<PAGE> 1
UNITED STATES
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 Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from_______________________ to _____________________
Commission file number 0-8927
Nevada Gold & Casinos, Inc.
3040 Post Oak Blvd., Suite 675
Houston, Texas 77056-6588
(713) 621-2245
Incorporated in I.R.S. Employer Identification No.
Nevada 88-0142032
Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.12 Per Share
- --------------------------------------
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 any
shorter period that the registrant was required to file the reports), and (2)
has been subject to those filing requirements for the past 90 days.
[X] Yes [ ] No
The number of shares outstanding of each of the issuer's classes of
common equity was 9,926,790 as of July 31, 1999.
<PAGE> 2
Nevada Gold & Casinos, Inc.
Index
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information 3
- ------ ---------------------
Item 1 - Financial Statements
Balance Sheets as of June 30, 1999, and March 31, 1999 3
Statements of Operations for the Three Months Ended
June 30, 1999, and 1998 4
Statements of Cash Flows for the Three Months Ended
June 30, 1999, and 1998 5
Notes to Interim Financial Statements 6
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of Operations 10
Part II - Other Information 13
- ------- -----------------
Item 1 - Legal Proceedings 13
Item 2 - Changes in Securities 13
Item 3 - Defaults upon Senior Securities 13
Item 4 - Submission of Matters to a Vote of Security Holders 13
Item 5 - Other Information 13
Item 6 - Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
2
<PAGE> 3
Part I - Financial Information
Item 1 - Financial Statements
Nevada Gold & Casinos, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 42,453 $ 161,234
Notes receivable 132,738 154,763
Other assets 128,321 153,315
----------- -----------
Total Current Assets 303,512 469,312
----------- -----------
Isle of Capri Black Hawk, L.L.C. -- --
Restaurant Connections International, Inc. -- --
Colorado Real Estate (Gold Mountain Development, L.L.C.) 1,806,283 1,807,489
Mining Properties (Goldfield Resources, Inc.) 480,812 480,812
Sunrise Land and Minerals, Inc. 371,750 371,750
Note receivable from affiliate 1,405,965 1,306,547
Furniture, fixtures, and equipment, net of accumulated depreciation of $114,767
and $123,086 on March 31, and June 30, 1999, respectively
85,907 93,836
----------- -----------
Total Assets $ 4,454,229 $ 4,529,746
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued liabilities $ 93,545 $ 102,494
Accrued interest payable 145,326 125,993
Short term notes payable 1,655,000 1,735,000
Current portion of long term debt 34,684 28,942
----------- -----------
Total Current Liabilities 1,928,555 1,992,429
----------- -----------
Long Term Debt
Mortgages payable, net of current portion 34,367 38,731
Notes payable, net of current portion 518,954 508,240
----------- -----------
Total Long Term Debt 553,321 546,971
=========== ===========
Total Liabilities 2,481,876 2,539,400
----------- -----------
Stockholders' Equity
Preferred stock, $10 par value, 500,000 shares authorized, 141,490 shares
outstanding at March 31 and June 30, 1999
1,414,900 1,414,900
Common stock, $.12 par value, 20,000,000 shares authorized, 9,811,664 and
9,926,790 shares outstanding at March 31, and June 30, 1999, respectively
1,190,815 1,177,400
Additional paid in capital 8,928,740 8,695,495
Accumulated deficit prior to development stage (12/27/93) (2,296,077) (2,296,077)
Accumulated deficit during development stage (7,266,025) (7,001,372)
----------- -----------
Total Stockholders' Equity 1,972,353 1,990,346
----------- -----------
Total Liabilities and Stockholders' Equity $ 4,454,229 $ 4,529,746
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
Nevada Gold & Casinos, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30
Cumulative Amounts
---------------------------------------- During Development
1999 1998 Stage (Since 12/27/93)
------------------- --------------- ---------------------
<S> <C> <C> <S>
Revenues
Royalty income $ 6,000 -- $ 241,000
Gain on sale-part interest Isle of Capri
Black Hawk
-- -- 282,967
Gain on sale of Colorado Real Estate -- -- 197,304
Interest Income 52,526 -- 139,219
Other income 10,000 809 515,372
----------- ----------- ------------
Total Revenues 68,526 809 1,375,862
----------- ----------- ------------
Expenses
General and administrative 68,418 101,594 2,202,660
Interest expense 74,401 20,661 999,571
Salaries 85,231 66,084 924,462
Legal and professional fees 59,746 35,905 2,276,588
Other 9,046 15,731 492,401
----------- ----------- ------------
Total Expenses 296,842 239,975 6,895,682
----------- ----------- ------------
Equity in Earnings (Loss) of Isle of Capri
Black Hawk
-- (381,200) (1,627,779)
Equity in Earnings (Loss) of RCI (36,337) -- (118,426)
----------- ----------- ------------
Net Income (Loss) $ (264,653) $ (620,366) $(7,266,025)
=========== ========== ===========
Per Share Information
Net income (loss) $ (264,653) $ (620,366) $(7,266,025)
Preferred stock dividends accumulated (42,447) (42,331) (385,312)
=========== ========== ===========
Income (loss) available to common stockholders $ (307,100) $ (662,697) $(7,651,337)
=========== ========== ===========
Weighted average number of common
shares outstanding
9,875,670 8,905,734 7,437,518
=========== ========== ===========
Net income (loss) per common share $ (.03) $ (.07) $ (1.03)
=========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
Nevada Gold & Casinos, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30
Cumulative Amounts
-------------------------- During Development
1999 1998 Stage (Since 12/27/93)
------------ ----------- ----------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (264,653) $ (620,366) $(7,266,025)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation 8,319 7,752 114,280
Equity in net loss of Isle of Capri Black Hawk -- 381,200 1,627,779
Equity in net loss of RCI 36,337 -- 118,426
Consultant and investment banker option expense 22,545 -- 1,044,518
Gain on sale-part interest Isle of Capri
Black Hawk
-- -- (282,967)
Gain on sale of Colorado real estate -- -- (197,304)
Other -- -- 231
Changes in operating assets and liabilities:
Other (11,125) (1,801) 57,312
Accounts payable and accrued liabilities 10,384 2,697 1,327,791
----------- ----------- -----------
Net Cash Used in Operating Activities (198,193) (230,518) (3,455,959)
----------- ----------- -----------
Cash Flows From Investing Activities:
Real estate and assets held for development 1,206 (36,668) (1,548,400)
Purchase of furniture, fixtures, and equipment (390) (1,453) (55,303)
Proceeds from sale of part interest of Isle of
Capri Black Hawk
-- -- 833,334
Repurchase interest in Isle of Capri Black Hawk .. -- -- (500,000)
Advances to RCI -- -- (104,115)
Advances to affiliates (87,444) -- (1,594,261)
Proceeds on disposition of property -- -- 45,746
----------- ----------- -----------
Net Cash Provided (Used) by Investing Activities . (86,628) (38,121) (2,922,999)
----------- ----------- -----------
Cash Flows From Financing Activities:
Proceeds from debt 39,000 150,000 7,157,044
Common stock issued for cash, net of
offering costs
233,948 243,836 2,781,166
Fractional shares redeemed -- - (36)
Payments on debt (106,908) (208,168) (3,819,550)
Salaries contributed by officers -- -- 1,000
Prepaid stock subscription -- -- 295,500
----------- ----------- -----------
Net Cash Provided by Financing Activities 166,040 185,668 6,415,124
----------- ----------- -----------
Net increase (decrease) in cash (118,781) (82,971) 36,166
Beginning cash balance 161,234 154,367 6,287
----------- ----------- -----------
Ending cash balance $ 42,453 $ 71,396 $ 42,453
=========== =========== ===========
Supplemental Information:
Cash paid for interest $ 54,507 $ 4,561 $ 609,465
----------- ----------- -----------
Cash paid for taxes $ -- $ -- $ --
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
1. Business
Nevada Gold & Casinos, Inc., which currently trades on the bulletin board
under the ticker symbol "UWIN" (referred to as "UWIN"), has developed its
business in the areas of leisure and entertainment, and specifically including
gaming, real estate development, and restaurant franchise operation. UWIN was
founded in 1977 under the name Pacific Gold & Uranium Corporation. On December
27, 1993, control of UWIN changed and its primary focus was redirected from
extractive mining to the development of gaming and real estate properties in
Colorado. UWIN is considered to be in the development stage since December 27,
1993. In January 1994, UWIN changed its name from Pacific Gold Corporation to
Nevada Gold & Casinos, Inc.
In April 1997, UWIN and Isle of Capri Casinos, Inc. ("Isle") (then known as
Casino America, Inc.), through wholly-owned subsidiaries, entered into a joint
venture, the Isle of Capri-Black Hawk, L.L.C. ("Isle of Capri Black Hawk"). The
purpose of the joint venture was the construction and operation of the Isle of
Capri Black Hawk Casino (the "Casino") and a hotel on the Black Hawk Property.
The Casino opened for business on December 30, 1998, and the Isle of Capri
operates the Casino under a management agreement for a fee based upon a
percentage of the Casino's revenues and operating profit. UWIN's total current
ownership interest in Isle of Capri Black Hawk is 43%.
Construction of a $29 million 237-room hotel on top of the Casino began in
June 1999 and is proceeding under a "guaranteed maximum price" agreement. The
hotel is expected to be completed in July 2000.
UWIN is finalizing the feasibility study and master plan for the
residential, resort, and commercial project on the real property owned by its
wholly-owned subsidiary, Gold Mountain Development, L.L.C., in and near Black
Hawk.
UWIN also owns an approximate 30% interest in Restaurant Connections
International, Inc., which in turn owns eighteen Pizza Hut restaurants and one
KFC restaurant being converted into a Pizza Hut restaurant in Sao Paulo, Brazil.
In addition, UWIN and its subsidiaries own other undeveloped real estate in
Nevada County, California, and gold mining claims in the State of Nevada.
2. Summary of Significant Accounting Policies
The interim financial statements have been prepared by UWIN without audit
and, in the opinion of management, reflect all adjustments of a normal recurring
nature necessary for a fair statement of (a) the results of operations for the
three months ended June 30, 1999, and 1998; (b) the financial position as of
June 30, 1999; and (c) the cash flows for the three-month periods ended June 30,
1999, and 1998. Interim results are not necessarily indicative of results for a
full year.
The consolidated balance sheet presented as of June 30, 1999, has been
derived from the consolidated financial statements that have been audited by
UWIN's independent public accountants. The consolidated financial statements and
notes are condensed as permitted by Regulation SB and do not contain certain
information included in UWIN's annual financial statements and notes. The
consolidated financial statements and notes included should be read in
conjunction with the financial statements and notes included in UWIN's Annual
Report on Form 10-KSB filed in July 1999.
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<PAGE> 7
Cash and equivalents. Interest-bearing deposits and other investments, with
original maturities of three months or less, are considered cash and cash
equivalents.
Real estate and assets held for development. Property held for development
consists of undeveloped land located in and around Black Hawk, Colorado, and
Nevada County, California. UWIN has capitalized certain direct costs of
pre-development activities together with capitalized interest. Property held for
development is carried at the lower of cost or net realizable value.
Furniture, fixtures, and equipment. UWIN depreciates furniture, fixtures,
and equipment over their estimated useful lives, ranging from two to seven
years, using the straight-line method. Expenditures for furniture, fixtures, and
equipment are capitalized at cost. Ordinary maintenance and repairs are charged
to expense, and replacements and betterments are capitalized.
3. Isle of Capri Black Hawk
As stated above, in April 1997, UWIN and Isle, through wholly-owned
subsidiaries, formed Isle of Capri Black Hawk ("Isle of Capri Black Hawk"). The
purpose of Isle of Capri Black Hawk was the construction and operation of the
Casino and a hotel on the Black Hawk Property. The Casino opened for business on
December 30, 1998, and the Isle operates the Casino under a management agreement
for a fee based upon a percentage of the Casino's revenues and operating profit.
UWIN contributed property at a net value of $7.5 million to Isle of Capri Black
Hawk, and its total current ownership interest in Isle of Capri Black Hawk is
43%.
On August 20, 1997, Isle of Capri Black Hawk and Isle of Capri Capital
Corp., a wholly-owned subsidiary of Isle of Capri Black Hawk that had no
operations, assets, or liabilities, issued $75,000,000 of 13% First Mortgage
Notes due 2004, with contingent interest, in order to finance the construction
and development of the Casino. Construction of a $29 million 237-room hotel on
top of the Casino began in June 1999 and is proceeding under a "guaranteed
maximum price" agreement. The hotel is expected to be completed in July 2000.
The rights and obligations of UWIN and Isle's wholly-owned subsidiaries are
governed in part by the Amended and Restated Operating Agreement of the Isle of
Capri Black Hawk (the "Agreement") dated as of July 1997. The Agreement provides
that Isle of Capri Black Hawk will continue until December 31, 2096, or until
the time that dissolution may occur. Pursuant to the Agreement, Isle's
subsidiary contributed cash, land purchase rights, and development costs to Isle
of Capri Black Hawk and UWIN's subsidiary contributed land to Isle of Capri
Black Hawk.
UWIN's 43% ownership of the Isle of Capri Black Hawk is being accounted for
using the equity method of accounting. UWIN's investment in Isle of Capri Black
Hawk is stated at cost, adjusted for its equity in the undistributed earnings or
losses of the project. During UWIN's year ended March 31, 1999, Isle of Capri
Black Hawk's undistributed losses allocable to UWIN through March 28, 1999,
totaled $2,155,710. In accordance with the equity method of accounting, UWIN's
basis was reduced to zero, and the remaining allocated loss of $1,499,436 is not
reflect in the financial statements. During UWIN's quarter ended June 30, 1999,
Isle of Capri Black Hawk's undistributed earnings allocable to UWIN through June
27, 1999, totaled $321,709, reducing the suspended loss to $1,177,727.
7
<PAGE> 8
The following is a summary of condensed financial information pertaining to
the Isle of Capri Black Hawk:
Isle of Capri Black Hawk
Condensed Balance Sheet
as of June 27, 1999
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Current assets $ 15,229
Property and equipment 80,217
Other assets 4,595
-----------
$ 100,041
===========
Current liabilities $ 16,101
Long-term debt 75,634
Members' equity 8,306
-----------
$ 100,041
===========
</TABLE>
Isle of Capri Black Hawk
Condensed Income Statement
for the Two Months Ended June 27, 1999
<TABLE>
<S> <C>
Revenue:
Casino $ 12,835
Food, beverage, and other 1,707
-----------
Total revenue $ 14,542
Operating expenses:
Casino $ 888
Gaming taxes 2,585
Food, beverage, and other 8,274
Depreciation 508
-----------
Total operating expenses $ 12,255
Operating income $ 2,287
Interest expense, net (1,769)
-----------
Net profit $ 518
===========
</TABLE>
4. Segment Reporting
UWIN operates in four business segments: (a) gaming, (b) commercial
and residential real estate development, (c) restaurant franchises, and (d)
mining properties and claims. The gaming segment involves the operation of a
casino entertainment complex in Black Hawk, Colorado. The commercial and
residential real estate segment involves the development of a master-planned
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<PAGE> 9
residential and commercial property project adjacent to Black Hawk, Colorado.
The restaurant franchise segment involves an ownership interest in Pizza Hut
franchises in Sao Paulo, Brazil. The mining property and claims segment involves
the leasing of its property and retaining a royalty interest under the lease.
Summarized financial information concerning UWIN's reportable
segments is shown in the following table. The "Other" column includes
corporate-related items, results of insignificant operations, and segment profit
(loss) income and expense not allocated to reportable segments.
<TABLE>
<CAPTION>
Three months ended June 30, 1999
-----------------------------------------------------------------------------------------------------
Restaurant Real
Gaming Franchise Mining Estate Other Totals
---------- ----------- ---------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ -- $ -- $ 6,000 $ -- $ 10,000 $ 16,000
Segment profit (loss) ( 57,079) -- (11,416) (57,079) (102,742) (228,316
Segment assets -- -- 480,812 2,178,033 -- 2,658,845
Interest expense -- -- 200 55,225 18,976 74,401
Interest income -- -- -- -- 52,526 52,526
Equity in income (loss)
of equity investment
-- (36,337) -- -- -- (36,337)
</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30, 1998
-----------------------------------------------------------------------------------------------------
Restaurant Real
Gaming Franchise Mining Estate Other Totals
------------ ----------- ---------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ -- $ -- $ - $ -- $ 809 $ 809
Segment loss ( 59,489) -- (11,898) (60,699) (107,081) (239,167)
Segment assets 281,628 -- 480,812 2,230,480 -- 2,992,920
Interest expense -- -- -- 1,185 19,476 20,661
Interest income -- -- -- -- -- --
Equity in income (loss)
of equity investment
(381,200) -- -- -- -- (381,200)
</TABLE>
Reconciliation of reportable segment assets to UWIN's consolidated
totals as of June 30 are as follows:
Assets 1999 1998
---- ----
Total assets for reportable segments $2,658,845 $2,992,920
Cash not allocated to segments 42,453 71,396
Other assets not allocated to segments 1,752,931 1,465,430
--------- ---------
Consolidated total assets $4,454,229 $4,529,746
--------- ---------
9
<PAGE> 10
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussions of UWIN's results of operations and
financial position should be read in conjunction with the financial statements
and notes pertaining to them that appear elsewhere in this Form 10-QSB.
Management is of the opinion that inflation and changing prices, including
foreign exchange fluctuations, will have little, if any, effect on UWIN's
financial position or results of operations.
General
UWIN presently expects that future revenues will largely be derived
from its 43% interest in the Casino. UWIN's ownership interest in Isle of Capri
Black Hawk is as a minority owner, and UWIN has no role in the day-to-day
management of the Casino. To date, no distributions have been declared related
to the Casino. While Isle of Capri Black Hawk has prepared projections and
estimates as to when and in what amounts distributions will be made, UWIN cannot
assure that these projections and estimates are accurate or that distributions
can or will be made by the Casino. Although the Members Agreement for the Isle
of Capri Black Hawk provides that distributions of income are to be made
quarterly to members, the distributions may be made only if there is cash in
excess of reasonable cash reserves needed for operating expenses, capital
improvements, debt service, working capital, and bankroll.
Two of UWIN's wholly-owned subsidiaries currently own undeveloped
real property recorded at a cost of $2,178,033 that is located in and around
Black Hawk, Colorado, and in Nevada County, California. Another of UWIN's
wholly-owned subsidiaries currently owns 149 patented mining claims and 321
unpatented lode mining claims situated in the Goldfield Mining District of
Esmeralda and Nye Counties, Nevada. These mining claims are recorded at a cost
of $480,812.
At June 30, 1999, UWIN had other assets in the amount of $128,321,
consisting of prepaid expenses for consulting fees, a security deposit, accounts
receivable, and interest receivable. UWIN also has a note receivable from an
affiliate, Clay County Holdings, Inc. ("CCH"), in the amount of $1,405,965.
Results of Operations
Revenues. Revenues increased $67,717 for the three-month period ended
June 30, 1999, compared to the three months ended June 30, 1998. Current
revenues are attributable to monthly lease payments on the Romarco Nevada, Inc.,
the lease with Goldfield Resources, Inc., interest income from loans to
affiliates, and income from a claim settlement.
General and administrative expenses. General and administrative
expenses decreased $33,176 for the three month period ending June 30, 1999, as
compared to the same period in the prior year. The decrease is primarily
attributed to UWIN paying Mr. Winn's salary directly as of September 1998, and
its contract with Aaminex for the services of Mr. Winn, which was classified as
a general and administrative expense, was terminated in September 1998. Also, a
decrease of $3,751 for telephone expenses and a decrease of approximately $2,100
in office and related expenses contributed to the decrease in general and
administrative expenses.
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<PAGE> 11
Interest expense. Interest expense increased $53,740 for the three
months ended June 30, 1999, as compared to the same period last year. The
current period includes interest on short-term notes.
Salaries. Salary expense increased $19,370 for the three months ended
June 30, 1999, as compared to the same period last year. This change is
attributable to UWIN paying Mr. Winn's salary directly as of September 1998, and
its contract with Aaminex for the services of Mr. Winn, which was classified as
a general and administrative expense, was terminated in September 1998.
Legal and professional fees. Legal and professional fees increased
$23,841 for the three month period ended June 30, 1999, as compared to the three
month period ended June 30, 1998. This increase is attributable to an increase
in outside consulting.
Net loss. Net loss for the three months ended June 30, 1999, was
$264,653, as compared to a net loss of $620,366 for the three months ended June
30, 1998. This decrease in net loss in the amount of $355,713 is due primarily
to the $321,709 in undistributed earnings allocable to UWIN from the Isle of
Capri Black Hawk.
Liquidity and Capital Resources
As of June 30, 1999, UWIN had a cash balance of $42,453. As of the
date of this Form 10-QSB, UWIN has sufficient working capital to fund operations
through August 1999. Because the cash flow stream that would normally have been
distributed to UWIN from the Casino is being used to partially finance the
construction of the hotel on top of the Casino, UWIN's current internal sources
of liquidity are inadequate to cover the costs of pursuit of its business
strategy. Therefore, UWIN will need to continue to use best efforts debt and/or
equity financings to fund the approximately $840,000 per year that it needs to
continue operating. While UWIN has historically been successful in obtaining the
funds necessary to continue operations, UWIN cannot assure that it will be able
to obtain the necessary funding for operations for the next twelve months. If
adequate funds are not available to satisfy either short or long-term capital
requirements, UWIN may be required to limit its operations significantly, sell
assets, or otherwise bring cash flow into balance. The long-term viability of
UWIN is dependent upon successful operation of the casino complex, real estate
development, and the ability to raise additional debt and equity. The
accompanying financial statements have been prepared assuming that UWIN will
continue as a going concern. If UWIN is unable to continue as a going concern,
the values realized from UWIN's assets may not be reflective of the amounts
recoverable upon liquidation.
For the three months ended June 30, 1999, UWIN has received proceeds
of $133,948 from issuing 6,193 shares of common stock, and $39,000 in debt
financing to cover its operating deficit. The current outstanding indebtedness
bears interest at the rate of 12% per annum. In August of 1999, $1,600,000 in
indebtedness was originally scheduled to mature, but UWIN has obtained
extensions on this indebtedness for one year.
Year 2000 Compliance Issues
The year 2000 poses certain issues for business and consumer
computing, particularly the functionality of software for two-digit storage of
dates and special meanings for certain dates, such as 9/9/99. The year 2000 is
also a leap year, which may also lead to incorrect calculations, functions, or
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<PAGE> 12
system failure. The problem exists for many kinds of software, including
software for mainframes, PCs, and embedded systems.
In assessing the effect of the Year 2000 problem on UWIN, management
has identified, and is currently evaluating, the following three general areas:
Internal infrastructure;
Supplier/third-party relationships; and
Contingency plans.
A discussion of the three general areas as well as management's
ongoing and planned actions with regard to each is set forth below:
INTERNAL INFRASTRUCTURE. UWIN is in the process of verifying that all
of its personal computers, servers, and software are Year 2000 compliant. UWIN
is in the process of replacing or upgrading all items that have been found not
to be Year 2000-compliant. UWIN intends to determine if the software vendors of
all its critical applications have represented that their products are Year
2000-compliant. UWIN intends to obtain certification from its vendors that these
systems are Year 2000-compliant. The costs related to these efforts have not
been nor are they expected to be material to UWIN's business, financial
condition, or results of operations.
SUPPLIERS/THIRD-PARTY RELATIONSHIPS. UWIN is in the process of
gathering information from vendor Web sites and available compliance statements
to identify and, to the extent possible, resolve issues involving the Year 2000
problem. UWIN relies on outside vendors for water, electrical, and
telecommunications services as well as climate control, building access, and
other infrastructure services. UWIN does not intend to independently evaluate
the Year 2000 compliance of the systems utilized to supply these services. UWIN
has received no assurance of compliance from the providers of these services.
UWIN cannot assure that these suppliers will resolve any or all Year 2000
problems with these systems before the occurrence of a material disruption to
UWIN's business. Any failure of these third-parties to resolve Year 2000
problems with their systems in a timely manner could have a material adverse
effect on UWIN's business, financial condition, or results of operation.
CONTINGENCY PLANS. UWIN has not currently developed a formal
contingency plan to be implemented as part of its efforts to identify and
correct Year 2000 problems affecting its internal systems. However, if UWIN
deems it necessary, it may take the following actions:
Accelerated replacement of affected equipment or software; Short to
medium-term use of backup equipment and software; Wholesale backup of
existing computerized data prior to January 1, 2000; Increased work
hours for UWIN personnel; and/or Other similar approaches.
If UWIN is required to implement any of these contingency plans,
these plans could have a material adverse effect on UWIN's business, financial
condition, or results of operations.
Based on the actions taken to date as discussed above, UWIN is
reasonably certain that it has or will identify and resolve all Year 2000
problems that could materially adversely affect its business and operations.
12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1- LEGAL PROCEEDINGS
UWIN is not currently engaged in any material litigation that is not
routine or merely incidental to its business.
ITEM 2 - CHANGES IN SECURITIES
The following stock issuances occurred between April 1 and June 30,
1999. Each issuance was exempt from registration pursuant to Section 4(2) and/or
Regulation D under the Act as a transaction by an issuer not involving any
public offering. No underwriter was utilized in the offering and no commissions
were paid.
UWIN issued 6,193 shares of common stock to six investors for an
aggregate purchase price of approximately $133,948.
UWIN issued a total of 328 shares of common stock to one person for
consulting fees, with those shares having an aggregate value of $738.
UWIN issued 45,271 shares of common stock to two individuals as note
conversions in the amount of $111,974.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5 - OTHER INFORMATION
Not applicable.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) Index to Exhibits
*3.1 - Articles of Incorporation
*3.2 - Amendment to Articles of Incorporation
*3.3 - Bylaws
*4.1 - Deed of Trust
*4.2 - Master Secured Note
*4.3 - Note Participation Agreement
*10.2 - Operating Agreement of Isle of Capri Black Hawk, L.L.C.
*10.3 - Amended and Restated Operating Agreement of
Isle of Capri Black Hawk, L.L.C.
*10.4 - Members Agreement
13
<PAGE> 14
*10.5 - License Agreement
27 - Financial Data Schedule
*Exhibits were previously filed and are incorporated by reference.
(B) Reports on Form 8-K
None
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.
Nevada Gold & Casinos, Inc.
By: /s/ H. Thomas Winn
------------------
President
Date: August 13, 1999
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT NO. DESCRIPTION
- ---------- -----------
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 42,453
<SECURITIES> 0
<RECEIVABLES> 132,738
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 303,512
<PP&E> 208,993
<DEPRECIATION> 123,086
<TOTAL-ASSETS> 4,454,229
<CURRENT-LIABILITIES> 1,928,555
<BONDS> 553,321
0
1,414,900
<COMMON> 1,190,815
<OTHER-SE> 8,928,740
<TOTAL-LIABILITY-AND-EQUITY> 4,454,229
<SALES> 0
<TOTAL-REVENUES> 68,526
<CGS> 0
<TOTAL-COSTS> 296,842
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 74,401
<INCOME-PRETAX> (264,653)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (264,653)
<EPS-BASIC> (.03)
<EPS-DILUTED> 0
</TABLE>
