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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 1, 1997
Concorde Gaming Corporation
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(exact name of registrant as specified in its charter)
Colorado 0-8698 84-0716683
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3290 Lien Street
Rapid City, South Dakota 57702
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (605) 341-7738
Not Applicable
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
(a) On June 16, 1997, Concorde Gaming Corporation (the "Registrant")
completed the exchange of substantially all of the assets related to
its video lottery route operations in South Dakota (the "Video
Lottery Assets"), pursuant to the terms of an Asset Exchange
Agreement (the "Agreement") dated June 12, 1997 by and among the
Registrant, North Star Casino Limited Liability Company ("North
Star"), Concorde Gaming of South Dakota, Inc. ("Concorde South
Dakota"), a South Dakota corporation, Midwest Gaming, Inc. ("Midwest
Gaming"), a South Dakota corporation, and Concorde Cripple Creek,
Inc. ("Concorde Cripple Creek"), a Colorado corporation.
The Agreement provided that the Registrant will exchange its Video
Lottery Assets for substantially all of the assets of North Star
used in its business of owning and operating the Golden Gates Casino
in Black Hawk, Colorado (the "Casino Assets"). In addition, the
Registrant will pay $870,000 in cash, subject to adjustment, assume
approximately $380,000 in liabilities and issue 1,743,333 shares of
the Registrant's common stock.
A condition to the Registrant acquiring the Casino Assets is the
Registrant being licensed by the Colorado Gaming Commission on or
before September 1, 1997. In the event the Registrant is not
licensed by the Commission within such time period, North Star shall
be obligated to pay the Registrant $1.6 million for the Video
Lottery Assets pursuant to the terms of a promissory note due in
full on December 31, 1996.
The consideration received pursuant to the Agreement was determined
through arm's length negotiations.
(b) Not applicable
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Item 7. Financial Statements and Exhibits.
(a) Not applicable
(b) The pro forma financial information furnished herein reflects the
transfer of the Video Lottery Assets to North Star in consideration
for the $1.6 million promissory note, pending the Registrant's
receipt of a gaming license and the subsequent transfer of the
Casino Assets.
<TABLE>
<CAPTION>
Table of Contents:
<S> <C>
Introduction F-1
Pro Forma Condensed Consolidated Balance Sheet at March 31, 1997 F-2
Pro Forma Consolidated Statement of Operations for Six Months
Ended March 31, 1997 F-3
Pro Forma Consolidated Statement of Operations for the
Fiscal Year Ended September 30, 1996 F-4
Notes of Pro Forma Condensed Consolidated Financial Statements F-5
</TABLE>
(c) Exhibits
10. Asset Exchange Agreement dated June 12, 1997 by and among
the Registrant, North Star, Concorde South Dakota, Midwest
Gaming, and Concorde Cripple Creek (1)
20. Press Release dated June 16, 1997 (1)
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(1) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated July 1, 1997
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Pro Forma Financial Information
Pro Forma Condensed Consolidated Financial Statements of
Concorde Gaming Corporation
Adjusted for the Transfer of the Video Lottery Assets
Introduction
The following pro forma condensed consolidated balance sheet as of March 31,
1997 and the pro forma condensed consolidated statements of operations for the
fiscal year ended September 30, 1996 and for the six months ended March 31,
1997, give effect to the transfer of the Video Lottery Assets in consideration
for a promissory note for $1.6 million. The promissory note for $1.6 million
will be cancelled upon the Registrant's receipt of a gaming license prior to
September 1, 1997 and the transfer of the Casino Assets to the Registrant. The
statements include the adjustments described in the accompanying notes to the
pro forma condensed consolidated financial statements.
The pro forma condensed consolidated financial statements are not necessarily
indicative of the results which actually would have occurred if the transfer of
the Video Lottery Assets had taken place on the dates indicated, nor are they
necessarily indicative of future results. The pro forma condensed consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements of the Company filed with the Securities and
Exchange Commission in its Annual Report on Form 10-KSB for the fiscal year
ended September 30, 1996.
F-1
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Concorde Gaming Coporation
Pro Forma Condensed Consolidated Balance Sheet
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
Assets 3-31-97 Adjustments 3-31-97
--------------- ----------------- ---------------
<S> <C> <C> <C>
Current assets:
Cash $ 4,886,550 (a) $ (8,200) $ 4,878,350
Other current assets 101,903 (a) (52,807) 49,096
--------------- ---------------
Total current assets 4,988,453 4,927,446
--------------- ---------------
Investments and long-term receivables 236,331 (a) 1,600,000 1,836,331
--------------- ---------------
Property and equipment, net 1,685,443 (a) (1,244,958) 440,485
--------------- ---------------
Intangibles 673,344 (a) (329,211) 344,133
--------------- ---------------
$ 7,583,571 $ 7,548,395
=============== ===============
Liabilities and Stockholder's Equity
Current liabilities:
Current maturities of long-term debt $ 492,857 $ 492,857
Accounts payable 105,910 (a) (33,841) 72,069
Accrued expenses 259,503 259,503
Income tax payable 841,200 841,200
--------------- ---------------
Total current liabilities 1,699,470 1,665,629
--------------- ---------------
Long-term debt, less current maturities 333,412 333,412
--------------- ---------------
Deferred income taxes 46,600 46,600
--------------- ---------------
--------------- ---------------
Stockholders' equity 5,504,089 (a) (1,335) 5,502,754
--------------- ---------------
$ 7,583,571 $ 7,548,395
=============== ===============
</TABLE>
F-2
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Concorde Gaming Coporation
Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
CGSD & MGI total
March 31, 1997
Historical Pro Forma Pro Forma Pro Forma
3-31-97 Adjustments 3-31-97 Adjustments
--------------- ------------------ --------------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Video lottery $ 3,836,937 (b) $ (3,708,819) $ 128,118
Management agreement 208,371 (c) (208,371) 0
Other 25,901 (b) (10,037) 15,864
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4,071,209 143,982
Costs and expenses:
Video lottery state share 1,907,536 (b) (1,843,477) 64,059
Video lottery location share 1,279,291 (b) (1,279,291) 0
Compensation expense 482,122 (b) (163,160) 288,871
(c) (30,091)
Business development costs 66,402 66,402
Depreciation and amortization 331,330 (b) (262,577) 39,857
(c) (28,896)
Operating expenses 447,857 (b) (221,044) 182,301
(c) (44,512)
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Total costs and expenses 4,514,538 641,490
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Operating (loss) (443,329) (497,508)
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Other income (expense):
Interest income 32,549 (b) 38,210 70,759
(c) 0
Gain on termination of
management agreement 2,819,750 (c) (2,819,750) 0
Other 44,114 (b) (25,726) 18,039
(c) (349)
Interest expense and financing costs (243,716) (b) 45,901 2,643
(c) 200,458
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2,652,697 91,441
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Income before income taxes 2,209,368 (406,067)
Federal and state income taxes 769,100 (b) 42,400 (142,100)
(c) (953,600)
--------------- ---------------
Net income $ 1,440,268 $ (263,967)
=============== ===============
Net income per common and
common equivalent share 0.07 (0.01)
=============== ===============
Weighted average number of common and
common equivalent shares outstanding 22,180,524 22,180,524
=============== ===============
</TABLE>
F-3
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Concorde Gaming Coporation
Pro Forma Condensed Consolidated Statement of Operations
Fiscal Year Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
CGSD & MGI total
March 31, 1997
Historical Pro Forma Pro Forma Pro Forma
9-30-96 Adjustments 9-30-96 Adjustments
--------------- ------------------ --------------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Video lottery $ 8,985,467 (b) $ (8,818,352) $ 167,115
Management agreement 2,064,649 (c) (2,064,649) 0
Other 192,470 (b) (144,676) 47,794
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11,242,586 214,909
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Costs and expenses:
Video lottery state share 4,471,432 (b) (4,387,875) 83,557
Video lottery location share 2,891,852 (b) (2,891,852) 0
Compensation expense 981,536 (b) (403,474) 489,092
(c) (88,970)
Business development costs 74,786 74,786
Depreciation and amortization 636,331 (b) (535,086) 31,895
(c) (69,350)
Operating expenses 1,234,633 (b) (581,675) 364,320
(c) (288,638)
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Total costs and expenses 10,290,570 1,043,650
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Operating income 952,016 (828,741)
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Other income (expense):
Interest income 683,444 (b) 68,831 105,800
(c) (646,475)
Other 55,253 (b) 4,905 60,158
(c) 0
Interest expense and financing costs (794,054) (b) 115,429 (94,915)
(c) 583,710
--------------- ---------------
(55,357) 71,043
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Income before income taxes 896,659 (757,698)
Federal and state income taxes 339,000 (b) 9,800 (264,500)
(c) (613,300)
--------------- ---------------
Net income $ 557,659 $ (493,198)
=============== ===============
Net income per common and
common equivalent share 0.03 (0.02)
=============== ===============
Weighted average number of common and
common equivalent shares outstanding 22,175,415 22,175,415
=============== ===============
</TABLE>
F-4
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Concorde Gaming Coporation
Notes of Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
(a) To reflect the transfer of the Video Lottery Assets in conjunction with
the Asset Exchange Agreement and to report the consideration of the $1.6
million promissory note, pending the transfer of the Casino Assets:
<TABLE>
<S> <C>
Promissory note $ 1,600,000
Book value of Video Lottery Assets transferred:
Cash and other current assets (61,007)
Equipment (1,244,958)
Intangibles (329,211)
Accounts payable transferred 33,841
-------------
Loss on transfer of Video Lottery Assets $ (1,335)
=============
</TABLE>
(b) To reflect the reduction in revenues, expenses and net income from the
transfer of the Video Lottery Assets; and reflect the assumed interest
income earned on the promissory note. Assume interest income earned on
cash is 5% per annum.
(c) To reflect the reduction in operating and interest expenses from the
termination of the Management Agreement; and reflect assumed interest
income earned on cash proceeds remaining after reduction of notes payable.
Assume interest income earned on cash is 5% per annum. Interest income is
reduced by the actual interest earning on the note receivable from TAT.
F-5
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Signatures:
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CONCORDE GAMING CORPORATION
Date: August 29, 1997 By: /s/ David L. Crabb
--------------------------------
David L. Crabb
Chief Financial Officer
