basic  as reported
    
    $
    (0.08
    )
    
    $
    (0.03
    )
    
    $
    (0.18
    )
    
    $
    0.08Net (loss) earnings per common share 
diluted  as reported
    
    $
    (0.08
    )
    
    $
    (0.03
    )
    
    $
    (0.18
    )
    
    $
    0.07Net (loss) earnings per common share 
basic  pro forma
    
    $
    (0.11
    )
    
    $
    (0.05
    )
    
    $
    (0.28
    )
    
    $
    0.06Net (loss) earnings per common share 
diluted  pro forma
    
    $
    (0.11
    )
    
    $
    (0.05
    )
    
    $
    (0.28
    )
    
    $
    0.05
 11




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##### 



WPT ENTERPRISES, INC.
Notes to Condensed Financial Statements (Continued)
(Unaudited)
 5. SEGMENT INFORMATION
  Three months ended October 2, 2005 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Gaming
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    890
    
    
    $
    995
    
    
    $
    170
    
    
    $
    73
    
    
    $
    
    
    
    $
    2,128Cost of revenues
    
    
    273
    
    
    
    185
    
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    561Gross profit
    
    
    617
    
    
    
    810
    
    
    
    67
    
    
    
    73
    
    
    
    
    
    
    
    1,567Total assets
    
    
    2,260
    
    
    
    832
    
    
    
    489
    
    
    
    12
    
    
    
    32,731
    
    
    
    36,324Depreciation
    
    
    65
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    121
 Three months ended October 3, 2004 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Gaming
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    2,745
    
    
    $
    186
    
    
    $
    
    
    
    $
    43
    
    
    $
    
    
    
    $
    2,974Cost of revenues
    
    
    1,935
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,942Gross profit
    
    
    810
    
    
    
    179
    
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    1,032Total assets
    
    
    1,564
    
    
    
    450
    
    
    
    
    
    
    
    
    
    
    
    34,950
    
    
    
    36,964Depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    44
 Nine months ended October 2, 2005 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Gaming
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    8,552
    
    
    $
    3,336
    
    
    $
    170
    
    
    $
    772
    
    
    $
    
    
    
    $
    12,830Cost of revenues
    
    
    7,642
    
    
    
    380
    
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    8,125Gross profit
    
    
    910
    
    
    
    2,956
    
    
    
    67
    
    
    
    772
    
    
    
    
    
    
    
    4,705Total assets
    
    
    2,260
    
    
    
    832
    
    
    
    489
    
    
    
    12
    
    
    
    32,731
    
    
    
    36,324Depreciation
    
    
    191
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113
    
    
    
    304
 Nine months ended October 3, 2004 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Gaming
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    10,906
    
    
    $
    416
    
    
    $
    
    
    
    $
    510
    
    
    $
    
    
    
    $
    11,832Cost of revenues
    
    
    7,004
    
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,059Gross profit
    
    
    3,902
    
    
    
    361
    
    
    
    
    
    
    
    510
    
    
    
    
    
    
    
    4,773Total assets
    
    
    1,564
    
    
    
    450
    
    
    
    
    
    
    
    
    
    
    
    34,950
    
    
    
    36,964Depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111
    
    
    
    111
 12




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##### 



WPT ENTERPRISES, INC.
Notes to Condensed Financial Statements (Continued)
(Unaudited)
 6. SUBSEQUENT EVENTS
 Accounting for Certain Investments in
Debt and Equity Securities, (i.e.
 13




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
And Results of Operations
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
 ®
 
    
    WPT Studios, a multi-media entertainment division.
    
    WPT Consumer Products, a branded consumer products division.
    
    WPT Corporate Alliances, a sponsorship and event management division.
    
    WPT Online Gaming, an online poker and casino gaming division.
 WPT Studios ®
   14




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
     WPT Consumer Products
  WPT Corporate Alliances
 15




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 WPT Online Gaming .
 Nine Months Ended October 2, 2005 Compared to the Nine Months Ended October 3, 2004
 Revenues
  Costs and Expenses
   Other
  16




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Net Earnings (Loss)
  Three Months Ended October 2, 2005 Compared to the Three Months Ended October 3, 2004
 Revenues
  Costs and Expenses
   Other
  17




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Net Earnings (Loss)
  Liquidity and Capital Resources
    Payments Due by PeriodTotal
    
    
    Less Than 1
    
    
    1-3
    
    
    3-5
    
    
    More Than 5Contractual obligations
    
    
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    YearsOperating
lease obligations (1)
    
    $
    2,808
    
    
    $
    459
    
    
    $
    964
    
    
    $
    1,029
    
    
    $
    356Purchase obligations (2)
    
    
    1,127
    
    
    
    535
    
    
    
    592
    
    
    
    
    
    
    
    Employee obligations (3)
    
    
    805
    
    
    
    680
    
    
    
    125
    
    
    
    
    
    
    
    $
    4,740
    
    
    $
    1,674
    
    
    $
    1,681
    
    
    $
    1,029
    
    
    $
    356
 
 (1)
    
    Operating lease obligations include rent payments on our corporate office space. Monthly
lease payments began at approximately $38,000 and escalate to approximately $45,000 over the
six-year lease term. The amount set forth in the table above assumes monthly lease payments
through May 2011.(2)
    
    Purchase obligations include contractual obligations of $1.1 million related to the
establishment of our internet gaming site.(3)
    
    Employee obligations include the base salaries payable to Steven Lipscomb, Audrey Kania and
Robyn Moder under their respective employment agreements. 18




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Critical Accounting Estimates and Policies
  Revenue Recognition: Accounting by
Producers or Distributors of Films
 
    
    Persuasive evidence of an arrangement exists;
    
    The show/episode is complete, and in accordance with the terms of the arrangement, has
been delivered or is available for immediate and unconditional delivery;
    
    The license period has begun and the customer can begin its exploitation, exhibition or sale;
    
    The sellers price to the buyer is fixed and determinable; and
    
    Collectibility is reasonably assured.
 Reporting Revenue Gross as a Principal versus Net as an Agent.
    19




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Deferred television costs:
 Other assets:
 Accounting for Certain Investments in Debt
and Equity Securities
 Income taxes:
  Common stock subject to repurchase:
 20




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Stock-based compensation: Accounting for Stock Issued to
Employees Share-Based Payment Accounting for Stock-Based Compensation
 Other Recently Issued Accounting Pronouncements
 Exchanges of Non-monetary Assets, an
Amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions.
 Accounting Changes and Error Corrections, a
replacement of APB Opinion No. 20 and SFAS No. 3 Accounting Changes Reporting Accounting Changes in Interim Financial Statements
 Off-Balance Sheet Arrangements
  21




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##### 



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Private Securities Litigation Reform Act
   
    
    We remain heavily reliant upon our agreements with TRV as a source of revenue and any termination or
impairment of these agreements would materially and adversely affect the results of our operations;
    
    The termination or impairment of our relationships with key licensing and strategic partners could
harm our business performance;
    
    Our television programming may fail to maintain a sufficient audience for a variety of reasons, many
of which are beyond our control;
    
    Our ability to create and license our television programming profitably may be negatively affected
by adverse trends that apply to the television production business generally;
    
    Our competitors (many of whom have greater financial resources or marketplace presence) may develop
television programming that would directly compete with our television programming;
    
    A decline in general economic conditions or the popularity of our brand of televised poker
tournaments may negatively impact our business;
    
    We may be unable to protect our entertainment concepts, our current and future brands and our other
intellectual property rights;
    
    We may be unable to successfully expand into foreign markets or into new or complementary businesses;
    
    The regulatory environment for online gaming is currently uncertain, and despite out efforts to
comply with applicable laws, we may be unable to pursue this business fully or our activities may be
claimed or found to be in violation of applicable United States or foreign regulations; and
    
    The loss of our President and Chief Executive Officer or another member of our senior management
team may negatively impact the success of our business.
  22




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##### 



WPT ENTERPRISES, INC.
Quantitative and Qualitative Disclosures about Market Risk; Controls and Procedures
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
   23




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##### 



WPT ENTERPRISES, INC.
 
 Part II 
Other Information
 
 ITEM 1. LEGAL PROCEEDINGS
      24




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##### 



WPT ENTERPRISES, INC.
Part II
Other Information (Continued)
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 6. EXHIBITS
 31.1
    
    Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules
13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules
13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 25




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##### 



SIGNATURES
  Dated: November 15, 2005
    
    WPT ENTERPRISES, INC.Registrant/s/ Steven LipscombSteven LipscombChief Executive Officer/s/ W. Todd SteeleW. Todd SteeleChief Financial Officer
 26