<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 SEPTEMBER 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 10,072,810 as of November 8, 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 September 30, 1999, and March 31, 1999 3
Statements of Operations for the Three Months Ended
September 30, 1999, and 1998 4
Statements of Operations for the Six Months Ended
September 30, 1999, and 1998 5
Statements of Cash Flows for the Six Months Ended
September 30, 1999, and 1998 6
Notes to Interim Financial Statements 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 12
PART II - OTHER INFORMATION 15
ITEM 1 - LEGAL PROCEEDINGS 15
ITEM 2 - CHANGES IN SECURITIES 15
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES 15
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 15
ITEM 5 - OTHER INFORMATION 15
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 16
SIGNATURES 16
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, March 31,
1999 1999
------------ ------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 53,597 $ 161,234
Notes receivable -- 154,763
Other assets 218,307 153,315
------------ ------------
TOTAL CURRENT ASSETS 271,904 469,312
------------ ------------
Isle of Capri Black Hawk, L.L.C. -- --
Restaurant Connections International, Inc. -- --
Colorado Real Estate (Gold Mountain Development, L.L.C.) 2,459,017 1,807,489
Mining Properties (Goldfield Resources, Inc.) 480,812 480,812
California Real Estate (Sunrise Land and Minerals, Inc.) 371,750 371,750
Note receivable from affiliate 1,424,124 1,306,547
Furniture, fixtures, and equipment, net of accumulated depreciation of
$114,767 and $131,470 on March 31, and September 30, 1999, respectively 77,523 93,836
------------ ------------
TOTAL ASSETS $ 5,085,130 $ 4,529,746
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 158,375 $ 102,494
Accrued interest payable 181,650 125,993
Short term notes payable 1,832,098 1,735,000
Current portion of long term debt 44,567 28,942
------------ ------------
TOTAL CURRENT LIABILITIES 2,216,690 1,992,429
------------ ------------
LONG-TERM DEBT
Mortgages payable, net of current portion 28,701 38,731
Notes payable, net of current portion 514,093 508,240
------------ ------------
TOTAL LONG-TERM DEBT 542,794 546,971
------------ ------------
TOTAL LIABILITIES 2,759,484 2,539,400
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, $10 par value, 500,000 shares authorized, 141,490 shares
outstanding at March 31 and September 30, 1999 1,414,900 1,414,900
Common stock, $.12 par value, 20,000,000 shares authorized, 9,811,664 and
10,024,764 shares outstanding at March 31, and September 30, 1999,
respectively 1,202,972 1,177,400
Additional paid in capital 9,103,234 8,695,495
Accumulated deficit prior to development stage (12/27/93) (2,296,077) (2,296,077)
Accumulated deficit during development stage (7,099,383) (7,001,372)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 2,325,646 1,990,346
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,085,130 $ 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
September 30
1999 1998
------------ ------------
<S> <C> <C>
REVENUES
Royalty income $ 8,000 $ 4,000
Gain on sale-part interest Isle of Capri
Black Hawk -- 147,851
Gain on sale of Colorado Real Estate 435,119 197,304
Interest income 56,868 8,895
Other income 11,065 --
------------ ------------
TOTAL REVENUES 511,052 358,050
------------ ------------
EXPENSES
General and administrative 81,984 103,750
Interest expense 72,077 79,234
Salaries 84,109 65,319
Legal and professional fees 105,957 113,017
Other 18,859 15,114
------------ ------------
TOTAL EXPENSES 362,986 376,434
------------ ------------
EQUITY IN EARNINGS (LOSS) OF ISLE OF CAPRI
BLACK HAWK -- 56,148
EQUITY IN EARNINGS (LOSS) OF RCI 18,576 --
------------ ------------
NET INCOME (LOSS) $ 166,642 $ 37,764
============ ============
PER SHARE INFORMATION
Net income (loss) $ 166,642 $ 37,764
Preferred stock dividends accumulated (42,796) (36,347)
------------ ------------
Income (loss) available to common stockholders $ 123,846 $ 1,417
============ ============
Weighted average number of common
shares outstanding 9,935,592 9,076,387
============ ============
Net Income (Loss) per common share $ .02 $ (.00)
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
September 30 Cumulative Amounts
--------------------------------- During Development
1999 1998 Stage (Since 12/27/93)
------------ ------------ ----------------------
<S> <C> <C> <C>
REVENUES
Royalty income $ 14,000 $ 4,000 $ 249,000
Gain on sale-part interest Isle of Capri
Black Hawk -- 147,851 282,967
Gain on sale of Colorado Real Estate 435,119 197,304 197,304
Interest income 109,394 9,704 196,087
Other income 21,065 -- 961,556
------------ ------------ ------------
TOTAL REVENUES 579,578 358,859 1,886,914
------------ ------------ ------------
EXPENSES
General and administrative 150,402 205,344 2,284,644
Interest expense 146,478 99,895 1,071,648
Salaries 169,340 131,402 1,008,571
Legal and professional fees 165,702 148,922 2,382,545
Other 27,905 30,845 511,260
------------ ------------ ------------
TOTAL EXPENSES 659,827 616,408 7,258,668
------------ ------------ ------------
EQUITY IN EARNINGS (LOSS) OF ISLE OF CAPRI
BLACK HAWK -- (325,052) (1,627,779)
EQUITY IN EARNINGS (LOSS) OF RCI (17,761) -- (99,850)
------------ ------------ ------------
NET INCOME (LOSS) $ (98,010) $ (582,601) $ (7,099,383)
============ ============ ============
PER SHARE INFORMATION
Net income (loss) $ (98,010) $ (582,601) $ (7,099,383)
Preferred stock dividends accumulated (85,243) (78,678) (428,108)
------------ ------------ ------------
Income (loss) available to common stockholders $ (183,253) $ (661,279) $ (7,527,491)
============ ============ ============
Weighted average number of common
shares outstanding 9,905,960 8,991,060 7,467,808
============ ============ ============
Net income (loss) per common share $ (.02) $ (.08) $ (1.01)
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
September 30 Cumulative Amounts
--------------------------------- During Development
1999 1998 Stage (Since 12/27/93)
------------ ------------ ----------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (98,010) $ (582,601) $ (7,099,382)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation 16,703 15,822 122,664
Equity in net loss of Isle of Capri Black Hawk -- 268,605 1,627,779
Equity in net loss of RCI 17,761 -- 99,850
Consultant and investment banker option expense 44,796 27,444 1,066,769
Gain on sale-part interest Isle of Capri
Black Hawk -- (147,851) (282,967)
Gain on sale of Colorado real estate -- -- (197,304)
Other -- -- 231
Changes in operating assets and liabilities:
Other (11,125) (655,536) 57,312
Accounts payable and accrued liabilities 129,149 69,185 1,446,556
------------ ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES 99,274 (1,004,932) (3,158,492)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate and assets held for development (446,022) (497,104) (1,995,628)
Purchase of furniture, fixtures, and equipment (390) (3,227) (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 (105,603) -- (1,612,420)
Proceeds on disposition of property -- -- 45,746
------------ ------------ ------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (552,015) (500,331) (3,388,386)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 169,000 1,416,667 7,287,044
Common stock issued for cash, net of
offering costs 287,873 412,628 2,835,091
Fractional shares redeemed -- -- (36)
Payments on debt (111,769) (407,950) (3,824,411)
Salaries contributed by officers -- -- 1,000
Prepaid stock subscription -- -- 295,500
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 345,104 1,421,345 6,594,188
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents (107,637) (83,918) 47,310
Beginning balance - cash and cash equivalents 161,234 154,367 6,287
------------ ------------ ------------
Ending balance - cash and cash equivalents $ 53,597 $ 70,449 $ 53,597
============ ============ ============
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 90,897 $ 59,525 $ 645,855
------------ ------------ ------------
Cash paid for taxes $ -- $ -- $ --
------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
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 is
considered to be in the development stage since December 27, 1993.
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 in Black Hawk,
Colorado. 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 a 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 nineteen Pizza Hut restaurants 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 September 10, 1999, and 1998; (b) the results of
operations for the six months ended September 30, 1999, and 1998; (c) the
financial position as of September 30, 1999; and (d) the cash flows for the
six-month periods ended September 30, 1999, and 1998. Interim results are not
necessarily indicative of results for a full year.
The consolidated balance sheet presented as of September 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.
7
<PAGE> 8
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, L.L.C. ("Isle of Capri Black
Hawk"). The purpose of Isle of Capri Black Hawk was the construction and
operation of the Casino and a hotel in Black Hawk, Colorado. 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 July 1999 and is proceeding under a "guaranteed
maximum price" agreement. The hotel is expected to be completed in the summer of
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 limited liability company is dissolved. 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
September 30, 1999, Isle of Capri Black Hawk's undistributed earnings allocable
to UWIN through September 26, 1999, totaled $910,790, reducing the suspended
loss to $266,937.
8
<PAGE> 9
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 SEPTEMBER 26, 1999
<TABLE>
<CAPTION>
(in
thousands)
<S> <C>
Current assets $ 15,559
Property and equipment 83,103
Other assets 4,513
------------
Total assets $ 103,175
============
</TABLE>
9
<PAGE> 10
<TABLE>
<S> <C>
Current liabilities $ 16,871
Long-term debt 75,428
Members' equity 10,876
------------
Total liability and equity $ 103,175
============
</TABLE>
ISLE OF CAPRI BLACK HAWK
CONDENSED INCOME STATEMENT
FOR THE FIVE MONTHS ENDED SEPTEMBER 26, 1999
<TABLE>
<S> <C>
Revenue:
Casino $ 33,221
Food, beverage, and other 4,499
------------
Total revenue $ 37,720
Operating expenses:
Casino $ 2,188
Gaming taxes 6,525
Food, beverage, and other 21,024
Depreciation 820
------------
Total operating expenses $ 30,557
Operating income $ 7,163
Interest expense, net (4,529)
------------
Net profit $ 2,634
============
</TABLE>
4. Gold Mountain Development, L.L.C.
UWIN's wholly-owned subsidiary, Gold Mountain Development, L.L.C.
("Gold Mountain"), previously owned approximately 170 acres of undeveloped land
in and near Black Hawk, Colorado. In October 1999, Gold Mountain completed a
second land exchange with Proland Management, L.L.C., in which it acquired an
additional 70 acres, for a total of 240 acres. In addition, an Intergovernmental
Agreement between the City of Black Hawk, the City of Central, and Gilpin
County, was approved in October 1999. The Intergovernmental Agreement sets the
stage for UWIN's annexation petition into the City of Black Hawk. Currently,
UWIN is conducting feasibility studies and surveys of the land to develop a
master plan and to facilitate development of the land into a master-planned
resort community.
5. 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 residential and
commercial property
10
<PAGE> 11
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>
SIX MONTHS ENDED SEPTEMBER 30, 1999
------------------------------------------------------------------------------------------------
Real Restaurant
Gaming Estate Franchise Mining Other Totals
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ -- $ 435,119 $ -- $ 14,000 $ 21,065 $ 470,184
Segment profit (loss) (20,062) (20,062) -- (4,012) (36,113) (80,249)
Segment assets -- 2,830,767 -- 480,812 -- 3,311,579
Interest expense -- 106,021 -- 367 40,090 146,478
Interest income -- -- -- -- 109,394 109,394
Equity in income (loss)
of equity investment -- -- 17,761 -- -- 17,761
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED SEPTEMBER 30, 1998
------------------------------------------------------------------------------------------------
Real Restaurant
Gaming Estate Franchise Mining Other Totals
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ 147,851 $ -- $ -- $ 4,000 $ 207,008 $ 358,859
Segment loss (64,388) (64,388) -- (12,878) (115,896) (239,167)
Segment assets 331,223 2,119,611 -- 480,812 -- 2,931,646
Interest expense 36,250 24,301 -- 241 39,103 99,895
Interest income -- -- -- -- -- --
Equity in income (loss)
of equity investment (325,052) -- -- -- -- (325,052)
</TABLE>
Reconciliation of reportable segment assets to UWIN's consolidated
totals as of September 30 are as follows:
<TABLE>
<CAPTION>
Assets 1999 1998
------ ---------- ----------
<S> <C> <C>
Total assets for reportable segments: $3,311,579 $2,931,646
Cash not allocated to segments: 53,597 70,449
Other assets not allocated to segments: 1,719,954 893,945
---------- ----------
Consolidated total assets: $5,085,130 $3,896,040
---------- ----------
</TABLE>
11
<PAGE> 12
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 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. Although the Amended and Restated Operating Agreement and 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, and
subject to the limitations set forth in the Indenture for the $75 million debt
offering that financed the Casino construction. The Indenture does permit
distributions to Members for tax payments that will be approximately 40% of the
Isle of Capri Black Hawk's pre-tax income.
Two of UWIN's wholly-owned subsidiaries currently own undeveloped real
property recorded at a cost of $2,830,767 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 September 30, 1999, UWIN had other assets in the amount of $218,307,
consisting of prepaid expenses for consulting fees, and a security deposit. UWIN
also has a note receivable from an affiliate, Clay County Holdings, Inc.
("CCH"), in the amount of $1,424,124.
Results of Operations
REVENUES. Revenues increased $153,002 for the three-month period ended
September 30, 1999, compared to the three months ended September 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, income from a claim settlement, and a gain recorded on a
land exchange.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses decreased $21,766 for the three month period ending September 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 beginning September 1998,
and its contract with Aaminex for the services of Mr. Winn, which was classified
as a general and administrative expense, was terminated as of September 1, 1998.
Also, a decrease of $5,100 for title and property expenses contributed to the
decrease in general and administrative expenses.
INTEREST EXPENSE. Interest expense decreased $7,157 for the three
months ended September 30, 1999, as compared to the same period last year.
12
<PAGE> 13
SALARIES. Salary expense increased $18,790 for the three months ended
September 30, 1999, as compared to the same period last year. The increase is
primarily attributed to UWIN paying Mr. Winn's salary directly beginning
September 1998, and its contract with Aaminex for the services of Mr. Winn,
which was classified as a general and administrative expense, was terminated as
of September 1, 1998.
LEGAL AND PROFESSIONAL FEES. Legal and professional fees decreased
$7,060 for the three month period ended September 30, 1999, as compared to the
three month period ended September 30, 1998. This decrease is attributable to a
decrease in outside consulting.
NET INCOME. Net income for the three months ended September 30, 1999,
was $166,642, as compared to a net income of $37,765 for the three months ended
September 30, 1998. This increase in net income is due to a gain recognized on a
land exchange that took place on September 27, 1999.
Liquidity and Capital Resources
As of September 30, 1999, UWIN had a cash balance of $53,597. 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 September 30, 1999, UWIN has received
proceeds of $53,925 from issuing 34,794 shares of common stock, and $130,000 in
debt financing to cover its operating deficit. The current outstanding
indebtedness bears interest at rates from 9-12% per annum.
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 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 has evaluated the following three general areas:
13
<PAGE> 14
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 has received verification from its
information technology contractor that all of its personal computers, servers,
and software are now Year 2000-compliant. UWIN will continue to monitor the
vendors of its critical software applications to ensure that any Year 2000
problems that may be discovered late are immediately brought to our attention
and remedied. To date, all critical software vendors of UWIN have represented
that their products are Year 2000-compliant. The costs incurred to ensure Year
2000 compliance of UWIN's internal systems were not material to UWIN's business,
financial condition, or results of operations.
SUPPLIERS/THIRD-PARTY RELATIONSHIPS. UWIN has received verification
from Isle of Capri, UWIN's banking and financial institutions, its stock
transfer agent, and all third-party entities that are critical to UWIN's
successful operation that their computerized systems are Year 2000-compliant and
that they have or are in the process of instituting contingency plans in the
event unforeseen Year 2000 matters arise. Because UWIN is unable to personally
determine whether these entities are in fact Year 2000-compliant, UWIN cannot
assure that these entities are Year 2000-compliant, and cannot assure that none
of them will suffer from any Year 2000-related problems. Any serious Year 2000
problems with any of these critical entities could have a material effect on
UWIN's business, financial condition, or results of operations.
UWIN relies on outside vendors for water, electrical, and
telecommunications services as well as climate control, building access, and
other infrastructure services. UWIN cannot 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 developed a routine backup system for its
computerized data. The backup system includes a mirroring hard drive system that
constantly maintains duplicates of all data stored on UWIN's computer network
system, as well as tape backups that are conducted on a regular basis, with the
completed backup tape then taken off premises. However, if unforeseen Year 2000
issues do arise, UWIN may take one or more of the following actions:
accelerated replacement of affected equipment or software;
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.
14
<PAGE> 15
Based on the actions taken to date as discussed above, UWIN is
reasonably certain that it has identified or will identify and resolve all Year
2000 problems that could materially adversely affect its business and
operations.
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 July 1 and September 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, or was made pursuant to an S-8 registration statement as
indicated below. No underwriter was utilized in the offering and no commissions
were paid.
UWIN issued 36,308 shares of common stock to accredited investors for
an aggregate purchase price of approximately $56,651.
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.
15
<PAGE> 16
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
3.4 - Amended and Restated Articles of Incorporation
(filed with this 9/99 10-QSB)
3.5 - Amended Bylaws of Nevada Gold & Casinos, Inc.
(filed with this 9/99 10-QSB)
*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
*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: November 15, 1999
16
<PAGE> 1
EXHIBIT 3.4
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
NEVADA GOLD & CASINOS, INC.
Pursuant to Title 7, Section 78.403 of the Nevada Revised Statutes,
below are the Restated Articles of Nevada Gold and Casinos, Inc. as amended and
adopted to date:
ARTICLE ONE. The name of the corporation is NEVADA GOLD & CASINOS, INC.
ARTICLE TWO. The address of the corporation's principal office is 50 W. Liberty
St., Suite 880 in the City of Reno, County of Washoe, State of Nevada. The
initial agent for service of process at that address is Nevada Agency and Trust
Company.
ARTICLE THREE. The purposes for which the corporation is organized are to engage
in any activity or business not in conflict with the laws of the State of Nevada
or of the United States of America.
ARTICLE FOUR. (CAPITAL STOCK). The corporation shall have authority to issue an
aggregate of TWENTY MILLION FIVE HUNDRED THOUSAND (20,500,000) shares of capital
stock. The authorized shares of the Company are divided into two classes, Common
Stock and Preferred Stock.
Twenty million (20,000,000) shares of common stock are authorized
having a par value of twelve cents ($0.12) per share and will be voting stock.
Five hundred thousand (500,000) shares of preferred stock, which may be
issued in one or more series, are authorized having a par value of $10.00 per
share and is non-voting stock.
No holder of shares of capital stock of the corporation shall be
entitled, as such, to any preemptive or preferential right to subscribe to any
unissued stock or any other securities which the corporation may now or
thereafter be authorized to issue. No holder of shares of capital stock of the
corporation shall be entitled, as such, to any preemptive or preferential right
to subscribe to any unissued stock or any other securities which the corporation
may now or thereafter be authorized to issue.
The corporation's capital stock may be issued and sold from time to
time for such consideration as may be fixed by the Board of Directors, provided
that such consideration so fixed is not less than par value. Upon the
determination of the Board of Directors, the shares of stock owned by any
shareholder may be redeemed by the Company if the ownership of stock of the
Company by such shareholder prevents the issuance or renewal of any gaming
license which the Company or any of its subsidiaries or affiliates may have. At
the determination of the Board of Directors, the shareholder's stock may be
redeemed at cost or market, whichever is less.
ARTICLE FIVE. The affairs of the corporation shall be governed by a Board of
Directors of not less than three (3) directors. The names and addresses of the
members of the Board of Directors are:
<PAGE> 2
<TABLE>
<CAPTION>
NAME ADDRESS
<S> <C>
H. Thomas Winn 3040 Post Oak Blvd., Suite 675
Houston, Texas 77056
Paul J. Burkett 3040 Post Oak Blvd., Suite 675
Houston, Texas 77056
William G. Jayroe 3040 Post Oak Blvd., Suite 675
Houston, Texas 77056
Hubert T. Wen 3040 Post Oak Blvd., Suite 675
Houston, Texas 77056
</TABLE>
Directors of the corporation need not be residents of the State of
Nevada and need not own shares of the corporation's stock.
ARTICLE SIX. The capital stock of the corporation, after the amount of the
subscription price or par value has been paid in, shall not be subject to pay
debts of the corporation, and no paid up stock and no stock issued as fully paid
up shall ever be assessable or assessed.
ARTICLE SEVEN. The name and address of each incorporator of the corporation is
as follows:
<TABLE>
<CAPTION>
NAME ADDRESS
<S> <C>
Alexander H. Walker, Jr. 840 Kennecott Bldg.
Salt Lake City, Utah
Cecil Ann Walker 840 Kennecott Bldg.
Salt Lake City, Utah
Marjorie L. Hall 840 Kennecott Bldg.
Salt Lake City, Utah
</TABLE>
ARTICLE EIGHT. The period of existence of the corporation shall be perpetual.
ARTICLE NINE. The initial By-Laws of the corporation shall be adopted by its
Board of Directors. The power to alter, amend, or repeal the By-Laws, or to
adopt new By-Laws, shall be vested in the Board of Directors, except as
otherwise may be specifically provided in the By-Laws.
ARTICLE TEN. Meetings of stockholders shall be held at such place within or
without the State of Nevada as may be provided by the By-Laws of the
corporation. Special meetings of the stockholders may be called by the President
or any other executive officer of the corporation, the Board of Directors, or
any member thereof, or by the record holder or holders of at least ten percent
(10%) of all shares entitled to vote at the meeting. Any action otherwise
required to be taken at a meeting of the stockholders, except election of
directors, may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by stockholders having at least a majority
of the voting power.
ARTICLE ELEVEN. No contract or other transaction between the corporation and any
other corporation, whether or not a majority of the shares of the capital stock
of such other corporation is owned by this corporation, and no act of this
corporation shall in any way be affected or invalidated by the fact that any of
the directors of this corporation are pecuniarily or otherwise interested in, or
are directors or officers of such other corporation. Any director of this
corporation, individually, or any firm of which such director may be a member,
may be a party to, or may be pecuniarily or otherwise interested in any contract
or transaction of the corporation; provided, however, that the fact that he or
such firm is so interested shall be
<PAGE> 3
disclosed or shall have been known to the Board of Directors of this
corporation, or a majority thereof; and any director of this corporation who is
also a director or officer of such other corporation, or who is so interested,
may be counted in determining the existence of a quorum at any meeting of the
Board of Directors of this corporation that shall authorize such contract or
transaction, and may vote thereat to authorize such contract or transaction,
with like force and effect as if he were not such director or officer of such
other corporation or not so interested.
/s/ /s/
- -------------------------- -----------------------------
President Secretary
AFFIDAVIT
STATE OF TEXAS
COUNTY OF HARRIS
Before me, the undersigned authority, on this day personally appeared
H. THOMAS WINN, President of Nevada Gold & Casinos, Inc., who after being by me
first duly sworn on his oath deposed and stated:
"I, H. Thomas Winn, am President of Nevada Gold & Casinos, Inc. I have
been authorized to execute the Restated Articles of Incorporation by resolution
of the Board of Directors dated February 17, 1998. The Restated Articles of
Incorporation correctly states the text of the Articles of Incorporation of
Nevada Gold & Casinos, Inc., as amended, as of February 17, 1998."
/s/
----------------------------------
H. Thomas Winn
SUBSCRIBED AND SWORN TO BEFORE ME to certify which witness my hand and
seal of office this the ____ day of October, 1998.
(SEAL)
/s/
----------------------------------
Notary Public in and for
the State of Texas
My Commission expires:
<PAGE> 4
AFFIDAVIT
STATE OF TEXAS
COUNTY OF HARRIS
Before me, the undersigned authority, on this day personally appeared
DAVID K. MCCALEB, Secretary of Nevada Gold & Casinos, Inc., who after being by
me first duly sworn on his oath deposed and stated:
"I, David K. McCaleb, am Secretary of Nevada Gold & Casinos, Inc. I
have been authorized to execute the Restated Articles of Incorporation by
resolution of the Board of Directors dated February 17, 1998. The Restated
Articles of Incorporation correctly states the text of the Articles of
Incorporation of Nevada Gold & Casinos, Inc., as amended, as of February 17,
1998."
/s/
-----------------------------
David K. McCaleb
SUBSCRIBED AND SWORN TO BEFORE ME to certify which witness my hand and
seal of office this the ____ day of October, 1998.
(SEAL)
/s/
-----------------------------
Notary Public in and for
the State of Texas
My Commission expires:
<PAGE> 1
EXHIBIT 3.5
BYLAWS
OF
NEVADA GOLD & CASINOS, INC.
ARTICLE I
OFFICES
1.1 PRINCIPAL OFFICE. The Corporation is formed under the laws under
the State of Nevada, and its principal office shall be in Harris County, Texas.
1.2 OTHER OFFICES. The Corporation may also have offices located in
other places both within and without the State of Nevada as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
SHAREHOLDERS
2.1 TIME AND PLACE OF MEETING. All meetings of the Shareholders shall
be held at the time and at a place within or without the State of Nevada as
determined by the Board of Directors.
2.2 ANNUAL MEETINGS. Annual meetings of the Shareholders shall be held
at a time and place fixed by the Board of Directors. At the annual meeting, the
Shareholders shall elect Directors and transact any other business that may
properly be brought before the meeting.
2.3 SPECIAL MEETINGS. Special meetings of the Shareholders may be
called at any time by the President or the Board of Directors, and the Secretary
shall issue a notice to all Shareholders of the time, date, and place of the
meeting. The notice shall state the purpose or purposes of the proposed meeting.
Business transacted at special meetings shall be confined to the purposes stated
in the notice of the meeting.
2.4 NOTICE. Written or printed notice shall state the place, day, and
hour of any Shareholders' meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called. The notice shall be
delivered in person or by mail, private courier, facsimile transmission, e-mail,
telegraph, or other form of wire or wireless communication not less than ten nor
more than sixty days before the date of the meeting, by or at the direction of
the President, Secretary, Officer, or other person calling the meeting, to each
Shareholder of record entitled to vote at the meeting. If the number of
authorized shares is to be increased, then at least
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 1
<PAGE> 2
thirty days' notice of the meeting shall be given, or any longer period of
notice that may be required by the Nevada Private Corporations Act.
Notice of an annual meeting need not include a description of
the purpose or purposes of the meeting, except the purpose or purposes shall be
stated with respect to:
a. an amendment to the Articles of Incorporation of the
Corporation;
b. a merger or share exchange in which the Corporation is a
party and, with respect to a share exchange, in which the Corporation's
shares will be acquired;
c. a sale, lease, exchange, or other disposition, other than
in the usual and regular course of business, of all of or substantially
all of the property of the Corporation or of another entity that this
Corporation controls, in each case with or without goodwill;
d. a dissolution of the Corporation; or
e. any other purpose for which a statement of purpose is
required by the Nevada Private Corporations Act.
If requested by the person or persons lawfully calling the meeting, the
Secretary shall give notice of the meeting at corporate expense. No notice need
be sent to any Shareholder if three successive notices mailed to the last known
address of the Shareholder have been returned as undeliverable until another
address for the Shareholder is provided to the Corporation by the Shareholder.
In order to be entitled to receive notice of any meeting, a Shareholder shall
advise the Corporation in writing of any change in the Shareholder's mailing
address as shown on the Corporation's current record of Shareholders. If mailed,
the notice shall be deemed to be delivered when deposited in the United States
mail, postage prepaid, to the Shareholder at his or her address as it appears on
the Corporation's current record of Shareholders. When a meeting is adjourned to
another date, time, or place, notice need not be given of the new date, time, or
place if the new date, time, or place of the meeting is announced before
adjournment of the meeting at which the adjournment is taken. At the adjourned
meeting, the Corporation may transact any business that may have been transacted
at the original meeting. If the adjournment is for more than 120 days, or if a
new record date is fixed for the adjourned meeting, a new notice of the
adjourned meeting shall be given to each Shareholder of record entitled to vote
at the meeting as of the new record date.
2.5 WAIVER OF NOTICE. A Shareholder may waive notice of a meeting
before or after the time and date of the meeting by a writing signed by the
Shareholder. This waiver shall be delivered to the Corporation for filing with
the corporate records. Further, by attending a meeting either in person or by
proxy, a Shareholder waives objection to lack of notice or defective notice of
the meeting unless the Shareholder objects at the beginning of the meeting to
the holding of the meeting or the transaction of business at the meeting because
of lack of notice or defective notice. By attending the meeting, the Shareholder
also waives any objection to consideration at the meeting of a particular matter
within the purpose or purposes described in the meeting notice unless the
Shareholder objects to considering the matter when it is presented.
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 2
<PAGE> 3
2.6 RECORD DATE. The Board of Directors may fix in advance a record
date for the purpose of determining Shareholders entitled to (a) notice of or to
vote at a meeting of Shareholders; (b) receive distributions or share dividends;
(c) demand a special meeting; or (d) take any other action; and the record date
shall not be less than ten nor more than sixty days prior to the meeting, or the
Board of Directors may close the stock transfer books for this purpose for a
period of not less than ten nor more than sixty days prior to the meeting. In
the absence of any action by the Board of Directors, the date upon which the
notice of the meeting is sent to the Shareholders, or the date on which the
Board adopted a resolution providing for a distribution, if that occurs, shall
be the record date. When a determination of Shareholders entitled to vote at any
meeting of Shareholders is made as provided in this Section, the determination
shall apply to any adjournment of the meeting unless the Board of Directors
fixes a new record date, and the Board must do so if the meeting is adjourned to
a date more than 120 days after the date fixed for the original meeting.
Notwithstanding the above, the record date for determining the Shareholders
entitled to take action without a meeting or entitled to be given notice of
action taken without a meeting shall be the date a writing upon which the action
is taken is first received by the Corporation. The record date for determining
Shareholders entitled to demand a special meeting shall be the date of the
earliest of any of the demands pursuant to which the meeting is called.
2.7 LIST OF SHAREHOLDERS. The Officer or agent of the Corporation
having charge of the stock transfer ledger for shares of the Corporation shall
make, at least ten days before each meeting of the Shareholders, a complete list
of the Shareholders entitled to vote at the meeting or any adjournment of a
meeting arranged by voting groups and, within each group by class or series of
shares, and shall be in alphabetical order, with the address of and the number
of voting shares held by each. This list shall be kept on file at the registered
office of the Corporation and shall be subject to inspection by any Shareholder
at any time during usual business hours for a period of ten days prior to the
meeting or two days after notice is given, and continuing through the meeting
and any adjournment of the meeting. The original stock transfer books shall be
prima facie evidence of the Shareholders entitled to examine the list or
transfer books or to vote at any meeting of Shareholders. Any Shareholder or
Shareholder's agent or attorney may copy the list during regular business hours
and during the period it is available for inspection, provided (a) the
Shareholder has been a Shareholder for at least three months immediately
preceding the demand or holds at least five percent of all outstanding shares of
any class of shares as of the date of the demand, (b) the demand is made in good
faith for a purpose reasonably related to the demanding Shareholder's interest
as a Shareholder, (c) the Shareholder describes with reasonable particularity
the purpose and the records the Shareholder desires to inspect, (d) the records
are directly connected with the described purpose, and (e) the Shareholder pays
a reasonable charge covering the costs of labor and material for the copies, not
to exceed the estimated cost of production and reproduction.
2.8 RECOGNITION PROCEDURE FOR BENEFICIAL OWNERS. The Board of Directors
may adopt by resolution a procedure that allows a Shareholder of the Corporation
to certify in writing to the Corporation that all or a portion of the shares
registered in the name of the Shareholder are held for the account of a
specified person or persons. The resolution may set forth:
a. the types of nominees to which it applies;
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 3
<PAGE> 4
b. the rights or privileges that the Corporation will
recognize in a beneficial owner, which may include rights and
privileges other than voting;
c. the form of certification and the information to be
contained in it;
d. if the certification is with respect to a record date, the
time within which the certification must be received by the
Corporation;
e. the period for which the nominee's use of the procedure is
effective; and
f. any other provisions with respect to the procedure that the
Board deems necessary or desirable.
Upon receipt by the Corporation of a certificate complying with the procedure
established by the Board of Directors, the person specified in the certification
shall be deemed, for the purpose or purposes set forth in the certification, to
be the registered Shareholder of the number of shares specified in place of the
Shareholder making the certification.
2.9 QUORUM. A majority of the votes entitled to be cast on a matter by
a voting group shall constitute a quorum of that voting group for action on the
matter. The holders of a majority of the issued and outstanding shares that are
entitled to vote, represented in person or by proxy, shall constitute a quorum
at all meetings of the Shareholders for the transaction of business except as
otherwise provided by the Nevada Private Corporations Act ("the Act"). If,
however, a quorum is not present or represented at any meeting of the
Shareholders, the Shareholders entitled to vote, represented in person or by
proxy, shall have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present or
represented. When any adjourned meeting is reconvened and a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally notified. Once a quorum is constituted, the
Shareholders present or represented by proxy at a meeting may continue to
transact business until adjournment, notwithstanding the subsequent withdrawal
from the meeting of a number of Shareholders which leaves less than a quorum.
2.10 VOTING. When a quorum is present at any meeting, the vote of the
holders of a majority of the shares present or represented by proxy at the
meeting and entitled to vote shall be the act of the Shareholders, unless the
vote of a different number is required by the Act, the Articles of
Incorporation, or these Bylaws.
2.11 PROXY. Each Shareholder shall, at every meeting of the
Shareholders, be entitled to one vote in person or by proxy for each share
having voting power held by the Shareholder. A shareholder may also appoint a
proxy by transmitting or authorizing the transmission of a telegram, facsimile,
or other electronic transmission providing a written statement of the
appointment to the proxy, a proxy solicitor, proxy support service organization,
or other person duly authorized by the proxy to receive appointments as agent
for the proxy, or to the corporation. The transmitted appointment shall set
forth or be transmitted with written evidence from which it can be determined
that the shareholder transmitted or authorized the
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 4
<PAGE> 5
transmission of the appointment. Every proxy must be executed in writing by the
Shareholder or by his or her duly-authorized attorney-in-fact, and shall be
filed with the Secretary of the Corporation prior to or at the time of the
meeting. Each proxy is effective when received by the Corporation and is valid
for eleven months from the date of its execution unless otherwise provided in
the proxy. Any complete copy, including an electronically transmitted facsimile,
of any appointment of a proxy may be substituted for or used in lieu of the
original appointment for any purpose for which the original appointment could be
used.
Revocation of a proxy does not affect the right of the
Corporation to accept the proxy's authority unless (a) the Corporation had
notice that the appointment was coupled with an interest and notice that the
interest has been extinguished is received by the Secretary or other Officer or
agent authorized to tabulate votes before the proxy exercises the authority
granted in the appointment or (b) other notice of the revocation of the
appointment is received by the Secretary or other Officer or agent authorized to
tabulate votes before the proxy exercises the authority granted in the
appointment. Other notice of revocation may, in the discretion of the
Corporation, be deemed to include the appearance at a Shareholders' meeting of
the Shareholder who granted the proxy and the Shareholder voting in person on
any matter subject to a vote at the meeting.
The death or incapacity of the Shareholder appointing a proxy
does not affect the right of the Corporation to accept the proxy's authority
unless the Secretary or other Officer or agent authorized to tabulate votes
receives notice of the death or incapacity before the proxy exercises the
authority granted in the appointment.
The Corporation shall not be required to recognize an
appointment as irrevocable if it has received a writing revoking the appointment
signed by the Shareholder (including a Shareholder who is a successor to the
Shareholder who granted the proxy) either personally or by his or her
attorney-in-fact, notwithstanding that the revocation may be a breach of an
obligation of the Shareholder to another person not to revoke the appointment.
Subject to Section 2.13 and any express limitation on the
proxy's authority appearing on the appointment form, the Corporation is entitled
to accept the proxy's vote or other action as that of the Shareholder making the
appointment.
2.12 VOTING OF SHARES. Each Shareholder shall be entitled to one vote
for each outstanding share owned by the Shareholder, regardless of class, except
to the extent that the voting rights of the shares of any class or classes are
limited or denied by the Articles of Incorporation as permitted by the Act.
Cumulative voting shall not be permitted in the election of Directors or for any
other purpose.
At each election of Directors, the number of candidates
equaling the number of Directors to be elected who obtain the highest number of
votes cast for their election shall be elected to the Board of Directors.
Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders and a sum sufficient to redeem the shares
has been deposited with a bank,
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 5
<PAGE> 6
trust company, or other financial institution under an irrevocable obligation to
pay the holders the redemption price upon surrender of the shares.
2.13 CORPORATION'S ACCEPTANCE OF VOTES. If the name signed on a vote,
consent, waiver, proxy appointment, or proxy appointment revocation corresponds
to the name of a Shareholder, the Corporation, if acting in good faith, is
entitled to accept the vote, consent, waiver, proxy appointment, or proxy
appointment revocation and give it effect as the act of the Shareholder. If the
name signed on a vote, consent, waiver, proxy appointment, or proxy appointment
revocation does not correspond to the name of a Shareholder, the Corporation, if
acting in good faith, is nevertheless entitled to accept the vote, consent,
waiver, proxy appointment, or proxy appointment revocation and to give it effect
as the act of the Shareholder if:
a. the Shareholder is an entity and the name signed purports
to be that of an Officer or agent of the entity;
b. the name signed purports to be that of an administrator,
executor, guardian, or conservator representing the Shareholder and, if
the Corporation requests, evidence of the person's fiduciary status and
authority to act that is acceptable to the Corporation has been
presented to the Corporation;
c. the name signed purports to be that of a receiver or
trustee in bankruptcy of the Shareholder and, if the Corporation
requests, evidence of this status acceptable to the Corporation has
been presented to the Corporation;
d. the name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the Shareholder and, if the
Corporation requests, evidence acceptable to the Corporation of the
signatory's authority to sign for the Shareholder has been presented
with respect to the vote, consent, waiver, proxy appointment, or proxy
appointment revocation;
e. two or more persons are the Shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one
of the co-tenants or fiduciaries, and the person signing appears to be
acting on behalf of all the co-tenants or fiduciaries; or
f. the acceptance of the vote, consent, waiver, proxy
appointment, or proxy appointment revocation is otherwise proper under
rules established by the Corporation that are not inconsistent with any
other provision of this Section 2.13.
The Corporation is entitled to reject a vote, consent, waiver,
proxy appointment, or proxy appointment revocation if the Secretary or other
Officer or agent authorized to tabulate votes, acting in good faith, has
reasonable basis for doubt about the validity of the signature on it or about
the signatory's authority to sign for the Shareholder.
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 6
<PAGE> 7
Neither the Corporation nor its Officers nor any agent who
accepts or rejects a vote, consent, waiver, proxy appointment, or proxy
appointment revocation in good faith and in accordance with the standards of
this Section is liable for damages for the consequences of the acceptance or
rejection.
2.14 ACTION BY WRITTEN CONSENT. Any action required or permitted to be
taken at any meeting of the Shareholders may be taken without a meeting if a
written consent sets forth the action taken by the Shareholders and is signed by
persons representing a majority of the Shares entitled to vote on the subject
matter and the written consent is received by the Corporation. The consent shall
have the same force and effect as a majority vote of the Shares entitled to vote
at a meeting of the Shareholders and may be so stated in any document. Action
taken under this Section is effective as of the date the last writing necessary
to effect the action is received by the Corporation, unless all of the writings
specify a different effective date, in which case the specified date shall be
the effective date for the action. If enough Shareholders revoke their consent
to bring the total number of Shares entitled to vote that are voting on the
matters in the consent to less than a majority prior to what would otherwise be
the effective date, the action proposed in the consent shall be invalid. The
record date for determining Shareholders entitled to vote without a meeting is
the date the Corporation first receives a writing upon which the action is
taken.
Any Shareholder who has signed a document describing and
consenting to the action taken pursuant to this Section may revoke the consent
in a document signed by the Shareholder that describes the action and that
states that the Shareholder's prior consent to the action is revoked, but the
revocation shall be effective only if the writing is received by the Corporation
before the effective date of the action. Any and all written consents signed by
a Shareholder and returned to the Corporation by facsimile transmission shall
have the same force and effect as an original signature.
2.15 MEETINGS BY CONFERENCE TELEPHONE. Shareholders may, at their own
expense, participate in and hold meetings of Shareholders by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in the
meeting shall constitute presence in person at the meeting and waive notice of
the meeting, except where a person participates in the meeting for the express
purpose of objecting to the transactions of any business on the ground that the
meeting is not lawfully called or convened.
ARTICLE III
DIRECTORS
3.1 NUMBER OF DIRECTORS. The number of Directors of the Corporation
shall be no less than one and no more than ten. The number of Directors may be
increased or decreased from time to time by the Board of Directors within this
range, or the Board of Directors may amend these Bylaws to increase the number
of Directors of the Corporation, but no decrease shall have the effect of
reducing the term of any incumbent Director. Directors shall be elected at the
annual meeting of the Shareholders, except as provided in Section 3.2 below, and
each Director shall
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hold office until a successor is elected and qualified. Directors need not be
Shareholders of the Corporation or residents of the State of Nevada.
3.2 VACANCIES. Notwithstanding the fact that the remaining Directors
may constitute less than a quorum of the Board of Directors as fixed by Section
3.9 of these Bylaws, the affirmative vote of a majority of the remaining
Directors may fill any vacancy occurring in the Board of Directors and, during
the period between any two successive annual meetings of the Shareholders, may
fill any directorships resulting from an increase in the number of Directors. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his or her predecessor in office. A directorship to be filled by reason of an
increase in the number of Directors may be filled by the Board of Directors for
a term of office continuing only until the next election of one or more
Directors by the Shareholders. Any directorship to be filed by reason of an
increase in the number of Directors may also be filled by election at an annual
meeting or at a special meeting of Shareholders called for that purpose. Any
Director may resign from office at any time by giving written notice of
resignation to the Corporation, and shall take effect upon receipt by the
Corporation unless the notice specifies a later date. Any Director may be
removed from office at any annual meeting of Shareholders, or any special
meeting called for this purpose, for or without cause, though his or her term
may not have expired.
3.3 GENERAL POWERS. The business and affairs of the Corporation shall
be managed by its Board of Directors, who may exercise all powers of the
Corporation and do all lawful acts and things that are not, by the Act, the
Articles of Incorporation, or by these Bylaws, directed or required to be
exercised or done by the Shareholders. The term "Director," as used throughout
these Bylaws, shall expressly exclude Advisory Directors, unless specifically
indicated otherwise.
3.4 PLACE OF MEETINGS. The Directors of the Corporation may hold their
meetings, both regular and special, at any location within the contiguous United
States, or at any location outside the contiguous United States by consent of a
majority of the Directors.
3.5 ANNUAL MEETINGS. The first meeting of each newly-elected Board of
Directors shall be held without further notice immediately following the annual
meeting of the Shareholders, and at the same place, unless by unanimous consent
of the Directors then elected and serving the time or place is changed.
3.6 REGULAR MEETINGS. The Board of Directors may provide by resolution
the time and place for holding regular meetings without further notice to the
Directors.
3.7 SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by or at the request of the President or any Director. The person or
persons authorized to call special meetings of the Board of Directors may fix
any place, either within or outside Nevada, as the place for holding any special
meeting of the Board of Directors called by them.
3.8 NOTICE. Notice of any special meeting shall be given at least two
calendar days prior to the meeting by written notice either personally delivered
to each Director or mailed to each Director at his or her business address, or
by notice transmitted by telegraph, telex,
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facsimile transmission, e-mail, or other form of wire or wireless communication.
If mailed, the notice shall be deemed to be given and to be effective on the
earlier of (a) three days after the notice is deposited in the United States
mail, properly addressed, with postage prepaid; or (b) the date shown on the
return receipt, if mailed by registered or certified mail return receipt
requested. If notice is given by telex, facsimile transmission, e-mail, or other
similar form of wire or wireless communication, the notice shall be deemed to be
given and to be effective when sent, and with respect to a telegram, the notice
shall be deemed to be given and to be effective when the telegram is delivered
to the telegraph company. If a Director has designated in writing one or more
reasonable physical or mailing addresses, facsimile numbers, or e-mail addresses
for delivery of notice to the Director, notice sent by mail, telegraph, telex,
facsimile transmission, e-mail, or other form of wire or wireless communication
shall not be deemed to have been given or to be effective unless sent to at
least one of either the physical or mailing address, facsimile numbers, or
e-mail addresses, as the case may be.
3.9 QUORUM. At all meetings of the Board of Directors, the presence of
a majority of the number of Directors fixed by the Board of Directors shall be
necessary and sufficient to constitute a quorum for the transaction of business,
and the affirmative vote of at least a majority of the Directors present at any
meeting at which a quorum is present shall be the act of the Board of Directors,
except as may be otherwise specifically provided by the Act, the Articles of
Incorporation, or these Bylaws. If a quorum is not present at any meeting of
Directors, the Directors present at the meeting may adjourn the meeting from
time to time without notice other than announcement at the meeting until a
quorum is present.
3.10 PRESUMPTION OF ASSENT. A Director of the Corporation who is
present at a meeting of the Board of Directors or committee of the Board at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless:
a. the Director objects at the beginning of the meeting, or
promptly upon the Director's arrival, to the holding of the meeting or
the transaction of business at the meeting and does not later vote for
or assent to any action taken at the meeting;
b. the Director contemporaneously requests that his or her
dissent or abstention as to any specific action taken be entered in the
minutes of the meeting; or
c. the Director causes written notice of his or her dissent or
abstention as to any specific action to be received by the presiding
Officer of the meeting before its adjournment or by the Corporation
promptly after the adjournment of the meeting.
A Director may dissent to a specific action at a meeting, while assenting to
others. The right to dissent to a specific action taken at a meeting of the
Board of Directors or at a committee of the Board shall not be available to a
Director who voted in favor of the action.
3.11 ADVISORY BOARD. The Board of Directors may form an Advisory Board,
whose members need not be Shareholders of the Corporation, to provide advice,
counsel, and assistance to the Board of Directors.
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3.12 COMMITTEES. By resolution adopted by a majority of all the
Directors in office when the action is taken, the Board of Directors may
designate from among its members an executive committee and one or more other
committees, and appoint one or more members of the Board of Directors to serve
on them. To the extent provided in the resolution, each committee shall have all
the authority of the Board of Directors, except that no committee shall have the
authority to:
a. authorize distributions;
b. approve or propose to Shareholders action or proposals
required by the Act to be approved by Shareholders;
c. fill vacancies on the Board of Directors or any committee;
d. amend Articles of Incorporation;
e. adopt, amend, or repeal the Bylaws;
f. approve a plan of merger not requiring Shareholder
approval;
g. authorize or approve the reacquisition of shares unless
pursuant to a formula or method prescribed by the Board of Directors;
or
h. authorize or approve the issuance or sale of shares, or
contract for the sale of shares, or determine the designations and
relative rights, preferences, and limitations of a class or series of
shares, except that the Board of Directors may authorize a committee or
Officer to do so within limits specifically prescribed by the Board of
Directors.
The committee shall then have full power within the limits set by the Board of
Directors to adopt any final resolution setting forth all preferences,
limitations, and relative rights of the class or series and to authorize an
amendment of the Articles of Incorporation stating the preferences, limitations,
and relative rights of a class or series for filing with the Secretary of State
under the Act.
Sections 3.4-3.9 and 3.14 of these Bylaws, which govern
meetings, notice, waiver of notice, quorum, voting requirements, and action
without a meeting of the Board of Directors, shall apply to committees and their
members appointed under this Section.
Neither the designation of a committee, the delegation of
authority to a committee, or any action by a committee pursuant to its authority
shall alone constitute compliance by any member of the Board of Directors or a
member of the committee in question with the responsibility to conform to the
standard of care set forth in Section 3.16 of these Bylaws.
3.13 COMPENSATION OF DIRECTORS. Directors, as such, shall not receive
any stated salary for their services, but, by resolution of the Board of
Directors, a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the Board
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of Directors; provided that nothing contained in these Bylaws shall be construed
to preclude any Director from serving the Corporation in any other capacity and
receiving compensation for this service.
3.14 ACTION BY WRITTEN CONSENT. Any action required or permitted to be
taken at a meeting of the Board of Directors or any committee may be taken
without a meeting if a written consent, setting forth the action so taken, is
signed by a majority of the members of the Board of Directors or committee, and
the consent shall have the same force and effect as a majority vote at a
meeting, and this may be stated as such in any document or instrument filed with
the Secretary of State. Any and all written consents signed by a Director and
returned to the Corporation by facsimile transmission shall have the same force
and effect as an original signature.
3.15 MEETINGS BY CONFERENCE TELEPHONE. Members of the Board of
Directors or members of any committee designated by the Board of Directors may
participate in and hold a meeting of the Board or committee by conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such a
meeting shall constitute presence in person at the meeting and waiver of notice
of the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transactions of any business on the ground
that the meeting is not lawfully called or convened.
3.16 STANDARD OF CARE. A Director shall perform his or her duties as a
Director and as a member of any committee of the Board in good faith, in a
manner the Director reasonably believes to be in the best interests of the
Corporation, and with the care an ordinarily prudent person in a like position
would exercise under similar circumstances. In performing his or her duties, a
Director shall be entitled to rely on information, opinions, reports, or
statements, including financial statements and other financial data, prepared or
presented by the persons designated by the Board of Directors or by these
Bylaws; however, the Director shall not be considered to be acting in good faith
if he or she has knowledge concerning the matter in question that would cause
reliance on the information or documents to be unwarranted. A Director shall not
be liable to the Corporation or its Shareholders for any action he or she takes
or omits to take as a Director if, in connection with the action or omission,
the Director performs his or her duties in compliance with this Section.
The designated persons on whom a Director is entitled to rely
are (a) one or more Officers or employees of the Corporation whom the Director
reasonably believes to be reliable and competent in the matters presented, (b)
legal counsel, public accountant, or other person as to matters that the
Director reasonably believes to be within the person's professional or expert
competence, or (c) a committee of the Board of Directors on which the Director
does not serve if the Director reasonably believes the committee merits
confidence.
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ARTICLE IV
NOTICES
4.1 FORM OF NOTICE. Whenever, under the provisions of the Act, the
Articles of Incorporation, or these Bylaws, notice is required to be given to
any Director or Shareholder, and no provision is made as to how the notice shall
be given, it shall not be construed to mean personal notice, but any notice may
be given in writing by mail, postage prepaid, and addressed to the Director or
Shareholder at the address that appears on the books of the Corporation, or sent
by facsimile transmission to the facsimile number that appears for that Director
or Shareholder on the books of the Corporation, or sent by e-mail if the
Director or Shareholder has provided the Corporation with an e-mail address. Any
notice required or permitted to be given by mail shall be deemed to be delivered
when deposited in the United States mail, postage prepaid, and addressed to the
Director or Shareholder as stated above.
4.2 WAIVER. Whenever any notice is required to be given to any Director
or Shareholder of the Corporation, under the provisions of the Act, the Articles
of Incorporation, or these Bylaws, a waiver of notice in writing signed by the
person or persons entitled to notice, whether before or after the time stated in
the notice, shall be deemed equivalent to giving notice.
ARTICLE V
OFFICERS
5.1 IN GENERAL. The Officers of the Corporation shall be elected by the
Board of Directors and shall include at least a President, a Secretary, and a
Treasurer. The Board of Directors may also, if it chooses to do so, elect a
Chairman of the Board, one or more Vice Presidents, one or more Assistant
Secretaries, and one or more Assistant Treasurers, all of whom shall also be
Officers. Two or more offices may be held by the same person, and Officers need
not be Directors of the Corporation. In all cases where the duties of any
Officer, agent, or employee are not prescribed by the Bylaws or by the Board of
Directors, the Officer, agent, or employee shall follow the orders and
instructions of the President or Chairman of the Board of Directors of the
Corporation.
5.2 ELECTION. The Board of Directors, at its first meeting after the
annual meeting of the Shareholders, shall elect the Officers of the Corporation
as described above. The Board of Directors may appoint other Officers and agents
as it shall deem necessary and may determine the salaries of all Officers and
agents from time to time. The Officers shall hold office until their successors
are chosen and qualified or an Officer resigns. Any Officer elected or appointed
by the Board of Directors may be removed by majority vote of the Board whenever,
in its judgment, the best interests of the Corporation will be served. Election
or appointment of an Officer or agent shall not of itself create contract
rights.
5.3 VACANCIES. A vacancy in any office, however occurring, may be
filled by the Board of Directors, or by the Officer or Officers authorized by
the Board, for the unexpired portion of the Officer's term. If an Officer
resigns and the resignation is made effective at a later date, the Board of
Directors, or Officer or Officers authorized by the Board, may permit the
Officer to remain in office until the effective date and may fill the pending
vacancy before the effective date if the Board of Directors or Officer or
Officers authorized by the Board provide that the successor shall not take
office until the effective date. In the alternative, the Board of
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Directors, or Officer or Officers authorized by the Board of Directors, may
remove the Officer at any time before the effective date and may fill the
resulting vacancy.
5.4 CHAIRMAN. The Chairman of the Board of Directors, if there is a
Chairman, shall preside at all meetings of the Shareholders and the Board of
Directors and shall have any other powers as may from time to time be assigned
by the Board of Directors.
5.5 PRESIDENT. The President shall be the chief executive officer of
the Corporation, shall preside at all meetings of the Shareholders and the Board
of Directors, unless a Chairman of the Board has been elected, and shall have
the general and active management of the business of the Corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. Subject to the prior approval of the Board of Directors, the President
shall execute all contracts, mortgages, conveyances, or other legal instruments
in the name of and on behalf of the Corporation, but this provision shall not
prohibit the delegation of these powers by the Board of Directors to some other
Officer, agent, or attorney-in-fact of the Corporation.
5.6 VICE PRESIDENTS. The Vice President or, if there are more than one,
the Vice Presidents, in the order of their seniority or in any other order
determined by the Board of Directors, shall, in the absence or disability of the
President, perform the duties and exercise the powers of the President, and
shall generally assist the President and perform any other duties that the Board
of Directors prescribes.
5.7 SECRETARY. The Secretary shall:
a. prepare and maintain as permanent records the minutes of
the proceedings of the Shareholders and the Board of Directors, a
record of all actions taken by the Shareholders or Board of Directors
without a meeting, a record of all actions taken by a committee of the
Board of Directors in place of the Board of Directors on behalf of the
Corporation, and a record of all waivers of notice of meetings of
Shareholders and of the Board of Directors or any Board committee;
b. ensure that all notices are duly given in accordance with
the provisions of these Bylaws and as required by law;
c. serve as custodian of the corporate records and of the seal
of the Corporation and affix the seal to all documents when authorized
by the Board of Directors;
d. keep at the Corporation's registered office or principal
place of business a record containing the names and addresses of all
Shareholders in a form that permits preparation of a list of
Shareholders arranged by voting group and by class or series of shares
within each voting group that is alphabetical within each class or
series and that shows the address and the number of shares of each
class or series held by each Shareholder, unless this record is kept at
the office of the Corporation's transfer agent or registrar;
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<PAGE> 14
e. maintain at the Corporation's principal office the
originals or copies of the Corporation's Articles of Incorporation,
Bylaws, minutes of all Shareholders' meetings and records of all action
taken by Shareholders without a meeting for the past three years, all
written communications within the past three years to Shareholders as a
group or to the holders of any class or series of shares as a group, a
list of the names and business addresses of the current Directors and
Officers, a copy of the Corporation's most recent corporate report
filed with the Secretary of State, and financial statements showing in
reasonable detail the Corporation's assets and liabilities and results
of operations for the last three years;
f. have general charge of the stock transfer books of the
Corporation, unless the Corporation has a transfer agent;
g. authenticate records of the Corporation; and
h. in general, perform all duties incident to the office of
Secretary and all other duties that from time to time may be assigned
by the President, Chairman of the Board, or by the Board of Directors.
The Directors and/or Shareholders may designate a person other than the
Secretary or Assistant Secretary to keep the minutes of their respective
meetings. Any books, records, or minutes of the Corporation shall be in written
form or in a form capable of being converted into written form within a
reasonable time.
5.8 ASSISTANT SECRETARIES. Assistant Secretaries, if any, shall have
the duties and powers delegated to them by the Secretary, subject to supervision
by the Secretary.
5.9 TREASURER. The Treasurer shall be the principal financial Officer
of the Corporation, shall have the care and custody of all funds, securities,
evidences of indebtedness, and other personal property of the Corporation, and
shall deposit them in accordance with the instructions of the Board of
Directors. The Treasurer shall receive and give receipts and acquittance for
money paid in on account of the Corporation, and shall pay out of the
Corporation's funds on hand all bills, payrolls, and other just debts of the
Corporation of whatever nature upon maturity. The Treasurer shall perform all
other duties incident to the office of the Treasurer and, upon request of the
Board, shall make reports to the Board as may be required at any time. The
Treasurer shall, if required by the Board, give the Corporation a bond in a sum
and with the sureties that are satisfactory to the Board, conditioned upon the
faithful performance of his or her duties and for the restoration to the
Corporation of all books, papers, vouchers, money, and other property of
whatever kind in the Treasurer's possession or under his or her control that
belong to the Corporation. The Treasurer shall have all other powers and perform
all other duties that may from time to time be prescribed by the Board of
Directors, the Chairman of the Board, or the President.
The Treasurer shall also be the principal accounting Officer
of the Corporation. The Treasurer shall prescribe and maintain the methods and
systems of accounting to be followed, keep complete books and records of account
as required by the Act, prepare and file all
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local, state, and federal tax returns, prescribe and maintain an adequate system
of internal audit and prepare and furnish to the President and the Board of
Directors statements of account showing the financial position of the
Corporation and the results of its operations.
5.10 ASSISTANT TREASURERS. Assistant Treasurers, if any, shall have the
duties and powers delegated to them by the Treasurer, subject to supervision by
the Treasurer.
5.11 ATTESTATION. The signature of any Officer shall be effective
without an attestation.
ARTICLE VI
STOCK
6.1 CERTIFICATES. The Board of Directors shall be authorized to issue
any of its classes of shares with or without certificates. The fact that certain
shares are not represented by certificates shall have no effect on the rights
and obligations of Shareholders. If the shares are represented by certificates,
the shares shall be represented by consecutively numbered certificates signed,
either manually or by facsimile, in the name of the Corporation by one or more
persons designated by the Board of Directors. In case any Officer who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be an Officer before the certificate is issued, the certificate may
nonetheless be issued by the Corporation with the same effect as if he or she
were that Officer at the date of its issue. Certificates of stock shall be in a
form and shall contain information consistent with law as shall be prescribed by
the Board of Directors. If shares are not represented by certificates, within a
reasonable time following the issue or transfer of the shares, the Corporation
shall send the Shareholder a complete written statement of all of the
information required to be provided to holders of uncertificated shares by the
Act.
6.2 CONSIDERATION FOR SHARES. Certificated or uncertificated shares
shall not be issued until the shares represented by them are fully paid. The
Board of Directors may authorize the issuance of shares for consideration
consisting of any tangible or intangible property or benefit to the Corporation,
including cash, promissory notes, services performed, contracts for services to
be performed provided by the Act. The Board of Directors shall use its
discretion to determine whether the consideration received or to be received by
the Corporation is adequate for the shares issued as provided in the Act.
6.3 LOST CERTIFICATES. In case of the alleged loss, destruction, or
mutilation of a certificate of stock, the Board of Directors may direct the
issuance of a new certificate in place of that certificate upon the terms and
conditions in conformity with the law as the Board may prescribe. The Board of
Directors may in its discretion require an affidavit of lost certificate and/or
a bond in a form and amount and with the surety that it may determine before
issuing a new certificate.
6.4 TRANSFER OF SHARES. Shares of stock shall be transferable only on
the books of the Corporation by the holder of the shares in person or by his or
her duly-authorized attorney
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<PAGE> 16
and, upon surrender to the Corporation or to the transfer agent of the
Corporation of a certificate representing shares duly endorsed or accompanied by
proper evidence of succession, assignment, or authority to transfer, it shall be
the duty of the Corporation or the transfer agent of the Corporation to issue a
new certificate to the person entitled to it, cancel the old certificate, and
record the transaction upon its books.
6.5 RESTRICTION ON TRANSFER. Any restrictions imposed by the
Corporation on the sale, transfer, or other disposition of its shares must be
copied at length or in summary form and placed conspicuously on the face of each
certificate, or the back of each certificate with a notice of restriction on the
fact of each certificate, representing shares to which the restriction applies.
The certificate may, however, also state on its face that a restriction exists
pursuant to a specified document and that the Corporation will furnish a copy of
the document to the holder of the certificate without charge upon written
request to the Corporation at its principal place of business.
6.6 REGISTERED SHAREHOLDERS. The Corporation shall be entitled to
recognize the holder of record of any share or shares of stock as the holder in
fact of those shares and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in the share or shares on the part of
any other person, regardless of whether it shall have express or other notice of
the claim or interest, except as otherwise provided by law.
6.7 TRANSFER AGENT, REGISTRARS, AND PAYING AGENTS. The Board may, at
its discretion, appoint one or more transfer agents, registrars, and agents for
making payment upon any class of stock, bond, debenture, or other security of
the Corporation. These agents and registrars may be located either within or
outside Nevada. They shall have the rights and duties and shall be entitled to
the compensation as may be approved by the Board of Directors or the President
or Chairman.
ARTICLE VII
GENERAL PROVISIONS
7.1 DIVIDENDS. Dividends upon the outstanding shares of the
Corporation, subject to the provisions of the Act and of the Articles of
Incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting. Dividends may be declared and paid in cash, in property, or
in shares of the Corporation, provided that all declarations and payments of
dividends shall be in strict compliance with all applicable laws and the
Articles of Incorporation. The Board of Directors may fix in advance a record
date for the purpose of determining Shareholders entitled to receive payment of
any dividend, and the record date shall be not more than sixty days prior to the
payment date of the dividend, or the Board of Directors may close the stock
transfer books for this purpose for a period of not more than sixty days prior
to the payment date of the dividend. In the absence of any action by the Board
of Directors, the date upon which the Board of Directors adopts the resolution
declaring the dividend shall be the record date.
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7.2 FISCAL YEAR. The fiscal year of the Corporation shall be the
twelve-month period ending December 31 each year unless otherwise determined and
fixed by resolution of the Board of Directors.
7.3 SEAL. The Corporation shall have a seal and the seal may be used by
causing it or a facsimile of it to be impressed or affixed or in any manner
reproduced. Any Officers of the Corporation shall have authority to affix the
seal to any document requiring it. The corporate seal shall be circular in form
and shall contain the name of the Corporation and the words, "Seal, Nevada."
7.4 EXECUTION OF INSTRUMENTS. When authorized by the Board of Directors
or required by law, the President may execute, in the name of the Corporation,
deeds, conveyances, notices, leases, checks, drafts, bills of exchange,
warrants, promissory notes, bonds, debentures, contracts, and other papers and
instruments in writing, and, unless the Board of Directors shall order otherwise
by resolution, may make any contracts that the ordinary conduct of the
Corporation's business may require. These instruments shall require the
signature of the President only, with no attestation required, unless the Board
of Directors shall order otherwise by resolution.
The Board of Directors may, in its discretion, determine the
method and designate the signatory Officer or Officers, or other person or
persons, to execute any corporate instrument or document, or to sign the
corporate name without limitation, except where otherwise provided by law, and
the execution or signature shall be binding upon the Corporation. The Board of
Directors may also, in its discretion, authorize the use of a signature stamp
for the Chairman, President, or any other Officer or Director of the
Corporation, provided the Board prescribes safeguards against improper use that
the Board believes are adequate. A signature stamp of an Officer or Director of
the Corporation shall have the same force and effect as the original signature
of the Officer or Director if the Officer or Director consents, either verbally
or in writing, to the use of the signature stamp and a log and a file of all
documents on which the stamp is used is maintained by the Corporation.
7.5 ANNUAL STATEMENT. The Board of Directors may present at each annual
meeting, and when called for by vote of the Shareholders, at any special meeting
of the Shareholders, a full and clear statement of the business and condition of
the Corporation.
7.6 INTERESTED DIRECTORS, OFFICERS, AND SHAREHOLDERS. Any contract or
other transaction between the Corporation and any of its Directors, Officers, or
Shareholders (or any Corporation or firm in which any of them are directly or
indirectly interested) shall be valid for all purposes, notwithstanding the
presence of the Director, Officer, or Shareholder at the meeting authorizing the
contract or transaction, or his or her participation in the meeting. This
Section shall apply, however, only if the interest of each Director, Officer, or
Shareholder is known or disclosed: (a) to the Board of Directors, and the Board
nevertheless authorizes or ratifies the contract or transaction by a majority
vote of the Directors present, counting the interested person if a Director in
determining whether a quorum is present but not in calculating the majority
necessary to carry the vote; or (b) to the Shareholders, and they nevertheless
authorize or ratify the contract or transaction by a majority of the shares
present, counting each interested person's
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 17
<PAGE> 18
shares entitled to vote for quorum and voting purposes. This Section shall not
be construed to invalidate any contract or transaction that would be valid in
its absence.
ARTICLE VIII
INDEMNITY
8.1 DEFINITIONS. When used in this Article, unless the context
otherwise requires:
a. the term "Corporation" includes any domestic or foreign
predecessor entity of the Corporation in a merger, consolidation,
or other transaction in which the liabilities of the predecessor
are transferred to the Corporation by operation of law and in any
other transaction in which the Corporation assumes the liabilities
of the predecessor but does not specifically exclude liabilities
that are the subject matter of this Article;
b. the term "Director" means any person who is or was a
Director of the Corporation and any person who, while a Director of
the Corporation, is or was serving at the request of the
Corporation as a Director, Officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise;
c. the term "expenses" includes court costs and attorney's
fees;
d. the term "official capacity" means (1) when used with
respect to a Director, the office of Director in the Corporation,
and (2) when used with respect to a person other than a Director,
the elective or appointive office in the Corporation held by the
Officer, or the employment or agency relationship undertaken by the
employee or agent on behalf of the Corporation, but in each case
does not include service for any other foreign or domestic
corporation or any partnership, joint venture, sole proprietorship,
trust, employee benefit plan, or other enterprise; and
e. the term "proceeding" means any threatened, pending, or
contemplated action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such
an action, suit, or proceeding, and any inquiry or investigation
that could lead to such an action, suit, or proceeding.
8.2 PERMISSIVE INDEMNIFICATION OF DIRECTORS. The Corporation may
indemnify a person who was, is, or is threatened to be made a named defendant or
respondent in a proceeding because the person is or was a Director of the
Corporation only if it is determined in accordance with the procedure set forth
in Section 8.4 below that the person:
a. conducted him or herself in good faith;
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 18
<PAGE> 19
b. reasonably believed (1) in the case of conduct in his or
her official capacity as a Director of the Corporation, that his or
her conduct was in the Corporation's best interest, and (2) in all
other cases, that his or her conduct was at least not opposed to
the Corporation's best interests; and
c. in the case of any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful.
A person may not be indemnified under this section for obligations resulting
from a proceeding (1) in which the person is found liable on the basis that
personal benefit was improperly received by him or her, regardless of whether
the benefit resulted from an action taken in his or her official capacity, or
(2) in which the person is found liable to the Corporation. The termination of a
proceeding by judgment, order, settlement, or conviction, or on a plea of nolo
contendere or its equivalent is not of itself determinative that the person did
not meet the requirements set forth in this section. A person shall be deemed to
have been found liable in respect of any claim, issue, or matter only after the
person shall have been so adjudged by a court of competent jurisdiction after
exhaustion of all appeals from the judgment. A person may be indemnified under
this section against judgments, penalties (including excise and similar taxes),
fines, settlements, and reasonable expenses actually incurred by him or her in
connection with the proceeding; but, if the proceeding was brought by or on
behalf of the Corporation, the indemnification is limited to reasonable expenses
actually incurred by the person in connection with the proceeding.
8.3 PAYMENT OR REIMBURSEMENT OF EXPENSES IN ADVANCE OF FINAL
DISPOSITION. Reasonable expenses incurred by a Director who was, is, or is
threatened to be made a named defendant or respondent in a proceeding may be
paid or reimbursed by the Corporation, in advance of the final disposition of
the proceeding and without the determinations and authorizations of payment
specified in Section 8.4 below, after the Corporation receives (a) a written
affirmation by the Director of his or her good faith belief that he or she has
met the standard of conduct necessary for indemnification under this Article,
and (b) a written undertaking by or on behalf of the Director to repay the
amount paid or reimbursed if it is ultimately determined that he or she has not
met that standard, or if it is ultimately determined that indemnification of the
Director against expenses incurred by him or her in connection with that
proceeding is prohibited by the Act. The written undertaking required by this
section must be an unlimited general obligation of the Director but need not be
secured. It may be accepted without reference to financial ability to make
repayment. Notwithstanding any other provision of this Article, the Corporation
may pay or reimburse expenses incurred by a Director in connection with his or
her appearance as a witness or other participation in a proceeding at a time
when he or she is not a named defendant or respondent in the proceeding.
8.4 DETERMINATION OF INDEMNIFICATION AND PAYMENT OR REIMBURSEMENT OF
EXPENSES. A determination of indemnification or payment or reimbursement of
expenses under this Article must be made:
a. by a majority vote of a quorum consisting of Directors who,
at the time of the vote, are not named defendants or respondents in
the proceeding;
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 19
<PAGE> 20
b. if this quorum cannot be obtained, by a majority note of a
committee of the Board of Directors designated to act in the matter
by a majority vote of all Directors, consisting solely of two or
more Directors who at the time of the vote are not named defendants
or respondents in the proceeding;
c. by special legal counsel selected by the Board of Directors
or a committee of the Board of Directors by vote as set forth in
this Paragraph, or, if this a quorum cannot be obtained and a
committee cannot be established, by a majority vote of all
Directors; or
d. by the Shareholders in a vote that excludes the shares held
by Directors who are named defendants or respondents in the
proceeding.
Authorization of indemnification and determination as to reasonableness of
expenses must be made in the same manner as set forth in this section for the
determination that indemnification is permissible, except that if the
determination that indemnification is permissible is made by special legal
counsel, authorization of indemnification and determination as to reasonableness
of expenses must be made in the manner specified by this Section for the
selection of special legal counsel.
8.5 PERMISSIVE INDEMNIFICATION OF OFFICERS, EMPLOYEES, AGENTS, AND
OTHERS. The Corporation may indemnify and advance expenses to an Officer,
employee, or agent of the Corporation and to nominees and designees (who are not
or were not Officers, employees, or agents of the Corporation) who are or were
serving at the request of the Corporation as a Director, Officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the same
extent that it may indemnify and advance expenses to Directors under this
Article. Determinations of indemnification and advancement of expenses under
this Section must be made in the manner specified by Section 8.4 above.
8.6 EFFECT OF TERMINATION OF ACTION. The termination of any action,
suit, or proceeding by judgment, order, settlement, or conviction, or upon a
plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person seeking indemnification did not meet the standards
of conduct described in Sections 8.2 and 8.5 above. Entry of a judgment by
consent as part of a settlement shall not be deemed an adjudication of liability
as described in Section 8.2 above.
8.7 MANDATORY INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation shall indemnify any Director or Officer of the Corporation against
reasonable expenses incurred by him or her in connection with a proceeding in
which the Director or Officer is named defendant or respondent because he or she
is a Director or Officer of the Corporation if he or she has been wholly
successful, on the merits or otherwise, in the defense of the proceeding. If, in
a suit for the indemnification required by this Section, a court of competent
jurisdiction determines that the Director or Officer is entitled to
indemnification under this Section and Sections 78.7502 and 78.751 of the Act,
the court shall order indemnification and shall award to the Director or Officer
the expenses incurred in securing the indemnification.
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 20
<PAGE> 21
8.8 LIABILITY INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a Director, Officer, employee,
or agent of the Corporation, or who is or was serving at the request of the
Corporation as a Director, Officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, other
enterprise, or employee benefit plan against any liability asserted against him
or her and incurred by him or her in this capacity or arising out of his or her
status as such a person, regardless of whether the Corporation would have the
power to indemnify the person against that liability under this Article and the
provisions of the Act.
8.9 REPORT TO SHAREHOLDERS. Any indemnification of or advance of
expenses to a Director in accordance with this Article shall be reported in
writing to the Shareholders with or before the notice or waiver of notice of the
next Shareholders' meeting, or with or before the next submission to
Shareholders of a consent to action without a meeting pursuant to Section 2.14
of these Bylaws and, in any case, within the twelve-month period immediately
following the date of the indemnification or advance.
8.10 SPECIAL PROVISIONS FOR EMPLOYEE BENEFIT PLANS. For the purposes of
this Article, the Corporation is deemed to have requested a Director to serve as
a trustee or fiduciary of an employee benefit plan whenever the performance by
the Director of his or her duties to the Corporation also imposes duties on or
otherwise involves services by the Director to the plan or participants or
beneficiaries of the plan. Excise taxes assessed on a Director with respect to
an employee benefit plan pursuant to applicable law are deemed fines. Action
taken or omitted by a Director with respect to an employee benefit plan in the
performance of his or her duties for a purpose reasonably believed by him or her
to be in the interest of the participants and beneficiaries of the plan is
deemed to be for a purpose that is not opposed to the best interests of the
Corporation.
ARTICLE IX
BYLAWS
9.1 AMENDMENTS. These Bylaws may be altered, amended, or repealed and
new Bylaws may be adopted by the Board of Directors by a majority vote at any
regular
meeting or at any special meeting called for that purpose, unless the
Shareholders representing a majority of the shares entitled to vote have
expressly provided that the particular provision cannot be amended or repealed
by the Board of Directors.
9.2 WHEN BYLAWS SILENT. It is expressly recognized that when the Bylaws
are silent as to the manner of performing any corporate function, the provisions
of the Act shall control.
9.3 CONFLICTS. In the event of any irreconcilable conflict between
these Bylaws and either the Corporation's Articles of Incorporation or
applicable law, the Articles of Incorporation shall control.
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 21
<PAGE> 22
9.4 DEFINITIONS. Except as otherwise specifically provided in these
Bylaws, all terms used in these Bylaws shall have the same definition as in the
Nevada Private Corporations Act.
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 22
<PAGE> 23
CERTIFICATE
I, William G. Jayroe, certify that I am the duly-elected and acting
Secretary of NEVADA GOLD & CASINOS, INC. ("the Corporation"), and that these
Bylaws were adopted as the Bylaws of the Corporation by unanimous consent of the
Board of Directors of the Corporation dated this 1st day of September, 1999, and
I have affixed the corporate seal to these Bylaws below.
(SEAL)
------------------------------------
WILLIAM G. JAYROE, Secretary
BYLAWS OF NEVADA GOLD & CASINOS, INC. PAGE 23
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