<PAGE>1
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 June 30, 1999
-------------
__ 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 or 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 August 2, 1999.
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 JUNE 30, 1999
INDEX
-------
Page
------
Part 1. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 3
June 30, 1999 and December 31, 1998
Consolidated Condensed Statements of Operations 5
for the three months ended June 30, 1999
and 1998
Consolidated Condensed Statements of Operations 6
for the six months ended June 30, 1999
and 1998
Consolidated Condensed Statements of Cash Flows 7
for the six months ended June 30, 1999
and 1998
Notes to Consolidated Condensed Financial 8
Statement
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
------------------------------------------------
Part II. Other Information
Item 1. Legal Proceedings 16
-------------------------
Item 2. Changes in Securities 16
-----------------------------------
Item 3. Defaults Upon Senior Securities 16
------------------------------------------
Item 4. Submission of Matters to a Vote of Security Holders 16
-------------------------------------------------------------
Item 5. Other Information 16
---------------------------
Item 6. Exhibits and Reports on Form 8-K 16
-----------------------------------------
Signatures 17
<PAGE>3
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
JUNE 30, 1999 AND DECEMBER 31, 1998
(Dollars in thousands)
ASSETS
<TABLE>
<S> <C> <C>
June December
30, 1999 31, 1998
----------------- -----------------
(Unaudited)
Cash and cash equivalents $ 3,194 $ 3,120
Marketable securities 813 828
Receivables
Trade 33 9
Related party, less allowance of $1,899 in 1999 and 1998 37 37
Real estate sales 432 369
Inventory of real estate held for sale 3,787 3,950
Prepaid expenses 53 115
Property and equipment, less accumulated depreciation
and amortization, 1999, $664; 1998, $598 3,162 3,228
Real estate investment 544
Other assets 3 3
----------------- -------------
$ 11,514 $ 12,203
================= ==============
</TABLE>
<PAGE>4
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)
JUNE 30, 1999 AND DECEMBER 31, 1998
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
June December
30, 1999 31, 1998
----------------- -----------------
(Unaudited)
Accounts payable $ 56 $ 25
Accrued expenses 175 185
Due to former minority interest 320 320
Income taxes 307 307
Short-term debt 49
Long-term debt and capital lease obligation 1,695 1,875
Accrued preferred stock dividends in arrears 1,281 1,245
----------------- -----------------
3,834 4,006
----------------- -----------------
Shareholders' equity
Preferred stock - authorized 10,750,000 shares ($.50 par); issued 10,512
shares Series B $7.50 cumulative preferred stock, outstanding 9,610
shares in 1999 and 1998, aggregate
liquidation value $2,446 including dividends in arrears 5 5
Common stock - authorized 25,000,000 shares ($.50 par); issued 7,799,780
shares, outstanding 6,375,096 shares
in 1999 and 1998 3,900 3,900
Capital in excess of par 25,881 25,881
Deficit (20,106) (19,589)
----------------- -----------------
9,680 10,197
Treasury stock at cost; Preferred - Series B, 902 shares
Common 1,424,684 shares in 1999 and 1998 (2,000) (2,000)
----------------- -----------------
Total shareholders' equity 7,680 8,197
----------------- -----------------
$ 11,514 $ 12,203
================= =================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>5
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Dollars in thousands, except per share)
UNAUDITED
<TABLE>
<S> <C> <C>
1999 1998
--------------- ---------------
Revenues
Sales of real estate $ 105 $ 172
Rental income, agricultural properties 14 13
Drying and storage revenues 46 26
--------------- ---------------
165 211
--------------- ---------------
Cost and expenses
Cost of real estate sold 85 171
Cost and expenses of rental income 1 1
Cost of drying and storage revenues 70 89
Selling, administrative and general
Corporate 159 188
Real estate operations 64 52
Depreciation 33 32
--------------- ---------------
412 533
--------------- ---------------
Loss before other credits (charges) and income taxes (247) (322)
Other credits (charges)
Interest and dividend income 63 61
Interest expense (45) (59)
Loss on marketable securities, net (11) (6)
Other 3 14
--------------- ---------------
7 10
--------------- ---------------
Loss before income taxes (240) (312)
Income taxes (7)
--------------- ---------------
Net loss $ (247) $ (312)
=============== ===============
Weighted average number of shares outstanding 6,375,096 6,375,096
Loss per common share $ (0.04) $ (0.05)
=============== ===============
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>6
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Dollars in thousands, except per share)
UNAUDITED
<TABLE>
<S> <C> <C>
1999 1998
---------------- --------------
Revenues
Sales of real estate $ 778 $ 256
Rental income, agricultural properties 26 30
Drying and storage revenues 93 56
---------------- --------------
897 342
---------------- --------------
Cost and expenses
Cost of real estate sold 716 257
Cost and expenses of rental income 2 2
Cost of drying and storage revenues 150 220
Selling, administrative and general
Corporate 343 431
Real estate operations 108 101
Depreciation 66 64
---------------- --------------
1,385 1,075
---------------- --------------
Loss before other credits (charges) and income taxes (488) (733)
Other credits (charges)
Interest and dividend income 114 120
Interest expense (89) (89)
Loss on marketable securities, net (15) (8)
Other 7 (140)
---------------- --------------
17 (117)
---------------- --------------
Loss before income taxes (471) (850)
Income taxes (10) (2)
---------------- --------------
Net loss $ (481) $ (852)
================= ================
Weighted average number of shares outstanding 6,375,096 6,375,096
Loss per common share $ (0.08) $ (0.13)
================= =================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>7
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Dollars in thousands)
UNAUDITED
<TABLE>
<S> <C> <C>
1999 1998
------------------ -----------------
Cash flows from operating activities:
Net cash provided by (used in) operating activities $ (155) $ (532)
------------------ -----------------
Cash flows from investing activities:
Decrease (increase) in investments 559 (237)
Decrease (increase) in notes receivable (101) (73)
Purchase of equipment (58)
------------------ -----------------
458 (368)
------------------ -----------------
Cash flows from financing activities
Decrease in long-term debt (180) (178)
Decrease in short-term debt (49) (60)
------------------ -----------------
(229) (238)
------------------ -----------------
Increase (decrease) in cash and cash equivalents 74 (1,138)
Cash and cash equivalents, beginning of period 3,120 4,299
------------------ -----------------
Cash and cash equivalents, end of period $ 3,194 $ 3,161
================= =================
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>8
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
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 statement of results of operations for the interim
periods.
The results of operations for the six months ended June 30, 1999, 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-KSB for the year ended December 31,
1998.
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), after elimination of all material
inter-company balances and transactions.
3. Control of registrant:
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 Company's common stock. See Note 11(b) in the Company's Form
10-KSB for the year ended December 31, 1998 regarding litigation
between Anderson and the Federal Deposit Insurance Corporation (the
FDIC). Each entity related or controlled by Anderson will hereinafter
be identified as an Anderson Entity.
In May 1999, the FDIC solicited bids for the sale of a portion of its
loan, together with the underlying security, and a part of the judgment
against Anderson. Included in the package was 3,000,000 shares of the
Company's common stock (the Shares). The Company submitted a bid to the
FDIC but the successful bidder was General Financial Services, Inc.
On June 3, 1999, General Financial Services, Inc., and GFS Acquisition,
Inc. (collectively GFS) filed a Schedule 13D with the Securities and
Exchange Commission which stated that GFS intends to exercise its
rights under the judgment and security documents. Subsequently, GFS
attempted to transfer the Shares to itself but Mr. Anderson objected,
claiming that there was no change in ownership of the Shares.
<PAGE>9
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
3. Control of registrant (continued):
On July 6, 1999, the Company filed a Complaint In Interpleader in the
Superior Court of California, County of Yolo (the State Action) and
deposited the Shares with the Court. The State Action was filed against
GFS, Anderson and the FDIC to resolve conflicting claims concerning who
has the power to transfer and otherwise dispose of the Shares and by
whom voting and other rights connected with the Shares may be
exercised.
On July 9, 1999, GFS filed a complaint against the Company in the
United States District Court Northern District of New York (the Federal
Action) seeking, among other things, a permanent injunction requiring
the Company to give possession of the Shares to GFS. The Federal Court
issued a temporary restraining order which restrains the Company from
disposing of the Shares or transferring or disposing any of its assets
outside of the ordinary course of business.
The Company is unable to predict the outcome of either the State Action
or the Federal Action and has no ownership interest in the shares.
However, the State Action and/or the Federal Action may result in a
change of control of the Company. A more detailed discussion is
described in the Company's Form 8-K filed on July 21, 1999.
4. Contingencies:
(a) As of June 30, 1999, there were no material legal proceedings
pending against the Company. Subsequent to June 30, 1999, see Note
3 above regarding legal proceedings that may have a material
adverse effect on the Company.
(b) SHF was advised in 1991 of possible contamination at Sam Hamburg
Farm of approximately 5,000 cubic yards of contaminated earth. 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 the chemical and toxic-laden 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. Accordingly, the estimates could materially
change as the testing and remediation work continues, which could
be as early as 1999.
<PAGE>10
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
(c) The Company has received a notice from the State of
California Franchise Tax Board (FTB) wherein the FTB alleges that
one of the Company's subsidiaries owes California franchise tax
of approximately $316,000, plus approximately $350,000 in
penalties and interest resulting from the foreclosure sale of
certain real property owned by the subsidiary. The Company
appealed this matter to the California State Board of
Equalization (SBE) which ruled in favor of the Company on one
point and ruled in favor of FTB on another. Both sides appealed
and the SBE has agreed to rehear the case in July 1999. The
hearing was on July 29, 1999 in Sacramento, CA. The outcome of
the hearing is not known at this time. Provision has been made in
the financial statements for management's minimum estimate of the
costs of this matter, including penalties and interest accrued.
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 ($36,000), for the six months ended June 30, 1999 and 1998
by the number of shares outstanding (6,375,096) as of June 30,
1999 and 1998. 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 $1,281,000 as of June 30, 1999. The Company has no
present intention to pay dividends on either its common or
preferred shares.
<PAGE>11
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
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 operation 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.
YEAR 2000 ISSUE
The Company has addressed the possible exposures related to the impact of Year
2000 issues. The internal computer systems for key financial information
processing and operational equipment relating to the computer-controlled
conveyors at the grain drying facility have been assessed. It has been
determined that accounting software is Year 2000-certified. Computer systems at
the grain drying facility, which was built in 1997, are also compliant.
The dryer as well as conveyor equipment can also be operated manually.
In the two main segments that the Company operates, real estate and agriculture,
neither segment is dependent on computer applications. The agricultural segment
relating to the grain drying facility will have the current year's grain dried
and stored prior to the Year 2000, thereby avoiding any processing equipment
problems should one occur. During the coming year of 2000, grain shipments out
of the warehouse will be by individual trailer units alleviating any potential
shipment stoppages. The Company feels that these operations will not be affected
by Year 2000 issues.
<PAGE>12
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
OVERVIEW
REAL ESTATE
FAIRWAYS
In December 1996 the Company sold 6 lots to Murieta Investors, LLC (MI) for the
greater of $40,000 per lot or 20% of the gross sales price of the residential
dwelling (Success Payment). To date MI has constructed 4 dwelling units and has
not started any construction on the remaining 2 lots. One dwelling was sold
during the first quarter of 1999 and the Company received a Success Payment in
the amount of $43,600. Another sale is expected to close during July 1999 and
the Company will receive approximately $40,000.
Pursuant to a 1998 amendment to the Purchase and Option Agreement between the
Company and MI, the Company granted to MI an option to purchase 34 of the
remaining 44 lots at the Fairways. The lots covered by the option are subject to
prior sale by the Company. The options are exercisable starting December 1, 1998
(6 lots) and every six months thereafter (4 lots each).
If two consecutive options are not exercised then the remaining options are
terminated. MI did not exercise the December 1, 1998 option and the June 1, 1999
option. During June 1999 the Company notified MI that the remaining options were
terminated.
Due to the termination of the Purchase and Option Agreement, the Company plans
to initiate a sales program with independent builders to complete The Fairways.
The program will be similar to the MI program but without options and it is
expected that several builders will participate.
In addition, beginning in May of 1999, advertising expenditures were increased.
An advertising campaign featuring TV and newspaper advertising was begun with an
initial expenditure of approximately $20,000. It is anticipated that this will
generate additional sales.
SOLANO COUNTY OPTION
In December 1998, the Company entered into an agreement to sell the option.
Escrow closed in March 1999. The Company received $500,000 cash and a note
receivable in the amount of $33,333. The note is payable in four annual
installments, with an interest rate of 8%.
<PAGE>13
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
AGRICULTURAL
The Company operates a grain drying and storage facility. The drying facility is
financed by a 5-year lease, which commenced in March 1998. At the end of the
lease the Company will obtain title to the drying facility. The Company stores
grain principally for one customer under a contract for grain storage, which
expires in May 2002. If the Company were to lose this customer it would have a
material adverse effect on the Company's agricultural segment.
The Company is contacting rice growers to dry and store medium grain paddy rice
for the 1999 fall season. It is not a business practice for independent rice
growers to enter into signed contracts to dry and store rice, however, the
Company does not have any commitments at this date.
OTHER
The California State Board of Equalization appeal hearing to determine the
amount of Franchise Tax, if any, that may be due as a result of the sale of
certain real property in San Diego, California was held in July 1999. The
outcome of that hearing is not known at this time.
The Company has no present intentions to pay dividends on either its common or
preferred stock.
OPERATING RESULTS
Three months ended June 30, 1999 vs. the three months ended June 30, 1998.
Real Estate
The decrease in revenues from the sale of real estate for the three months ended
June 30, 1999 when compared to the three months ended June 30, 1998 resulted
from two lots being sold in 1998 measured against one lot sold in 1999. Sales at
The Fairways continue to be slow.
Net rental income from agricultural properties for the three months ended June
30, 1999 parallel the revenue for the same period in 1998. The 1999-year is the
second year of a two-year lease for property located at Sam Hamburg Farm.
Agricultural
Revenue from the grain drying and storage facility for the three months ended
June 30, 1999 increased over the three months ended June 30, 1998. Due to
weather conditions, more grain was harvested and received for storage during
this period in 1999 than in 1998 as wet spring weather
<PAGE>14
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
delayed the 1998 harvest. It is expected that upon completion of harvest the
1999 revenue will parallel 1998 for the storage of the spring grain crops.
General
When compared with the three months ended June 30, 1998 operating expenses
decreased by approximately $29,000. This decrease is consisted primarily of a
reduction in administrative and general expenses consisting of a decrease in
officers/office salaries ($33,000), a decrease in employee benefits ($6,000),
director fees decrease ($4,000), a decrease in officers/directors liability
insurance premiums ($6,000) offset by an increase in legal fees ($20,000).
Selling expenses associated with real estate operations increased by $12,000 for
the three months ended June 30, 1999 compared with the three months ended June
30, 1998. Advertising expenditures increased ($15,000) and other expenses of
($9,000) were offset by decreases in association dues, taxes and utilitys costs
due to fewer lots held for resale in 1999 than in 1998.
Advertising costs increased as result of increased newspaper and TV advertising.
Other expense was attributable to geotechnical consulting services on various
lots within the Fairways development.
Six months ended June 30, 1999 vs. six months ended June 30, 1998
Real Estate
Revenues from the sale of real estate for the six months ended June 30,
1999 increased $522,000 compared to the six months ended June 30, 1998. The sale
of the Solano Option in March 1999 ($533,333) and the "Success Payment," from
Murieta Investors, LLC ($45,000), from the sale of one residential dwelling at
The Fairways, accounts for the increase. This was offset by a decrease in lot
sales, two lots sold during this period in 1999 compared with three lots sold
during 1998.
Agriculture
Storage revenue at the grain drying and storage facility increased by
$37,000 in the six months ended June 30, 1999 compared with the six months ended
June 30, 1998. The 1999 increase is a result from the bulk of the 1998 crop
shipped out during this period coupled with a larger volume of 1999 grain crop
received. In 1998 the spring grain crop harvest was delayed due to weather
conditions. The total spring grain crop received in 1999 will equal that of
1998.
<PAGE>15
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
General
Compared with the six months ended June 30, 1998 corporate operating
expenses decreased by $88,000 in the six months ended June 30, 1999. The
decrease is made up of salaries officer/office ($73,000), employee benefits
($16,000), director fees ($7,500) and officers/directors liability insurance
($12,000). This decrease was offset by an increase in legal fees ($20,000).
The cost of real estate operations increased in the six months ended
June 30, 1999 compared with the six months ended June 30, 1998. The most
significant increase was advertising ($15,000) and geotechnical consulting
services ($9,000). A reduction in the number of lots held for resale decreased
the cost of association dues, utilities, and related expenditures ($17,000).
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1999, cash, cash equivalents and marketable
securities increased by $59,000 from $3,948,000 at December 31, 1998, to
$4,007,000 at June 30, 1999. The increase in cash was due primarily to the sale
of the Solano Option. The most significant uses of cash during the three months
ended June 30, 1999 consisted of cash used in operating activities ($155,000),
payments on long-term and short-term debt ($229,000) and a decrease in
investments of $559,000.
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 and property taxes;
to fund the required payments on the note to Beal Bank; to fund the required
payments due on the grain 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
my 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 grain drying and storage facilities, anticipated lot sales at The
Fairways, collection of notes receivable, and the cash available at June 30,
1999. Based on known commitments, the Company believes that the sources of cash
described and the cash available at June 30, 1999 will be adequate to fund known
liquidity requirements.
<PAGE>16
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
PART II - OTHER INFORMATION
---------------------------
ITEM 1. Legal Proceedings
- -----------------------------
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 for the quarter ended June 30, 1999.
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
Form 8-K, dated July 21, 1999, wherein the Company reported
that on July 6, 1999, it filed a Complaint In Interpleader in
the Superior Court of the State of California for the County
of Yolo and that on July 9, 1999, General Financial Services,
GFS Acquisition Company, and J.B.A. Investments, Inc., filed a
complaint against the Company in the United States District
Court Northern District of New York.
<PAGE>17
DUNES HOTELS AND CASINOS INC.
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1999
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: August 4, 1999 By: /s/ EDWARD PASQUALE
---------------- ---------------------
Edward Pasquale,
President
By: /s/ MARVIN P. JOHNSON
-------------------
Marvin P. Johnson,
Principal Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AND THE CONSOLIDATED CONDENSED STATEMENT OF
OPERATIONS ON PAGE 3 THROUGH 5 OF THE COMPANY'S QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 1999, AND IS QUALIFIED IN IT'S ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,194
<SECURITIES> 813
<RECEIVABLES> 2,401
<ALLOWANCES> 1,899
<INVENTORY> 0
<CURRENT-ASSETS> 4,562
<PP&E> 3,826
<DEPRECIATION> 664
<TOTAL-ASSETS> 11,514
<CURRENT-LIABILITIES> 538
<BONDS> 0
0
5
<COMMON> 3,900
<OTHER-SE> 4,040
<TOTAL-LIABILITY-AND-EQUITY> 11,514
<SALES> 778
<TOTAL-REVENUES> 897
<CGS> 868
<TOTAL-COSTS> 868
<OTHER-EXPENSES> 517
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (89)
<INCOME-PRETAX> (471)
<INCOME-TAX> (10)
<INCOME-CONTINUING> (481)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (481)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
