U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1998
Transition report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934 for the transition period from to .
Commission File No. 1-4385
DUNES HOTELS AND CASINOS INC.
(Exact name of business issuer as specified in its charter)
NEW YORK 11-1687244
(State or other jurisdiction or I.R.S. Employer Identification No.
incorporation or organization)
4600 Northgate Boulevard, Suite 130, Sacramento, California 95834
(Address of principal executive offices)
(916) 929-2295
(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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 6,375,096 shares of common
stock, $.50 par value as of October 30, 1998.
Transitional Small Business Disclosure Format (check one): Yes No X
<PAGE>2
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
INDEX
Page
Part 1. Financial Information
Item 1. Financial Statements
-------------------------------
Consolidated Condensed Balance Sheets
September 30, 1998 and December 31, 1997 3
Consolidated Condensed Statements of Loss
for the three months ended September 30, 1998
and 1997 5
Consolidated Condensed Statements of Loss
for the nine months ended September 30, 1998
and 1997 7
Consolidated Condensed Statements of Cash Flows
for the nine months ended September 30, 1998
and 1997 9
Notes to Consolidated Condensed Financial
Statement, September 30, 1998 and 1997 10
Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations 13
---------------------------------------------
Part II. Other Information
Item 1. Legal Proceedings 17
Item 2. Changes in Securities 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
<PAGE>3
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
ASSETS
September December
30, 1998 31, 1997
----------- ---------
(Unaudited)
(Dollars in thousands)
Cash and cash equivalents $ 2,965 $ 4,299
Marketable securities 825 673
Receivables
Trade 32 3
Related party, less allowance of $1,899 in 1998 37
Real estate sales 389 469
Other, including officer, $85,000 in 1998 and 1997 88 92
Inventory of real estate held for sale 4,114 4,359
Prepaid expenses 142 122
Property and equipment, less accumulated
depreciation and amortization, 1998,
$565; 1997, $477 3,247 3,252
Investments 544 644
Deferred costs and other 3 124
---------- ----------
$ 12,386 $ 14,037
============== ==============
<PAGE>4
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
September December
30, 1998 31, 1997
--------- --------
(Unaudited)
(Dollars in thousands)
Accounts payable $ 11 $ 24
Accrued expenses 230 207
Deferred income 178
Income taxes 307 307
Short-term debt 80 60
Long-term debt and capitalized lease obligations 2,009 2,272
Accrued preferred stock dividends 1,227 1,173
------------------
Total liabilities
3,864 4,221
Minority interest 320 320
Shareholders' equity
Preferred stock - authorized 10,750,000 shares
($.50 par); issued 10,512 shares Series B $7.50
cumulative preferred stock, outstanding 9,250
shares in 1998 and 1997,
aggregate liquidation value $2,319 including
dividends in arrears 5 5
Common stock - authorized 25,000,000 shares ($.50 par);
issued 7,799,780 shares, outstanding 6,375,906
shares in 1998 and 1997 3,900 3,900
Capital in excess of par 25,881 25,881
Deficit (19,584) (18,290)
---------------------
10,202 11,496
Treasury stock at cost; Preferred-Series B
902 shares Common 1,424,684 shares in 1998 and 1997 2,000 2,000
----------------------
Total shareholders' equity 8,202 9,496
----------------------
$ 12,386 $ 14,037
=====================
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>5
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
1998 1997
----- -----
(Dollars in thousands, except
per share)
Operating revenues:
Sales of real estate $ 128 $ 6,627
Cost of real estate sold 122 6,144
-----------------------
6 483
-----------------------
Rental income - agricultural properties 11 120
Cost and expense of rental income 1 12
-----------------------
10 108
-----------------------
Rice drying and storage revenues 58 342
Cost of rice drying and storage 71 153
-----------------------
(13) 189
-----------------------
Miscellaneous income - net 18
-----------------------
3 798
-----------------------
Operating expenses:
Selling, administrative and general
Corporate 158 267
Real estate operations 67 72
Bad debts, net of recoveries (24)
Loss on real estate investments 100 400
Depreciation 33 17
-----------------------
358 732
-----------------------
Loss before other credits (charges), income taxes and
minority interest (355) 66
-----------------------
Other credits (charges):
Interest and dividend income 65 83
Interest expense (55) (17)
Securities gains (losses), net (11) 24
Other (23) 16
----------------------
(24) 106
----------------------
<PAGE>6
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
1998 1997
---------- ----------
Dollars in thousands, except
per share)
Income taxes (9)
Loss before minority interest (388) 172
Minority interest in income of the White Ranch ----- (234)
------------ -----------
Net income (loss) $ (388) $ (62)
============= ===========
Income (loss) per common share: $ (0.06) $ (0.01)
============= ===========
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>7
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
1998 1997
------------- --------------
(Dollars in thousands, except
per share)
Operating revenues:
Sales of real estate $ 383 $ 7,074
Cost of real estate sold 380 6,572
------------ --------------
3 502
------------ --------------
Rental income - agricultural properties 41 425
Cost and expense of rental income 3 95
------------ --------------
38 330
------------ --------------
Rice drying and storage revenues 114 412
Cost of rice drying and storage 290 344
------------ --------------
(176) 68
------------ --------------
Miscellaneous income - net 55
------------ --------------
(135) 955
------------ --------------
Operating expenses:
Selling, administrative and general
Corporate 613 825
Real estate operations 143 165
Bad debts, net of recoveries 100
Loss on real estate investments 100 400
Depreciation 96 52
------------ --------------
952 1,542
------------ --------------
Loss before other credits (charges), income taxes
and minority interest (1,087) (587)
------------ -------------
Other credits (charges):
Interest and dividend income 186 199
Interest expense (145) (103)
Securities gains (losses), net (19) 40
Other (164) (97)
------------ --------------
(142) 39
----------- --------------
<PAGE>8
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
1998 1997
------- ---------
(Dollars in thousands, except
per share)
Loss before income taxes and minority interest (1,229) (548)
Income taxes (11) (53)
----------- ------------
Loss before minority minority interest (1,240) (601)
Minority interest in income of the White Ranch (319)
----------- ------------
Net income (loss) $ (1,240) $ (920)
============== =============
Income (loss) per common share: $ (0.20) $ (0.14)
============== =============
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>9
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
UNAUDITED
1998 1997
------------ -------------
(Dollars in thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating
activities $ (832) $ 3,498
------------- --------------
Cash flows from investing activities:
Decrease (increase) in investments (52) (1,151)
Decrease (increase) in notes receivable (76) 788
Purchase of equipment (131) (1,804)
------------ --------------
(259) (2,167)
------------ -------------
Cash flows from financing activities:
Increase (decrease) in long-term debt (263) 449
Increase in short-term debt 20 29
------------ -------------
(243) 478
------------- -------------
Increase (decrease) in cash and cash equivalents (1,334) 1,809
Cash and cash equivalents, beginning of period 4,299 1,283
------------- -------------
Cash and cash equivalents, end of period $ 2,965 $ 3,092
============= =============
<PAGE>10
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Basis of presentation:
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management,
necessary for a fair statements of results for the interim period.
The results of operations for the nine months ended September 30, 1998,
are not necessarily indicative of the results to be expected for the
full year. A more detailed discussion of the Company's financial
position is described in the Company's Form 10-K for the year ended
December 31, 1997.
2. Consolidation:
The accompanying consolidated condensed financial statements include the
accounts of the Company and its wholly-owned subsidiaries Continental
California Corporation (Continental), M&R Corporation (MRC), and MRC's
subsidiary M&R Investment Company, Inc. (MRI) and MRI's subsidiaries SHF
Acquisition Corporation (SHF) and Southlake Acquisition Corporation
(Southlake)
3. Related party transactions:
As of October 30, 1998, John B. Anderson (Anderson), the Company's
controlling stockholder and former Chairman of the Board of Directors of
the Company, and entities owned or controlled by him (Anderson Entities)
own approximately 67.2% of the outstanding shares of common stock of the
Company which is pledged to the FDIC.
On November 26, 1997, the Company entered into a Loan Purchase Agreement
(the Note Sale Agreement) with Anderson, as Trustee, of the John J.
Anderson Family Trust. The Note Sale Agreement is more fully described
in the Company's Form 10-K for the year ended December 31, 1997.
On March 31, 1998, the United States District Court, District of Nevada
ordered that the Note Sale Agreement be rescinded and all parties return
any of the assets transferred.
As a result of the foregoing Order, the Company has recorded a loss of
approximately $162,500 in the accompanying Consolidated Condensed
Statement of Income (Loss) for the nine months ended September 30, 1998.
<PAGE>11
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3. Related party transactions (continued):
In June 1998, Baby Grand Corporation (BGC), an entity controlled by
Anderson, filed a petition under Chapter 7 of the Bankruptcy Code with
the Bankruptcy Court in Las Vegas, Nevada. The trustee is inventorying
the assets of BGC, and the ultimate outcome of the proceeding is not
known at this time. The Company has reduced the carrying value of the
BGC note to the estimated value of the security pledged. The BGC note is
described in detail in the Company's Form 10-K for the year ended
December 31, 1997. See Item 1. "Business - Other Activities - Certain
Loans - Baby Grand Corp."
The Company is informed that the FDIC is attempting to foreclose and
resell the remaining collateral it holds, which includes the common
stock of the Company owned by Anderson. The Company believes that the
FDIC is required to receive the permission of the United States District
Court before it may resell the collateral. The Company has submitted an
offer to purchase the 3,000,000 shares of the Company held by the FDIC
as collateral when and if it forecloses.
4. Contingencies:
(a) As of September 30, 1998, there were no material legal
proceedings pending against the Company. However, see footnote 3
and item b. below regarding legal proceedings, not involving the
Company, that may have a material adverse effect on the Company.
(b) Anderson, Edith Anderson (Anderson's wife), Cedar Development
Co., J.A. Inc., and J.B.A. Investments, Inc. (collectively the
Anderson Parties) are involved in litigation (the Anderson
Litigation) with the Federal Deposit Insurance Corporation (the
FDIC). The Anderson Litigation is more fully described in the
Company's Form 10-K for the year ended December 31, 1997.
(c) SHF was advised of possible contamination on two sites at Sam
Hamburg Farm, a storage facility for diesel fuels and an old
airstrip which had been used for the loading and fueling of
aircraft applying agricultural chemicals to the surrounding farm
lands. The Company completed the cleanup relating to the diesel
storage tanks at a cost of approximately $100,000 in 1996.
The Company has disposed of a large amount of the contaminated earth at an
approved site for the storage of toxic wastes. However, approximately 5,000
<PAGE>12
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
cubic yards of contaminated earth still remain to be disposed of.
The Company, through its chemical and toxic clean-up consultant,
has been working with the California State Environmental
Protection Agency, in seeking alternate means to the disposal in
toxic dump sites of chemical and toxic-laden soil. The State has
participated in the funding of several projects by a number of
chemical treatment firms in efforts to try other detoxification
methods on the soil.
Because of the ongoing testing, the State has not imposed a
disposal date upon the Company. Cost of disposal is estimated at
$100 per cubic yard or approximately $500,000. However, if
on-site remediation can be achieved, it is estimated that the
cost will be between $90,000 and $115,000. The Company is unable
to predict when the ongoing testing will be complete or what the
outcome of these tests will be. As of September 30, 1998, the
Company has paid approximately $500,000, including the $100,000
expended for the diesel storage tank, and accrued an estimated
$174,000 relating to the balance of the clean-up of the
contaminated earth. That estimate could change as the remediation
work takes place.
(d) Company has received a notice from the California State Board of
Equalization (SBE) that one of the Company's subsidiaries owes
California taxes of approximately $183,000 and interest of
$167,000 resulting from the foreclosure sale of certain real
property, owned by the subsidiary, in San Diego, California. The
issue is the Company's accounting of the foreclosure gain in
1988. The Company has filed a petition for rehearing with the SBE
and is currently awaiting its decision.
5. Loss per common share:
Loss per common share has been computed by dividing the net loss, plus
the accrued dividends applicable to the Series B Preferred stock
($54,000), for the nine months ended September 30, 1998 and 1997 by the
number of shares outstanding (6,375,096) as of September 30, 1998 and
1997. Dividends on non-convertible preferred stock, Series B, are
deducted from income or added to the loss applicable to common shares.
Dividends on the Company's Series B Preferred stock have not been paid
since the first quarter of 1982. The Company is in arrears on such
dividends in the amount of approximately $1,227,000 as of September 30,
1998.
<PAGE>13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- -----------------------------------------------------------
Certain information included herein contains statements that are
forward-looking, such as anticipated liquidity requirements for the coming
fiscal year, anticipated sources of liquidity for the coming fiscal year, and
potential changes in control of the Company. Such forward-looking information
involves important risks and uncertainties that could significantly affect the
Company's financial condition and future results of operations, and,
accordingly, such future financial condition and results of operations may
differ from those expressed in any forward- looking statements made herein.
These risks and uncertainties include, but are not limited to, those risks
relating to actual costs necessary to clean-up certain real property chemical
contamination, real estate market conditions and general economic conditions,
the abilities of certain third parties to obtain financing and otherwise perform
under real estate purchase agreements, and the outcome of certain litigation and
other risks. The Company cautions readers not to place undue reliance on any
such forward-looking statements, and, such statements speak only as of the date
made.
OVERVIEW
The Company's operating results for the quarter ended September 30, 1998
were adversely affected by the following:
1. The slow upper-end real estate market in Sacramento County,
California. During the quarter ended September 30, 1998, the
Company sold only 1 lot at the Fairways. However, this was a
resale of a lot acquired by foreclosure.
2. Murieta Investors, the Company that purchased 6 lots at the
Fairways, has 4 residential housing units in various
stages of completion. It is anticipated that these units
will be completed and sold during the fourth quarter of 1998
and the first quarter of 1999. Completion of these units has
taken longer than previously estimated due to a shortage of
trades people in the construction industry in the Sacramento,
CA area. If the units are sold, of which there can be no
assurance, the Company would receive the success payments as
provided for in the Agreement between Murieta Investors and the
Company. The Agreement defines the success payment as 20% of
the gross sales price of each residential dwelling sold less
$50,000 per unit previously paid.
3. A significant decrease in drying revenue at the rice drying
facility. An abnormally wet spring during 1998, delayed or
canceled planting the rice crop, which reduced the availability
of rice to be dried at the Company's facility. As there was no
rice for the Company to dry, the Company agreed to dry and store
white taco corn. It cannot be determined at this time, the
expected revenue from this operation since drying corn is a new
operation for the Company and the Company charges
<PAGE>14
different rates for drying rice and corn. The revenue for drying
corn will be determined when drying is completed by December
1998.
4. A decrease in revenue of overage income at the storage facility.
Overage income, which is generated by the sale of paddy rice
remaining in the warehouse after all commitments have been
shipped, will be down by approximately $23,000 because of no rice
being dried and stored in 1998.
5. A write down of $100,000 in the investment in the Solano County
Option due to the reduction in the Company's estimate of the
value of the property.
The Company is waiting for the ruling from the California State
Board of Equalization regarding the amount of Franchise Tax, if
any, that may be due as a result of the foreclosure sale of certain real
property in San Diego, California in 1988.
The Company has addressed the possible exposures related to the impact
on its computer systems of the Year 2000. Key financial information and
operational systems have been addressed. It has been determined that
accounting software and computer controlled systems at the rice drying
facility is Year 2000 compliant.
The Company has no present intentions to pay dividends on either its
common or preferred stock.
OPERATING RESULTS
Three months ended September 30, 1998 vs. the three months ended
September 30, 1997
Real Estate
The decrease in revenues from the sale of real estate for the three
months ended September 30, 1998 when compared to the three months ended
September 30, 1997 is due primarily to the sale of the White Ranch and the 57
residential lots in North Las Vegas in 1997. During the three months ended
September 30, 1998 the Company sold only one lot.
Net rental income from agricultural properties for the three months
ended September 30, 1998 decreased by approximately $109,000. This decrease was
all due to the sale of the White Ranch in 1997 and no corresponding rental
income in 1998.
Agricultural
Rice drying and storage revenues from the rice drying operations for the
three months ended September 30, 1998 decreased by approximately $284,000 when
compared with the three
<PAGE>15
months ended September 30, 1997. This was due to adverse spring weather which
delayed or canceled planting the rice crop, reducing the availability of rice to
be dried. As there was not sufficient rice to be dried, the Company decided to
dry white taco corn which is not as profitable as drying rice. In addition,
overage income from rice storage has been realized during this period in 1997
but will be recognized in the fourth quarter of 1998. The amount of overage
income for 1998 is expected to be approximately 30% less than in 1997.
General
When compared with the three months ended September 30, 1997, operating
expenses decreased by approximately $374,000 during the three months ended
September 30, 1998. This decrease consisted primarily of a decrease in
administrative expenses of ($109,000), a decrease in Real Estate Operations of
($5,000), offset by an increase in depreciation of ($16,000). The Solano Option
was written down by $100,000 in 1998 and $400,000 in 1997 to its estimated fair
value of $544,000.
Interest expense for the three months ended September 30, 1998,
increased by approximately $38,000 when compared with the three months ended
September 30, 1997. The increase consisted primarily of an increase in interest
expense relating to the new rice dryer financing offset by a reduction in
interest expense related to the Beal Bank loan.
Nine months ended September 30, 1998 vs.the nine months ended
September 30, 1997.
Real Estate
The decrease in revenues from the sale of real estate and the decrease
in cost of real estate sold for the nine months ended September 30, 1998,
compared with the nine months ended September 30, 1997, resulted from the sale
of the White Ranch and the 57 residential lots in North Las Vegas during this
period in 1997.
Net rental income from agricultural properties decreased due to the sale
of the White Ranch in 1997.
Agricultural
The loss from the rice drying and storage operations for the nine months
ended September 30, 1998 increased by $244,000 when compared with the nine
months ended September 30, 1997. 1997 includes $144,000 of rice overage income
whereas in 1998 the rice overage income of $120,000 will be reported in the
fourth quarter, therefore the real difference is $56,000. This was due primarily
to the switch from rice to corn drying and storage, which is not as profitable
as drying rice. This switch was caused by adverse spring conditions which
adversly impacted the rice crop.
<PAGE>16
General
When compared with the nine months ended September 30, 1997, operating
expenses decreased by approximately $590,000. The decrease consisted of a
reduction of corporate costs of $212,000, a decrease in real estate operations
of $22,000, and bad debt expense of $100,000. The Solano Option was written down
by $100,000 in 1998 and $400,000 in 1997 to its then estimated fair value. The
decrease in corporate costs resulted from the company relocating the corporate
office from Las Vegas, NV to Sacramento, CA, plus a decrease in officer's
salaries. Depreciation expense increased due to the new rice drying facility.
Other charges increased by approximately $181,000 when compared with the nine
months ended September 30, 1997. The increase was primarily due to bad debt
expense relating to the unwinding of the Note Sale Agreement with the John J.
Anderson Family Trust and net securities losses.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 30, 1998, cash, cash equivalents
and marketable securities decreased by $1,182,000 from $4,972,000 at December
31, 1997, to $3,790,000 at September 30, 1998. The most significant uses of cash
during the nine months ended September 30, 1998, consisted of cash used in
operating activities ($832,000) payments on long-term and short-term debt
($243,000) and an increase in investments of $52,000.
The Company believes that its primary requirements for liquidity in the
coming fiscal year will be to fund ongoing expenses at The Fairways, which
include, among other things, association dues, water and sewer fees, advertising
and property taxes; to fund the required payments on the note to Beal Bank; to
fund the required payments due on the rice dryer financing; to fund costs that
may be incurred relating to the toxic clean-up at Sam Hamburg Farm; to fund any
tax payment that may be due to the California Franchise Tax Board; and to fund
general and administrative expenses. In addition, the Company may be required to
fund certain costs relating to a possible stockholder meeting.
The Company believes that sources of required liquidity will be cash
generated from the rice drying and storage facilities, anticipated lot sales at
The Fairways, collection of notes receivable and Success Payments related to the
venture with Murieta Investors and the cash available at September 30, 1998.
Based on known commitments, the Company believes that the sources of cash
described and the cash available at September 30, 1998 will be adequate to fund
known liquidity requirements.
<PAGE>17
PART II - OTHER INFORMATION
ITEM 1. Legal Proceeding
None, except for the discussion contained in footnote 3 in Notes to
Consolidated Condensed Financial Statements.
ITEM 2. Changes in Securities
Not applicable.
ITEM 3. Default Upon Senior Securities
Dividends in arrears. See Note 5 of Notes to Consolidated Condensed
Financial Statements
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.01 Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>18
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSE THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DUNES HOTELS AND CASINOS INC.
Registrant
Date: November 5, 1998 By: /s/ EDWARD PASQUALE
- ------------------------ --------------------------
Edward Pasquale, President
By: /s/ MARVIN P. JOHNSON
-------------------------
Marvin P. Johnson
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) ON PAGES 3 THROUGH 9 OF THE
COMPANY'S QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30,
1998, AND IS QUALLIFIED IN IT'S ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,965
<SECURITIES> 825
<RECEIVABLES> 2,445
<ALLOWANCES> 1,899
<INVENTORY> 0
<CURRENT-ASSETS> 5,022
<PP&E> 3,812
<DEPRECIATION> 565
<TOTAL-ASSETS> 12,386
<CURRENT-LIABILITIES> 628
<BONDS> 0
0
5
<COMMON> 3,900
<OTHER-SE> 4,297
<TOTAL-LIABILITY-AND-EQUITY> 12,386
<SALES> 128
<TOTAL-REVENUES> 197
<CGS> 194
<TOTAL-COSTS> 194
<OTHER-EXPENSES> 358
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55
<INCOME-PRETAX> (379)
<INCOME-TAX> (9)
<INCOME-CONTINUING> (388)
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<NET-INCOME> (388)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
