##### Table of Contents



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
   o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
  WPT ENTERPRISES, INC.
 
  Delaware
    
    77-06390000(State or other jurisdiction
of incorporation or organization)
    
    (I.R.S. Employer
Identification No.)5700 Wilshire Boulevard
Suite 350
Los Angeles, California
    
    90036(Address of principal executive offices)
    
    (Zip Code)
 
  Yes þ
    
    
    
    No o
  Yes o
    
    
    
    No þ
  Yes o
    
    
    
    No þ




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##### Table of Contents



WPT ENTERPRISES, INC.
 INDEX
 Page ofForm 10-QPART I.
    
    FINANCIAL INFORMATIONITEM 1.
    
    FINANCIAL STATEMENTSCondensed Balance Sheets as of July 3, 2005 (unaudited) and January 2, 2005
    
    3Condensed Statements of (Loss) Earnings for the three months ended July 3, 2005 and July 4, 2004 (unaudited)
    
    4Condensed Statements of Comprehensive (Loss) Earnings for the three months ended July 3, 2005 and July 4, 2004 (unaudited)
    
    5Condensed Statements of (Loss) Earnings for the six months ended July 3, 2005 and July 4, 2004 (unaudited)
    
    6Condensed Statements of Comprehensive (Loss) Earnings for the six months ended July 3, 2005 and July 4, 2004 (unaudited)
    
    7Condensed Statements of Stockholders Equity for the six months ended July 3, 2005 and July 4, 2004 (unaudited)
    
    8Condensed Statements of Cash Flows for the six months ended July 3, 2005 and July 4, 2004 (unaudited)
    
    9Notes to Condensed Financial Statements (unaudited)
    
    10ITEM 2.
    
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    13ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    21ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    21PART II.
    
    OTHER INFORMATIONITEM 1.
    
    LEGAL PROCEEDINGS
    
    22ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    23ITEM 6.
    
    EXHIBITS
    
    23SIGNATURES
    
    
    
    24EX-31.1EX-31.2EX-32.1EX-32.2




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WPT ENTERPRISES, INC.
Condensed Balance Sheets
July 3, 2005 (unaudited) and January 2, 2005
 July 3, 2005
    
    
    January 2, 2005(In thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,599
    
    
    $
    4,525Short-term investments
    
    
    26,566
    
    
    
    27,755Accounts receivable, net of allowance
    
    
    1,259
    
    
    
    1,950Deferred television costs
    
    
    198
    
    
    
    917Deferred tax assets
    
    
    162
    
    
    
    136Inventory
    
    
    36
    
    
    
    52Other
    
    
    458
    
    
    
    62434,278
    
    
    
    35,959Property and equipment, net
    
    
    1,276
    
    
    
    703Restricted cash
    
    
    246
    
    
    
    244Investment
    
    
    207
    
    
    
    207Other assets
    
    
    270
    
    
    
    $
    36,277
    
    
    $
    37,113Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    265
    
    
    $
    17Accrued payroll and related
    
    
    256
    
    
    
    292Other accrued expenses
    
    
    1,379
    
    
    
    1,321Due to parent
    
    
    1
    
    
    
    16Deferred revenue
    
    
    3,448
    
    
    
    3,2805,349
    
    
    
    4,926Common stock subject to repurchase
    
    
    639
    
    
    
    618Stockholders equityPreferred
stock, par value of $0.001
Authorized 20,000 shares; none issued and
outstanding
    
    
    
    
    
    
    Common
stock, $0.001 par value authorized 100,000 shares;
20,155 and 19,480 shares issued and outstanding
    
    
    20
    
    
    
    19Additional
paid-in capital
    
    
    33,548
    
    
    
    32,767Deficit
    
    
    (3,233
    )
    
    
    (1,205
    )Accumulated other comprehensive loss
    
    
    (42
    )
    
    
    (6
    )Deferred compensation
    
    
    (4
    )
    
    
    (6
    )30,289
    
    
    
    31,569$
    36,277
    
    
    $
    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) Earnings
Three months ended July 3, 2005 and July 4, 2004
(unaudited)
 2005
    
    
    2004(In thousands, except per share data)Revenues:License fees:Domestic television
    
    $
    3,586
    
    
    $
    3,655International
television
    
    
    641
    
    
    
    62Product licensing
    
    
    1,114
    
    
    
    535,341
    
    
    
    3,770Event hosting and
sponsorship fees
    
    
    1,170
    
    
    
    890Other
    
    
    89
    
    
    
    596,600
    
    
    
    4,719Cost of revenues
    
    
    4,377
    
    
    
    2,645Gross profit
    
    
    2,223
    
    
    
    2,074Expenses:Selling and administrative
    
    
    2,836
    
    
    
    1,165Depreciation
    
    
    37
    
    
    
    332,873
    
    
    
    1,198Earnings (loss) from operations
    
    
    (650
    )
    
    
    876Other income:Interest
    
    
    224
    
    
    
    11Net earnings (loss)
    
    
    ($426
    )
    
    $
    887Net earnings (loss) per common share  basic
    
    
    ($0.02
    )
    
    $
    0.06Net earnings (loss) per common share  diluted
    
    
    ($0.02
    )
    
    $
    0.06Weighted average
common shares
outstanding  basic
    
    
    19,645
    
    
    
    14,240Dilutive effect of restricted stock
    
    
    
    
    
    
    1,198Dilutive effect of stock options
    
    
    
    
    
    
    559Weighted average common shares outstanding  diluted
    
    
    19,645
    
    
    
    15,997
 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) Earnings
Three months ended July 3, 2005 and July 4, 2004
(unaudited)
 2005
    
    
    2004(In thousands)Net earnings (loss)
    
    
    ($426
    )
    
    $
    887Other comprehensive earnings, net of tax:Unrealized gains on securities:Unrealized holding gains during the period
    
    
    6
    
    
    
    Comprehensive earnings (loss)
    
    
    ($420
    )
    
    $
    887
 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
Six months ended July 3, 2005 and July 4, 2004
(unaudited)
 2005
    
    
    2004(In thousands, except per share data)Revenues:License fees:Domestic television
    
    $
    5,549
    
    
    $
    7,195International
television
    
    
    1,060
    
    
    
    165Product licensing
    
    
    2,193
    
    
    
    538,802
    
    
    
    7,413Event hosting and
sponsorship fees
    
    
    1,714
    
    
    
    1,268Other
    
    
    187
    
    
    
    17710,703
    
    
    
    8,858Cost of revenues
    
    
    7,564
    
    
    
    5,117Gross profit
    
    
    3,139
    
    
    
    3,741Expenses:Selling and administrative
    
    
    5,589
    
    
    
    1,965Depreciation
    
    
    58
    
    
    
    675,647
    
    
    
    2,032Earnings (loss) from operations
    
    
    (2,508
    )
    
    
    1,709Other income (expense):Interest income
    
    
    480
    
    
    
    11Interest expense
    
    
    
    
    
    
    (41
    )Net earnings (loss)
    
    
    ($2,028
    )
    
    $
    1,679Net earnings (loss) per common share  basic
    
    
    ($0.10
    )
    
    $
    0.12Net earnings (loss) per common share  diluted
    
    
    ($0.10
    )
    
    $
    0.10Weighted average
common shares
outstanding  basic
    
    
    19,351
    
    
    
    13,947Dilutive effect of restricted stock
    
    
    
    
    
    
    1,398Dilutive effect of stock options
    
    
    
    
    
    
    652Weighted average common shares outstanding  diluted
    
    
    19,351
    
    
    
    15,997
 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
Six months ended July 3, 2005 and July 4, 2004
(unaudited)
 2005
    
    
    2004(In thousands)Net earnings (loss)
    
    
    ($2,028
    )
    
    $
    1,679Other comprehensive loss, net of tax:Unrealized losses on securities:Unrealized holding losses during the period
    
    
    (36
    )
    
    
    Comprehensive earnings (loss)
    
    
    ($2,064
    )
    
    $
    1,679
 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
Six months ended July 3, 2005 and July 4, 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    2Common stock issued
    
    
    
    
    
    
    
    
    
    
    675
    
    
    
    1
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Stock-based compensation awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    800Interest on common stock subject to repurchase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36
    )
    
    
    (36
    )Net earnings (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ($2,028
    )
    
    
    
    
    
    
    
    
    
    
    (2,028
    )BALANCES AT JULY 3, 2005
    
    
    
    
    
    $
    
    
    
    
    20,155
    
    
    $
    20
    
    
    $
    33,548
    
    
    $
    (3,233
    )
    
    $
    (4
    )
    
    $
    (42
    )
    
    $
    30,2892004BALANCES AT DECEMBER 29, 2003
    
    
    93
    
    
    $
    119
    
    
    
    
    
    
    $
    
    
    
    $
    361
    
    
    $
    (2,637
    )
    
    $
    (12
    )
    
    $
    
    
    
    $
    (2,169
    )Reduction of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Stock-based compensation awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Net earnings (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,679
    
    
    
    
    
    
    
    
    
    
    
    1,679BALANCES AT JULY 4, 2004
    
    
    93
    
    
    $
    119
    
    
    
    
    
    
    $
    
    
    
    $
    561
    
    
    $
    (958
    )
    
    $
    (9
    )
    
    $
    
    
    
    $
    (287
    )
 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
Six months ended July 3, 2005 and July 4, 2004
(unaudited)
 July 3, 2005
    
    
    July 4, 2004(In thousands)OPERATING ACTIVITIES:Net earnings (loss)
    
    
    ($2,028
    )
    
    $
    1,679Adjustments to reconcile net
earnings to net cash
provided by operating activities:Depreciation
    
    
    58
    
    
    
    67Production depreciation
    
    
    126
    
    
    
    Stock-based compensation awards
    
    
    1,010
    
    
    
    270Bad debts
    
    
    47
    
    
    
    Changes in operating assets and
liabilities:Accounts receivable
    
    
    644
    
    
    
    85Inventory
    
    
    16
    
    
    
    7Deferred television costs
    
    
    511
    
    
    
    1,001Other assets
    
    
    (104
    )
    
    
    (859
    )Accounts payable
    
    
    248
    
    
    
    (42
    )Due to parent
    
    
    (15
    )
    
    
    (240
    )Deferred revenue
    
    
    168
    
    
    
    1,052Accrued expenses
    
    
    22
    
    
    
    510Net cash provided by operating activities
    
    
    703
    
    
    
    3,530INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (757
    )
    
    
    (162
    )Investment in unconsolidated affiliate
    
    
    
    
    
    
    (201
    )Decrease in short-term investments
    
    
    1,127
    
    
    
    Net cash provided by (used in) investing activities
    
    
    370
    
    
    
    (363
    )FINANCING ACTIVITIES:Increase in bank overdraft
    
    
    
    
    
    
    86Increase in restricted cash
    
    
    (2
    )
    
    
    Proceeds from stock option exercise
    
    
    3
    
    
    
    Repayments of notes payable to parent
    
    
    
    
    
    
    (3,253
    )Net cash provided by (used in) financing activities
    
    
    1
    
    
    
    (3,167
    )Net increase in cash and cash equivalents
    
    
    1,074
    
    
    
    Cash and cash equivalents  beginning of period
    
    
    4,525
    
    
    
    Cash and cash equivalents  end of period
    
    $
    5,599
    
    
    $
    0
 The accompanying notes are an integral part of these condensed financial statements.
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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
  July 3,
    
    
    January 2,2005
    
    
    2005(In thousands)In-production
    
    $
    179
    
    
    $
    911Development and pre-production
    
    
    19
    
    
    
    6$
    198
    
    
    $
    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
    
    Six Months EndedJuly 3, 2005
    
    July 4, 2004
    
    July 3, 2005
    
    July 4, 2004(In thousands, except
per share data)Net earnings (loss) as reported
    
    $
    (426
    )
    
    $
    887
    
    
    
    (2,028
    )
    
    $
    1,679Add: equity-based compensation
expense included in reported net
earnings
    
    
    587
    
    
    
    176
    
    
    
    1,010
    
    
    
    270Deduct: total equity-based
compensation expense determined under
the fair value method
    
    
    (1,183
    )
    
    
    (176
    )
    
    
    (2,175
    )
    
    
    (270
    )Net earnings (loss) as pro forma under
SFAS No. 123
    
    $
    (1,022
    )
    
    $
    887
    
    
    
    (3,193
    )
    
    
    1,679Net (loss) earnings per common share 
basic  as reported
    
    $
    (0.02
    )
    
    $
    0.06
    
    
    $
    (0.10
    )
    
    $
    0.12Net (loss) earnings per common share 
diluted  as reported
    
    $
    (0.02
    )
    
    $
    0.06
    
    
    $
    (0.10
    )
    
    $
    0.10Net (loss) earnings per common share 
basic  pro forma
    
    $
    (0.05
    )
    
    $
    0.06
    
    
    $
    (0.17
    )
    
    $
    0.12Net (loss) earnings per common share 
diluted  pro forma
    
    $
    (0.05
    )
    
    $
    0.06
    
    
    $
    (0.17
    )
    
    $
    0.10
 5. CONTINGENCIES
  11




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WPT ENTERPRISES, INC.
Notes to Condensed Financial Statements (Continued)
(Unaudited)
 6. SEGMENT INFORMATION
  Three months ended July 3, 2005 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Casino
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    4,999
    
    
    $
    1,195
    
    
    $
    
    
    
    $
    406
    
    
    $
    
    
    
    $
    6,600Cost of revenues
    
    
    4,216
    
    
    
    161
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,377Gross profit
    
    
    783
    
    
    
    1,034
    
    
    
    
    
    
    
    406
    
    
    
    
    
    
    
    2,223Total assets
    
    
    1,297
    
    
    
    570
    
    
    
    450
    
    
    
    16
    
    
    
    33,944
    
    
    
    36,277Depreciation
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    109
 Three months ended July 4, 2004 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Casino
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    4,261
    
    
    $
    118
    
    
    $
    
    
    
    $
    340
    
    
    $
    
    
    
    $
    4,719Cost of revenues
    
    
    2,621
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,645Gross profit
    
    
    1,640
    
    
    
    94
    
    
    
    
    
    
    
    340
    
    
    
    
    
    
    
    2,074Total assets
    
    
    1,081
    
    
    
    195
    
    
    
    
    
    
    
    
    
    
    
    1,265
    
    
    
    2,541Depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    33
 Six months ended July 3, 2005 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Casino
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    7,662
    
    
    $
    2,342
    
    
    $
    
    
    
    $
    699
    
    
    $
    
    
    
    $
    10,703Cost of revenues
    
    
    7,369
    
    
    
    195
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,564Gross profit
    
    
    293
    
    
    
    2,147
    
    
    
    
    
    
    
    699
    
    
    
    
    
    
    
    3,139Total assets
    
    
    1,297
    
    
    
    570
    
    
    
    450
    
    
    
    16
    
    
    
    33,944
    
    
    
    36,277Depreciation
    
    
    126
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    184
 Six months ended July 4, 2004 (in thousands):
 Consumer
    
    Online
    
    CorporateStudios
    
    Products
    
    Casino
    
    Alliances
    
    Corporate
    
    TotalRevenues
    
    $
    8,161
    
    
    $
    230
    
    
    $
    
    
    
    $
    467
    
    
    $
    
    
    
    $
    8,858Cost of revenues
    
    
    5,069
    
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,117Gross profit
    
    
    3,092
    
    
    
    182
    
    
    
    
    
    
    
    467
    
    
    
    
    
    
    
    3,741Total assets
    
    
    1,081
    
    
    
    195
    
    
    
    
    
    
    
    
    
    
    
    1,265
    
    
    
    2,541Depreciation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    67
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##### Table of Contents



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 Casino, an online gaming division.
  WPT Studios ®
   13




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##### Table of Contents



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
     WPT Consumer Products
  WPT Corporate Alliances
 WPT
Online Casino .
  14




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##### Table of Contents



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Six Months Ended July 3, 2005 Compared to the Six Months Ended July 4, 2004
 Revenues
  Costs and Expenses
   Other
  Net Earnings (Loss)
  15




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##### Table of Contents



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Three Months Ended July 3, 2005 Compared to the Three Months Ended July 4, 2004
 Revenues
  Costs and Expenses
   Other
  Net Earnings (Loss)
  16




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##### Table of Contents



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Liquidity and Capital Resources
     Payments due by periodLess than
    
    
    
    
    
    
    
    
    
    
    More thanContractual obligations
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsOperating lease(1)
    
    $
    2,922
    
    
    $
    455
    
    
    $
    957
    
    
    $
    1,020
    
    
    $
    490Purchase obligations(2)
    
    
    311
    
    
    
    176
    
    
    
    135
    
    
    
    
    
    
    
    Employee obligations(3)
    
    
    1,014
    
    
    
    764
    
    
    
    250
    
    
    
    
    
    
    
    $
    4,247
    
    
    $
    1,395
    
    
    $
    1,342
    
    
    $
    1,020
    
    
    $
    490
 
 (1)
    
    Operating lease includes 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 the following: contractual obligations related to the
establishment of our internet gaming site of $270,000 and a monthly retainer of $13,750 for
public relations services through September 2005.(3)
    
    Employee obligations include the base salaries payable to Steven Lipscomb, Audrey Kania and
Robyn Moder under their respective employment agreements. Critical Accounting Estimates and Policies
  Revenue Recognition: Accounting by
Producers or Distributors of Films
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##### Table of Contents



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 
    
    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.
   Deferred
television costs:
 Investment:
  18




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##### Table of Contents



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 Income taxes:
  Common
stock subject to repurchase:
 Stock-based compensation: Accounting for Stock Issued to
Employees
 Recently Issued Accounting Pronouncements
 Accounting for Stock Issued to Employees
 Exchanges of Non-monetary Assets, an
Amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions.
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##### Table of Contents



WPT ENTERPRISES, INC.
Managements Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
 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
  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;
    
    The
growth of revenues from our online casino business will be dependent
on our investment in advertising and marketing, on our ability to
establish consumer awareness in the foreign markets in which online
gaming is permissible, and on our ability to compete in a relatively
new industry with an increasing number of market entrants, and
therefore such growth may be slower than anticipated and difficult
to predict.
    
    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.
  20




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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
   21




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##### Table of Contents



WPT ENTERPRISES, INC.
Part II
Other Information
 ITEM 1. LEGAL PROCEEDINGS
     22




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##### Table of Contents



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 CEO 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 CFO 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
 23




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SIGNATURES
  Dated: August 22, 2005
    WPT ENTERPRISES, INC.Registrant/s/ Steven LipscombSteven LipscombChief Executive Officer/s/ W. Todd SteeleW. Todd SteeleChief Financial Officer 24