U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________
TO______________.
Commission File No. 0-20630
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FULL HOUSE RESORTS, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 13-3391527
-------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2300 W. Sahara Ave.
Suite 450, Box 23
Las Vegas, Nevada 89102
- ------------------------------------ -----------
(Address of principal executive offices) (zip code)
(702) 221-7800
-------------------------------
(Registrant's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
As of November 10, 2000, Registrant had 10,340,380 shares of its $.0001 par
value common stock outstanding.
FULL HOUSE RESORTS, INC.
TABLE OF CONTENTS
Page
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PART I. Financial Information
Item 1. Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of
September 30, 2000 and December 31, 1999 3
Unaudited Condensed Consolidated Statements of Operations
for the three months ended September 30, 2000 and 1999 4
Unaudited Condensed Consolidated Statements of Operations
for the nine months ended September 30, 2000 and 1999 5
Unaudited Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 2000 and 1999 6
Notes to Unaudited Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. Other Information 13
Signatures 13
-2-
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
- -----------------------------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
ASSETS 2000 1999
------------- --------------
CURRENT ASSETS:
Cash and cash equivalents $ 323,071 $ 438,800
Income tax refund receivable -- 34,057
Prepaid expenses 166,044 87,590
------------ -------------
Total current assets 489,115 560,447
LAND HELD FOR DEVELOPMENT 4,621,670 4,621,670
FIXTURES AND EQUIPMENT 50,866 69,413
GOODWILL - net 506,280 885,981
NOTE RECEIVABLE - JOINT VENTURE 1,035,726 839,580
INVESTMENTS IN JOINT VENTURES 3,762,741 3,672,175
DEFERRED TAX ASSET 407,282 614,083
DEPOSITS AND OTHER ASSETS 2,776,344 2,620,487
------------ -------------
TOTAL $13,650,024 $ 13,883,836
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 17,322 $ 19,238
Current portion of long-term debt 3,350,000 --
Payable to joint ventures 120,285 60,077
Accrued expenses 231,761 190,332
------------ -------------
Total current liabilities 3,686,368 269,647
------------ -------------
LONG-TERM DEBT, net of current portion -- 3,750,000
------------ -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Cumulative preferred stock, par value $.0001, 5,000,000
shares authorized; 700,000 shares issued and outstanding;
aggregate liquidation preference of $3,832,500 and $3,675,000 70 70
Common stock, par value $.0001, 25,000,000 shares authorized;
10,340,380 shares issued and outstanding 1,034 1,034
Additional paid in capital 17,416,029 17,374,449
Accumulated deficit (7,486,477) (7,511,364)
------------ -------------
Total stockholders' equity 9,930,656 9,864,189
------------ -------------
TOTAL $13,650,024 $ 13,883,836
============ =============
See notes to unaudited condensed consolidated financial statements.
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FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED
SEPTEMBER 30,
2000 1999
-------------- -------------
OPERATING REVENUES:
Joint ventures $ 1,132,115 $ 955,684
OPERATING COSTS AND EXPENSES:
Joint venture pre-opening costs 255,188 92,139
General and administrative 464,314 539,567
Depreciation and amortization 132,634 132,687
-------------- -------------
Total operating costs and expenses 852,136 764,393
-------------- -------------
INCOME FROM OPERATIONS 279,979 191,291
Interest expense and debt issue costs (84,257) (62,371)
Interest and other income 2,460 265,085
-------------- -------------
INCOME BEFORE INCOME TAXES 198,182 394,005
INCOME TAX PROVISION (137,989) (60,891)
-------------- -------------
NET INCOME 60,193 333,114
Less, undeclared dividends on cumulative preferred stock 52,500 52,500
-------------- -------------
NET INCOME APPLICABLE TO COMMON SHARES $ 7,639 $ 280,614
============== =============
NET INCOME PER COMMON SHARE, Basic and Diluted $ 0.00 $ 0.03
============== =============
Weighted average shares, Basic and Diluted 10,340,380 10,340,380
============== =============
See notes to unaudited condensed consolidated financial statements.
-4-
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30,
2000 1999
-------------- -------------
OPERATING REVENUES:
Joint ventures $ 2,899,428 $ 2,784,249
OPERATING COSTS AND EXPENSES:
Joint venture pre-opening costs 512,781 157,245
General and administrative 1,389,301 1,606,047
Depreciation and amortization 398,249 395,339
-------------- -------------
Total operating costs and expenses 2,300,331 2,158,631
-------------- -------------
INCOME FROM OPERATIONS 599,097 625,618
Interest expense and debt issue costs (249,563) (187,230)
Interest and other income 8,364 283,210
-------------- -------------
INCOME BEFORE INCOMES TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 357,898 721,598
INCOME TAX PROVISION (333,011) (186,467)
-------------- -------------
NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 24,887 535,131
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, net of tax -- (543,870)
-------------- -------------
NET INCOME (LOSS) 24,887 (8,739)
Less, undeclared dividends on cumulative preferred stock 157,500 157,500
-------------- -------------
NET LOSS APPLICABLE TO COMMON SHARES $ (132,613) $ (166,239)
============== =============
Income (loss) per common share before cumulative effect of change in
accounting principle, Basic and Diluted $ (0.01) $ 0.04
Change in accounting principle, Basic and Diluted -- (0.05)
-------------- -------------
NET LOSS PER COMMON SHARE, Basic and Diluted $ (0.01) $ (0.01)
============== =============
Weighted average shares; Basic and Diluted 10,340,380 10,340,380
============== =============
See notes to unaudited condensed consolidated financial statements.
-5-
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30,
2000 1999
-------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 24,887 $ (8,739)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 398,249 395,339
Amortization of deferred compensation expense 41,580 117,288
Cumulative effect of change in accounting principle, net of tax -- 543,870
Equity in income of joint ventures (2,386,647) (2,627,004)
Distributions from joint ventures 2,296,079 2,549,285
Changes in assets and liabilities:
Receivables 34,057 35,871
Prepaid expenses (78,454) (30,173)
Other assets (80,857) (442,661)
Deferred taxes 206,801 --
Accounts payable and accrued expenses 39,514 58,065
-------------- -------------
Net cash provided by operating activities 495,209 591,141
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment -- (42,037)
Deposits on purchase options (75,000) (1,125,000)
Change in receivables from joint ventures (135,938) 20,398
-------------- -------------
Net cash used in investing activities (210,938) (1,146,639)
-------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit -- 1,000,000
Repayment of debt (400,000) (1,000,000)
-------------- -------------
Net cash used in financing activities (400,000) --
-------------- -------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (115,729) (555,498)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 438,800 1,092,178
-------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 323,071 $ 563,680
============== =============
See notes to unaudited condensed consolidated financial statements.
-6-
FULL HOUSE RESORTS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Condensed Consolidated Financial Statements - The interim
condensed consolidated financial statements of Full House Resorts, Inc.
(the "Company") included herein reflect all adjustments which are, in
the opinion of management, necessary to present fairly the financial
position and results of operations for the interim periods presented.
All such adjustments are of a normal recurring nature. Certain
information and note disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted pursuant to
the rules and regulations of the Securities and Exchange Commission.
These unaudited condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1999. The results of operations for the
three and nine month periods ended September 30, 2000 are not
necessarily indicative of the results to be expected for the year
ending December 31, 2000.
Consolidation - The unaudited condensed consolidated financial
statements include the accounts of the Company and all its
majority-owned subsidiaries. All material intercompany accounts and
transactions have been eliminated.
Reclassifications - Certain prior year amounts have been reclassified
to conform with the current year presentation.
2. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Investments and Hedging Activities."
This statement establishes accounting and reporting standards for
derivative investments, including certain derivative investments
embedded in other contracts, and hedging activities. It requires that
an entity recognizes all derivatives either as assets or liabilities in
the statement of financial position, and measures those instruments at
fair value, and is effective for all fiscal quarters of the fiscal
years beginning after June 15, 2000. This is a complex accounting
standard; however, the Company does not expect the adoption of this
statement to have a material impact on the consolidated financial
statements of the Company.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No, 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 clarifies existing accounting
principles related to revenue recognition in financial statements. The
Company is required to comply with the provisions of SAB 101 by the
fourth quarter of 2000. Due to the nature of the Company's operations,
management does not believe that SAB 101 will have a significant impact
on the Company's consolidated financial statements.
-7-
3. SEGMENT INFORMATION
The Company has two primary business segments. The Joint Venture
segment includes the ventures with GTECH Corporation ("GTECH"), and the
Corporate segment reflects the administrative and development expenses
of the Company's other business.
SUMMARY INFORMATION FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30,
2000 Joint
Ventures Corporate Consolidated
-------------- ------------- ------------
Revenues $ 1,132,115 $ -- $1,132,115
Pre-opening costs 255,188 -- 255,188
Income (loss) from operations 735,360 (455,381) 279,979
Net income (loss) $ 525,535 $ (465,342) $ 60,193
1999 Joint
Ventures Corporate Consolidated
-------------- ------------- ------------
Revenues $ 955,684 $ -- $ 955,684
Pre-opening costs 92,139 -- 92,139
Income (loss) from operations 736,978 (545,687) 191,291
Net income (loss) $ 614,607 $ (281,493) $ 333,114
SUMMARY INFORMATION FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30,
2000 Joint
Ventures Corporate Consolidated
-------------- ------------- ------------
Revenues $ 2,899,428 $ -- $2,899,428
Pre-opening costs 512,781 -- 512,781
Income (loss) from operations 1,961,946 (1,362,849) 599,097
Net income (loss) $ 1,423,599 $ (1,398,712) $ 24,887
1999 Joint
Ventures Corporate Consolidated
-------------- ------------- ------------
Revenues $ 2,784,249 $ -- $2,784,249
Pre-opening costs 157,245 -- 157,245
Income (loss) from operations 2,427,303 (1,621,685) 625,618
Net income (loss) before cumulative
effect of change in accounting
principle 1,884,636 (1,349,505) 535,131
Accounting change, net (543,870) -- (543,870)
Net income (loss) $ 1,340,766 $ (1,349,505) $(8,739)
-8-
4. JOINT VENTURE INVESTMENTS
The Company has four joint ventures with GTECH. The Delaware venture
manages a slot operation at Harrington Raceway in Harrington. The
Oregon venture developed the Mill Casino in North Bend for the Coquille
Indian Tribe. The Michigan venture, which has a management agreement
with a Tribe in Battle Creek, and the California venture, which has an
agreement with a Tribe in Thermal are both still in the development
stage. Successful development and, ultimately, sustaining profitable
operations is dependent upon future events, including appropriate
regulatory approvals and adequate market demand. These two ventures
have not generated any revenues, and the costs incurred to date relate
to pre-opening expenses such as payroll, legal, and consulting.
SUMMARY INFORMATION FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30,
2000 Delaware Oregon Michigan California
------------ ---------- ---------- ----------
Revenues $ 4,376,355 $ 655,602 $ -- $ --
Income (loss) from operations 1,612,829 651,402 (465,159) (45,218)
Net income (loss) $ 1,612,829 $ 651,402 $ (465,159) $ (45,218)
1999 Delaware Oregon Michigan California
------------ ---------- ---------- ----------
Revenues $ 3,218,788 $ 650,846 $ -- $ --
Income (loss) from operations 1,271,218 640,148 (188,458) 4,180
Net income (loss) $ 1,271,218 640,148 $ (188,458) $ 4,180
SUMMARY INFORMATION FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30,
2000 Delaware Oregon Michigan California
------------ ---------- ---------- ----------
Revenues $11,341,554 $1,799,978 $ -- $ --
Income (loss) from operations 4,009,667 1,789,189 (936,307) (89,256)
Net income (loss) $ 4,009,667 $1,789,189 $ (936,307) $ (89,256)
1999 Delaware Oregon Michigan California
------------ ---------- ---------- ----------
Revenues $ 9,185,334 $1,774,225 $ -- $ --
Income (loss) from operations 3,836,590 1,731,907 (278,598) (35,892)
Cumulative effect of change
in accounting principle (9,157) (137,351) (1,260,818) (240,765)
Net income (loss) $ 3,827,433 $1,594,556 $(1,539,416) $ (276,657)
These joint venture entities are treated as partnerships for tax
purposes and consequently, no tax provision / benefit is recognized at
the venture level.
-9-
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Three and Nine Months Ended September 30, 2000 Compared to Three and Nine Months
Ended September 30, 1999.
Joint Ventures Income. Joint Venture income increased $176,431, or
18.5% for the three month period and $115,179 or 4.1% for the nine month period
as compared to the same periods in 1999. These increases are primarily due to
the opening of an expansion at Midway Slots in Delaware.
Oregon Joint Venture. The Company's share of income, before the
cumulative effect of the change in accounting principle, from the Oregon joint
venture was $325,701, an increase of 1.8% for the three month period, and
$894,595, an increase of 3.3% for the nine month period. These increases were
achieved despite a reduction in the venture's fee structure from 13% of revenue
to 12%, in accordance with the management agreement. The continued growth in the
market, along with the opening of a small hotel, contributed to revenue
increases at the facility that more than offset the fee percentage reduction.
Delaware Joint Venture. The Company's share of income, before the
cumulative effect of the change in accounting principle, from the Delaware joint
venture was $806,414, an increase of 26.9%, for the three month period, and
$2,004,833, an increase of 4.5% for the nine month period. The increase for the
quarter was driven by the expansion of gaming capacity from 742 units to 1,150
units. The resulting revenue and operating income increases translated into
higher management fees for the venture. For the nine month period, the current
quarter increase more than offset the declines of the earlier part of the year
which were primarily caused by inclement weather, expansion expenses, and legal
costs.
California and Michigan Joint Ventures. The Company's share of
pre-opening costs from the California and Michigan joint ventures increased by
$163,049 and $355,536 for the respective three and nine month periods ended
September 30, 2000. The majority of these increases was due to increased
activities related to the Huron Potawatomi Tribe in Battle Creek, primarily for
land options, payroll, legal, licensing and other expenses in connection with
assisting the Tribe in obtaining suitable land for its gaming facility, and
applying for the necessary licenses and approvals. The California venture has
also incurred higher costs this year as the parties worked toward Congressional
approval of a land settlement agreement and began efforts to obtain a gaming
compact. These joint venture companies are still in the development stage and do
not have operating revenues.
General and Administrative Expenses. General and administrative
expenses decreased by $75,253 and $216,746 for the respective three and nine
month periods ended September 30, 2000. These decreases are primarily due to
decreased legal and professional fees associated with the Company's efforts to
develop the Biloxi, Mississippi project.
Interest Expense. Interest expense increased by $21,886 and $62,333 for
the three and nine month periods, respectively, due to an increase in
outstanding indebtedness, coupled with an increase in interest rates.
Interest and Other Income. The significant decrease in interest and
other income for the three and nine month periods is primarily due to proceeds
received during the third quarter of 1999 from the settlement of outstanding
litigation in connection with the Company's land in Mississippi.
-10-
Income Tax Provision. Income tax expense increased by $77,098 and
$146,544 for the respective three and nine month periods primarily due to
changes in deferred tax balances. The effective tax rate reflects a combination
of state taxes on joint venture earnings and the tax effect off non-deductible
amortization expenses. For federal tax purposes the Company has net operating
loss carryforwards of approximately $4,100,000, which may be carried forward to
offset future taxable income. The loss carryforwards expire in 2009 through
2019. The availability of the loss carryforwards may be limited in the event of
a significant change in ownership of the Company or its subsidiaries.
Cumulative Effect of Change in Accounting Principle. In April 1998, The
Accounting Standards Executive Committee of the American Institute of Public
Accountants issued Statement of Position 98-5, "Reporting on the Costs of Start
- - Up Activities." It requires that the costs of start-up activities that had
been previously capitalized, be expensed as incurred. During the first quarter
of 1999, the Company expensed $824,045 of such costs that had been previously
incurred by its joint venture investments, net of the related tax benefit of
$280,175.
Quantitative And Qualitative Disclosure About Market Risk. Market risk
is the risk of loss from changes in market rates or prices, such as interest
rates and commodity prices. We are exposed to market risk in the form of changes
in interest rates and the potential impact such changes may have on our variable
rate debt. The Company has not invested in derivative based financial
instruments.
Liquidity and Capital Resources
At September 30, 2000, the Company had cash and cash equivalents of
$323,071. For the nine months ended September 30, 2000, cash of $495,209 was
provided by operating activities, as compared to $591,141 in the prior year
period. The decline is primarily due to the non recurring litigation settlement
received in 1999. Net cash used in investing activities was $210,938, primarily
for purchase option deposits related to the Biloxi project, and advances to the
joint ventures. In the prior year period, investing activities used $1,146,639
primarily for purchase option deposits related to the Biloxi project. Financing
activities used $400,000 during the current year period for repayment of bank
borrowings, while during the prior year period a temporary draw on the line of
credit was also repaid As a result of these factors, there was a net decrease in
cash and cash equivalents of $115,729 during the nine months ended September 30,
2000.
The current portion of long term debt represents the $3,000,000 balance
on the GTECH note as well as $350,000 due under the bank line of credit. The
Company expects to repay the bank line in full prior to year-end with cash from
operations. We have also begun discussions concerning the refinancing or
extension of the GTECH note and expect a favorable resolution.
The Michigan joint venture, as part of its management agreement with
the tribe, has advanced funds for tribal operations and the construction of a
tribal community center. The increase in notes receivable - joint venture is
primarily attributable to this funding, and the repayment obligation is
dependent on the future profitable operation of the tribe's gaming enterprise.
Full House is a party to a series of agreements with GTECH Corporation,
a leading supplier of computerized systems and services for
government-authorized lotteries, to jointly pursue certain gaming opportunities.
Pursuant to the agreements, joint venture companies equally owned by GTECH and
Full House have been formed. Full House has contributed its rights to the North
Bend, Oregon facility and the rights to develop the Torres Martinez,
Nottawaseppi Huron Band of Potawatomi and Delaware State Fair projects to the
joint venture companies. GTECH has contributed cash and other intangible assets
and has
-11-
agreed to loan the joint venture entities up to $16.4 million to complete the
North Bend, Oregon and Delaware facilities. Full House has agreed to guarantee
one-half of the obligations of the joint venture companies to GTECH under these
loans and has guaranteed to GTECH one-half of a $2.0 million loan to the North
Bend, Oregon Indian Tribe. GTECH also provides project management, technology
and other expertise to analyze and develop/manage the implementation of
opportunities developed by the joint venture entities. GTECH has also loaned
Full House $3 million, which loan was convertible, until January 1998 into
600,000 shares of Full House Common Stock. The loan conversion clause expired
without exercise. The note bears interest at prime. Interest is paid monthly and
the unpaid principal and interest are due on January 25, 2001. In addition, Full
House has been reimbursed by one of the joint venture companies for certain
advances and expenditures made by Full House relating to the gaming development
agreements. As part of this transaction, Allen E. Paulson, William P. McComas
and Lee Iacocca have granted to GTECH an option, which expires December 29,
2000, to purchase their shares should they propose to transfer the same. The
parties are no longer required to present gaming opportunities to the other for
joint development.
As a result of its agreements with GTECH, receipt by Full House of
revenues from the joint venture projects is governed by the terms of the related
agreements applicable to such projects. These contracts provide that net cash
flow (after certain deductions) is to be distributed monthly to Full House and
GTECH. While Full House does not believe that this arrangement will adversely
impact its liquidity, the Company's continuing cash flow is dependent on the
operating performance of its joint ventures, and the ability to receive monthly
distributions.
The Company has a $2 million line of credit with Coast Community Bank
in Mississippi. The line bears interest at prime plus 1/2%, with interest
payable monthly. Any outstanding principal is due at maturity in February 2001.
At September 30, 2000, there was $350,000 outstanding at a rate of 9.75%.
In November 1998, the Company executed a series of agreements with Hard
Rock Cafe International related to the proposed development project in Biloxi,
Mississippi. Pursuant to a licensing agreement, the Company has the right to
develop and operate a Hard Rock Casino in Biloxi. The Company has paid a
territory fee of $2,000,000.
In September 1998, the Company and Allen E. Paulson formed a limited
liability company, equally owned, for the purpose of developing this project.
Mr. Paulson agreed to contribute a gaming vessel (the former Treasure Bay barge
in Tunica, MS.), and the Company agreed to contribute its rights to the Hard
Rock agreements. This entity plans to develop the Hard Rock - Biloxi and is
currently exploring various financing alternatives. The project, as currently
envisioned, is expected to cost between $250 and $300 million. Substantial
additional financing will be required for the Company to effect its business
strategy and no assurance can be given that such financing will be available
upon commercially reasonable terms, or at all.
As of September 30, 2000, Full House had cumulative undeclared and
unpaid dividends in the amount of $1,732,500 on the 700,000 outstanding shares
of its 1992-1 Preferred Stock. Such dividends are cumulative whether or not
declared, and are currently in arrears.
This report contains certain forward-looking statements made pursuant
to the Private Securities Litigation Reform Act of 1995. The words "believe,"
"expect," "intend," and similar expressions identify forward-looking statements.
These statements are subject to risks and uncertainties discussed in this report
and in our other filings with the Securities and Exchange Commission.
-12-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In the Allen E. Paulson vs. Jefferies & Company litigation, (more fully
described in the 10-QSB for the period ended March 30, 2000), which
includes a Third Party Complaint filed by Jefferies against the Company
on the basis of actions taken by Mr. Paulson, we filed our Answer and
Counterclaims with the court on August 24, 2000, denying all claims. We
also filed claims against Mr. Paulson for indemnification in the
Jeffries litigation, among other claims.
Item 3. Defaults upon Senior Securities
As of September 30, 2000, cumulative dividends were $1,732,500, which
were undeclared, unpaid and were in arrears, with respect to the
Company's Series 1992-1 Preferred Stock, which class ranks prior to the
Company's Common Stock with regard to dividend and liquidation rights.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27.1 Financial Data Schedule
(b) Reports on Form 8-K;
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
FULL HOUSE RESORTS, INC.
Date: November 11, 2000
By /s/ MICHAEL P. SHAUNNESSY
--------------------------------------------
Michael P. Shaunnessy, Executive V.P.- Finance
(Principal Accounting and Financial Officer)
-13-
EXHIBIT INDEX
Exhibit Description
- ------- -----------
27.1 Financial Data Schedule
-14-