<PAGE> 1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
Commission File Number: 0-8698
------
Concorde Gaming Corporation
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-0716683
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3290 Lien Street
Rapid City, South Dakota 57702
----------------------------------------
(Address of principal executive offices)
(605) 341-7738
---------------------------
(Issuer's telephone number)
Not Applicable
--------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of August 12, 1997, there
were 21,929,793 shares of the issuer's $.01 par value common stock outstanding.
Transitional Small Business Disclosure Format (check one): Yes ( ) No (X)
<PAGE> 2
INDEX
CONCORDE GAMING CORPORATION
and Subsidiaries
PART 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial Statements Page No.
<S> <C>
Condensed Consolidated Balance Sheet
at June 30, 1997 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Condensed Consolidated Statements of Operations for
Three Months Ended June 30, 1997 and 1996 and
for Nine Months Ended June 30, 1997 and 1996 (unaudited) . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Stockholders'
Equity for the Periods Ended June 30, 1997,
September 30, 1996 and June 30, 1996 (unaudited) . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows for
Nine Months Ended June 30, 1997 and 1996 (unaudited) . . . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements
(unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . 9
PART II - OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
<PAGE> 3
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1997
(unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Current assets:
Cash $ 3,854,491
Trade receivables 10,662
Prepaid expenses 44,874
-----------
Total current assets $ 3,910,027
-----------
Investments and long-term receivables:
Notes receivable pending asset exchange transfer $ 1,601,333
Other 242,602
-----------
$ 1,843,935
-----------
Property and equipment, at cost:
Land $ 50,000
Building and improvements 205,511
Furniture and equipment 147,692
Leasehold improvements 47,747
Vehicles 48,274
-----------
$ 499,224
Less accumulated depreciation (94,317)
-----------
$ 404,907
-----------
Intangibles:
Casino development and financing costs, net $ 334,921
Other, principally goodwill, net 16,713
-----------
$ 351,634
-----------
$ 6,510,503
===========
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE> 4
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
June 30, 1997
(unaudited)
<TABLE>
<CAPTION>
Liabilities and Stockholder's Equity
<S> <C>
Current liabilities:
Current maturities of long-term debt $ 538,903
Accounts payable 60,229
Accrued expenses 64,648
Income tax payable 312,890
-----------
Total current liabilities $ 976,670
-----------
Long-term debt, less current maturities $ 16,925
-----------
Deferred income taxes $ 46,600
-----------
Stockholders' equity:
Common stock, par value $.01 per share; authorized
500,000,000 shares; issued 21,929,793 at June 30, 1997 $ 219,298
Preferred stock, par value $.01 per share; authorized
10,000,000 shares; no shares issued and outstanding 0
Additional paid-in capital 3,660,649
Retained earnings 1,737,193
-----------
$ 5,617,140
Less stock subscription in the form of a note
and related accrued interest receivable (146,832)
-----------
$ 5,470,308
-----------
$ 6,510,503
===========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE> 5
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, 1997 and 996, and Nine Months Ended June 30, 1997
and 1996
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, 1997 and 1996 June 30, 1997 and 1996
----------------------------------------- ---------------------------------------
1997 1996 1997 1996
------------------- ------------------- ----------------- --------------------
<S> <C> <C> <C> <C>
Revenues:
Video lottery $ 1,795,371 $ 2,247,368 $ 5,632,308 $ 6,891,024
Management agreement 0 467,047 208,371 1,381,600
Other 14,797 93,171 40,698 138,087
------------------- ------------------- ----------------- --------------------
$ 1,810,168 $ 2,807,586 $ 5,881,377 $ 8,410,711
------------------- ------------------- ----------------- --------------------
Costs and expenses:
Video lottery state share $ 895,478 $ 1,118,724 $ 2,803,014 $ 3,426,571
Video lottery location share 585,566 706,521 1,864,857 2,203,932
Compensation expenses 207,131 269,663 689,253 707,553
Business development costs 50,824 18,797 117,226 55,083
Depreciation and amortization 99,970 125,677 431,300 457,007
Operating expenses 130,272 372,199 578,129 963,802
------------------- ------------------- ----------------- --------------------
Total costs and expenses $ 1,969,241 $ 2,611,581 $ 6,483,779 $ 7,813,948
------------------- ------------------- ----------------- --------------------
Operating income (loss) $ (159,073) $ 196,005 $ (602,402) $ 596,763
------------------- ------------------- ----------------- --------------------
Other income (expense):
Interest income $ 62,157 $ 189,068 $ 94,706 $ 482,429
Gain/(loss) on sale of equipment 24,537 0 44,446 (6,731)
Gain on termination of
management agreement 0 0 2,819,750 0
Other income 7,425 17,163 31,630 20,046
(16,059) (181,551) (259,775) (627,865)
------------------- ------------------- ----------------- --------------------
$ 78,060 $ 24,680 $ 2,730,757 $ (132,121)
------------------- ------------------- ----------------- --------------------
Income (loss) before income taxes $ (81,013) $ 220,685 $ 2,128,355 $ 464,642
Federal and state income taxes (benefit) $ (27,400) $ 74,100 $ 741,700 $ 161,900
------------------- ------------------- ----------------- --------------------
Net income (loss) $ (53,613) $ 146,585 $ 1,386,655 $ 302,742
=================== =================== ================= ====================
Net income (loss) per common and
common equivalent share $0.00 $0.01 $0.06 $0.01
=================== =================== ================= ====================
Weighted average number of common and
common equivalent shares outstanding 21,929,793 22,374,843 22,096,947 22,097,274
=================== =================== ================= ====================
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 6
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Periods Ended June 30, 1997, September 30, 1996 and June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Number of
Common Additional
Shares Common paid-in Retained
Outstanding stock capital earnings
------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Balance, September 30, 1995 26,755,193 $ 267,552 $ 3,868,775 $ (207,121)
Net income 0 0 0 302,742
Issuance of warrant for 80,000 shares of common
stock in connection with note payable 0 0 1,600 0
Interest earned on note receivable 0 0 28,608 0
Principal payments received on note receivable 0 0 0 0
------------- --------------- ---------------- ---------------
Balance, June 30, 1996 26,755,193 267,552 3,898,983 95,621
Net income 0 0 0 254,917
Interest earned on note receivable 0 0 8,564 0
Principal payments received on note receivable 0 0 0 0
------------- --------------- ---------------- ---------------
Balance, September 30, 1996 26,755,193 267,552 3,907,547 350,538
Net income 0 0 0 1,386,655
Cancellation of 4,825,400 shares of common stock
related to liquidation of subsidiary into parent (4,825,400) (48,254) (269,348) 0
Interest earned on note receivable 0 0 22,450 0
Principal payments received on note receivable 0 0 0 0
============= =============== ================ ===============
Balance, June 30, 1997 21,929,793 $ 219,298 $ 3,660,649 $ 1,737,193
============= =============== ================ ===============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
Stock
subscription
in the form
of a note
and related
interest Treasury
receivable stock Total
---------------- --------------- ----------------
<S> <C> <C> <C>
Balance, September 30, 1995 $ (226,032) $ (317,602) $ 3,385,572
Net income 0 0 302,742
Issuance of warrant for 80,000 shares of common
stock in connection with note payable 0 0 1,600
Interest earned on note receivable 311 0 28,919
Principal payments received on note receivable 30,576 0 30,576
---------------- --------------- ----------------
Balance, June 30, 1996 (195,145) (317,602) 3,749,409
Net income 0 0 254,917
Interest earned on note receivable 113 0 8,677
Principal payments received on note receivable 11,155 0 11,155
---------------- --------------- ----------------
Balance, September 30, 1996 (183,877) (317,602) 4,024,158
Net income 0 0 1,386,655
Cancellation of 4,825,400 shares of common stock
related to liquidation of subsidiary into parent 0 317,602 0
Interest earned on note receivable 373 0 22,823
Principal payments received on note receivable 36,672 0 36,672
================ =============== ================
Balance, June 30, 1997 $ (146,832) $ 0 $ 5,470,308
================ =============== ================
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 7
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,386,655 $ 302,742
Adjustments to reconcile net income to net cash flows
provided by operating activities:
Depreciation and amortization 431,300 457,007
Warrants issued 0 1,600
(Gain) on termination of management agreement (2,819,750) 0
(Gain) loss on sale of property and equipment, real estate (29,286) 6,733
Proceeds from termination of management agreement 2,851,061 0
Other (4,866) (15,000)
Changes in assets and liabilities:
Receivables - trade, management agreement, and interest 250,292 11,738
Prepaid expenses 9,795 (25,476)
Accounts payable and accrued expenses (346,505) 140,959
Income taxes payable 186,290 51,382
----------- -----------
Net cash provided by operating activities $ 1,914,986 $ 931,685
----------- -----------
Cash flows from investing activities:
Advances on long-term receivables $ (10,682) $ (84,500)
Principal payments received on long-term receivables 5,766,985 1,466,608
Proceeds from sale of property and equipment, real estate 100,764 40,304
Purchase of property and equipment (45,525) (391,420)
Payments for casino development costs (71,240) (173,325)
Other (17,098) (38,000)
----------- -----------
Net cash provided by investing activities $ 5,723,204 $ 819,667
----------- -----------
Cash flows from financing activities:
Proceeds from long-term borrowing $ 20,201 $ 812,992
Principal payments on long-term debt (3,388,967) (3,409,244)
Net change in short-term borrowings (595,000) 415,000
Payments received on stock subscription in the form of a
note and related interest receivable 59,495 59,495
----------- -----------
Net cash (used in) financing activities $(3,904,271) $(2,121,757)
----------- -----------
Net increase (decrease) in cash $ 3,733,919 $ (370,405)
Cash:
Beginning 120,572 520,438
----------- -----------
Ending $ 3,854,491 $ 150,033
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 8
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Nine Months Ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
---------- --------
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash payments for: Interest $ 388,849 $573,562
========== ========
Income taxes $ 545,000 $105,000
========== ========
Supplemental schedule of noncash investing and financing activities:
Cancellation of treasury stock $ 317,602
==========
Property and equipment acquired by incurring account payable $ 20,549
==========
Note receivable equal to the book value of video lottery assets that
were exchanged for casino assets
subsequent to June 30, 1997 $1,593,133
==========
Property and equipment acquired by issuance of long-term debt $ 190,000
==========
Property and equipment acquired by incurring accounts payable $ 17,556
==========
Investment in unconsolidated affiliate acquired in exchange for
notes receivable and accrued interest $ 192,287
==========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 9
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1997
(unaudited)
(1) Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements
of Concorde Gaming Corporation and its majority- owned subsidiaries
(the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and
the rules and regulations of the U.S. Securities and Exchange
Commission. Accordingly, they do not include all of the information
and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the nine month period ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the
year ending September 30, 1997.
The accompanying condensed consolidated financial statements, and
related notes thereto, should be read in conjunction with the audited
financial statements of the Company, and notes thereto, for the year
ended September 30, 1996 included in the Company's 1996 Annual Report
on Form 10-KSB.
(2) Asset Exchange Agreement
On, June 12, 1997, the Company entered into an Asset Exchange
Agreement (the "Agreement") with North Star Casino Limited Liability
Company ("North Star"), Concorde Gaming of South Dakota, Inc., Midwest
Gaming, Inc. and Concorde Cripple Creek, Inc. The Agreement provided
for the exchange of substantially all of the assets related to North
Star's business of owning and operating the Golden Gates Casino in
Black Hawk, Colorado (the "Casino Assets"), for the Company's assets
used in its South Dakota video lottery route business (the "Video
Lottery Assets"), $870,000 in cash, subject to adjustment, the
assumption of $380,000 in liabilities and the issuance of 1,743,333
shares of common stock to North Star.
The transfer of the Video Lottery Assets was completed on June 16,
1997. The Agreement provided that the Casino Assets would be
transferred upon the receipt by the Company of a license to operate
the Golden Gates Casino. At the time of the transfer of the Video
Lottery Assets, North Star executed a promissory note in favor of the
Company in the principal amount of $1.6 million due December 31, 1997,
payable in the event the gaming license was not received by September
1, 1997. As of June 30, 1997, the gaming
7
<PAGE> 10
license had not been received and as a result the book value of the
Video Lottery Assets is reflected as a note receivable at June 30,
1997.
Subsequent to June 30, 1997, the Company received the gaming license
and effective July 21, 1997, the Casino Assets were transferred to the
Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The statements contained in this report, if not historical, are
forward looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and involve risks and uncertainties that could
cause actual results to differ materially from the financial results described
in such forward looking statements. These risks and uncertainties include,
among others, the level and rate of growth in the Company's operations. The
success of the Company's business operations is in turn dependent on factors
such as the effectiveness of the Company's marketing strategies to grow its
customer base, general competitive conditions within the gaming industry and
general economic conditions. Further, any forward looking statement or
statements speak only as of the date on which such statement was made, and the
Company undertakes no obligation to update any forward looking statement, or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events.
Therefore, forward-looking statements should not be relied upon as a prediction
of actual future results.
OVERVIEW
The management agreement ("Management Agreement") between Bruce H.
Lien Company ("BHLC"), a wholly owned subsidiary of the Company, and the Three
Affiliated Tribes ("TAT") relating to the 4 Bears Casino & Lodge (the "Casino")
was terminated upon the closing of a settlement agreement (the "Settlement
Agreement") effective February 13, 1997. In addition, on June 16, 1997, the
Company transferred its Video Lottery Assets to North Star. As a result of
these two transactions, the Company will not receive any future revenues from
the Casino or the Video Lottery Assets.
RESULTS OF OPERATIONS
Three Months ended June 30, 1997 Compared to Three Months ended June 30, 1996
Revenues. Total revenues decreased 35.5% to $1,810,168 for the three
months ended June 30, 1997, compared to $2,807,586 for the three months ended
June 30, 1996 as a result of decreases in revenues from the Management
Agreement and video lottery operations. As a result of the closing of the
Settlement Agreement the Company did not record any revenues from the
Management Agreement for the three months ended June 30, 1997, compared to
$467,047 for the three months ended June 30, 1996. Video lottery revenues
decreased 20.1% to $1,795,371 for the three months ended June 30, 1997,
compared to $2,247,368 for the three months ended June
8
<PAGE> 11
30, 1996, due primarily to the transfer of the Video Lottery Assets to North
Star on June 16, 1997.
Costs and expenses. Total costs and expenses decreased 24.6% to
$1,969,241 for the three months ended June 30, 1997, compared to $2,611,581 for
the three months ended June 30, 1996 as a result of decreases in video lottery
state share, video lottery location share, compensation expenses, depreciation
and amortization and operating expenses as a result of the Settlement Agreement
and the transfer of the Video Lottery Assets.
Other Income and Expense. Interest expense and financing costs
decreased 91.1% to $16,059 for the three months ended June 30, 1997, compared
to $181,551 for the three months ended June 30, 1996, a result of the Company
having reduced its notes payable to $555,828 as of June 30, 1997, compared to
$5,608,462 at June 30, 1996. Interest income decreased 67.1% to $62,157 for
the three months ended June 30, 1997, compared to $189,068 for the three months
ended June 30, 1996, due primarily to the retirement of the interest bearing
receivable relating to the Casino.
Federal and State Income Taxes. The Company has recorded a Federal
and State income tax benefit of $27,400 for the three months ended June 30,
1997, compared to income tax expense of $74,100 for the three months ended June
30, 1996. The Company records income tax expense using the estimated effective
tax rate for the fiscal year. The Company records an income tax benefit using
the estimated effective rate for the fiscal year if the amount of loss incurred
is reasonably expected to be offset by future income, or is available for carry
back to previous years.
Nine Months ended June 30, 1997 Compared to Nine Months ended June 30, 1996
Revenues. Total revenues decreased 30.0% to $5,881,377 for the nine
months ended June 30, 1997, compared to $8,410,711 for the nine months ended
June 30, 1996 as a result of decreases in revenues from the Management
Agreement and video lottery operations. Revenues from the Management Agreement
decreased to $208,371 for the nine months ended June 30, 1997, compared to
$1,381,600 for the nine months ended June 30, 1996 due to the closing of the
Settlement Agreement in February 1997 and the decreased profitability of the
Casino due to extreme winter weather in the North Dakota area. Video lottery
revenues decreased 18.3% to $5,632,308 for the nine months ended June 30, 1997,
compared to $6,891,024 for the nine months ended June 30, 1996 due to decreases
in the average number of machines placed in locations, a decrease in the
average revenue generated by each video lottery machine, and the transfer of
the Video Lottery Assets to North Star on June 16, 1997.
Costs and expenses. Total costs and expenses decreased 17.0% to
$6,483,779 for the nine months ended June 30, 1997, compared to $7,813,948 for
the nine months ended June 30, 1996 as a result of decreases in video lottery
state share, video lottery location share, compensation expenses, depreciation
and amortization and operating expenses as a result of the Settlement Agreement
and the transfer of the Video Lottery Assets.
9
<PAGE> 12
Other Income and Expense. Interest expense and financing costs
decreased 58.6% to $259,775 for the nine months ended June 30, 1997, compared
to $627,865 for the nine months ended June 30, 1996, a result of the Company
having reduced its notes payable to $555,828 as of June 30, 1997, compared to
$5,608,462 at June 30, 1996. Interest income decreased 80.4% to $94,706 for
the nine months ended June 30, 1997, compared to $482,429 for the nine months
ended June 30, 1996 as the Company did not record any interest income on the
amounts due from TAT since September 30, 1996 in accordance with the terms of
the Settlement Agreement and due to the retirement of the interest bearing
receivable from the Casino.
Federal and State Income Taxes. The Company recorded Federal and
State income taxes of $741,700 for the nine months ended June 30, 1997,
compared to $161,900 for the nine months ended June 30, 1996. The Company
records income tax expense using the estimated effective tax rate for the
fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $3,854,491 at June 30,
1997, compared to $120,572 at September 30, 1996, an increase of $3,733,919.
The increase was the result of the cash received from the closing of the
Settlement Agreement after reduction of substantially all the Company's notes
payable. During the nine months ended June 30, 1997, the Company generated
$1,914,986 of cash flow from operating activities, compared to $931,685 during
the nine months ended June 30, 1996. The increase in cash flow from operating
activities is due primarily to the proceeds received in connection with the
closing of the Settlement Agreement.
Investing activities provided cash of $5,723,204 during the nine
months ended June 30, 1997, compared to $819,667 during the nine months ended
June 30, 1996. Principal payments on long-term receivables, which primarily
represent payments made in connection with the Settlement Agreement, provided
cash of $5,766,985 during the nine months ended June 30, 1997, compared to
$1,466,608 during the nine months ended June 30, 1996. Purchases of property
and equipment used cash of $45,525 during the nine months ended June 30, 1997,
compared to $391,420 during the nine months ended June 30, 1996.
Financing activities used cash of $3,904,271 during the nine months
ended June 30, 1997, compared to $2,121,757 during the nine months ended June
30, 1996. Principal payments on long-term debt used cash of $3,388,967 during
the nine months ended June 30, 1997, compared to $3,409,244 during the nine
months ended June 30, 1996. Proceeds from long-term borrowing provided $20,201
of cash flow during the nine months ended June 30, 1997, compared to $812,992
during the nine months ended June 30, 1996. The Company reduced its short-term
borrowings by $595,000 during the nine months ended June 30, 1997, compared to
an increase in short-term borrowings of $415,000 during the nine months ended
June 30, 1996.
10
<PAGE> 13
FUTURE OPERATIONS
Currently the Company has $3.8 million in cash and has substantially
reduced its liabilities. Management anticipates that cash on hand and cash flow
from the Golden Gates Casino will be sufficient to meet its current operating
requirements. However, as a result of the Settlement Agreement and the
completion of the transactions contemplated by the Asset Exchange Agreement, the
Company's only revenues are from the operation of the Golden Gates Casino and
two video lottery casinos in South Dakota that were not included in the North
Star transaction. The Company anticipates that the revenues and cash flow from
the Golden Gates Casino during the up coming winter months may not be sufficient
to cover the operating requirements of the Company.
The Company intends to actively pursue strategic acquisitions or
alliances in the gaming industry in the future. There is no assurance that the
Company will be successful in such an acquisition or expansion, be able to
obtain additional financing, or that increased profitability and cash flow
would result. The Company anticipates incurring additional expenses in order
to investigate future business opportunities.
11
<PAGE> 14
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
An Annual Meeting of Shareholders of the Company was held on June 20,
1997 for the purpose of electing directors, approving an amendment to the
Company's Amended and Restated Articles of Incorporation and to ratify the
appointment of the Company's independent auditors. The following sets forth
each of the proposals and the results of the meeting:
1. Proposal to elect three directors to the Board of Directors.
<TABLE>
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstained
<S> <C> <C> <C>
Bruce H. Lien 20,468,137 202,115 0
Deanna B. Lien 20,468,137 202,115 0
Jerry L. Baum 20,444,697 203,575 0
</TABLE>
2. Proposal to approve an amendment to the Company's Amended and
Restated Articles of Incorporation to comply with the
requirements of the Colorado Limited Gaming Act.
<TABLE>
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstained
<S> <C> <C>
20,444,697 20,375 176,400
</TABLE>
3. Proposal to ratify the Board of Directors' selection of KPMG
Peat Marwick LLP as the Company's independent auditors for the
fiscal year ending September 30, 1997.
<TABLE>
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstained
<S> <C> <C>
20,662,812 0 7,440
</TABLE>
12
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
11. Computation of Per Share Earnings
27. Financial Data Schedule (for EDGAR purposes only)
b. Reports on Form 8-K
1. A Form 8-K/A dated February 13, 1997 was filed under Item 2 on
April 29, 1997
2. A Form 8-K dated June 16, 1997 was filed under Item 2.
13
<PAGE> 16
Signatures:
In accordance with the requirements of the Exchange Act, the
registrant caused the report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CONCORDE GAMING CORPORATION
Date: August 15, 1997 By: /s/ David L. Crabb
-----------------------
David L. Crabb,
Chief Financial Officer
<PAGE> 17
EXHIBIT INDEX
Exhibit No. Description
11 Computation of Per Share Earnings
27 Financial Data Schedule (for EDGAR purposes only)
<PAGE> 1
EXHIBIT 11
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended June 30, Nine Months Ended June 30,
--------------------------------------- -------------------------------------
1997 1996 1997 1996
-------------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Weighted average shares outstanding, net of
treasury stock, beginning of period 21,929,793 21,929,793 21,929,793 21,929,793
Adjustments for common stock equivalents (1) 0 445,050 167,154 167,481
-------------------- ---------------- ----------------- -----------------
Weighted average common and common equivalent
shares outstanding, end of period 21,929,793 22,374,843 22,096,947 22,097,274
==================== ================ ================= =================
Net earnings $ (53,613) $ 146,585 $ 1,386,655 $ 302,742
==================== ================ ================= =================
Net earnings per common and common equivalent share $ 0.00 $ 0.01 $ 0.06 $ 0.01
==================== ================ ================= =================
</TABLE>
(1) Represents adjustments computed under the treasury stock method for stock
options and warrants granted at fair market value at date of grant. For
the three months ended June 30, 1997, stock options and warrants were
excluded due to their antidilutive effect.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1997
<CASH> 3,854,491
<SECURITIES> 0
<RECEIVABLES> 10,662
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,910,027
<PP&E> 499,224
<DEPRECIATION> 94,317
<TOTAL-ASSETS> 6,510,503
<CURRENT-LIABILITIES> 976,670
<BONDS> 0
0
0
<COMMON> 219,298
<OTHER-SE> 5,251,010
<TOTAL-LIABILITY-AND-EQUITY> 6,510,503
<SALES> 40,698
<TOTAL-REVENUES> 5,881,377
<CGS> 0
<TOTAL-COSTS> 6,483,779
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 259,775
<INCOME-PRETAX> 2,128,355
<INCOME-TAX> 741,700
<INCOME-CONTINUING> 1,386,655
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,386,655
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
