<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Amendment No. 2)
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended DECEMBER 31, 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: Common Stock, Par
Value $.12 Per Share
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 10,147,750 as of January 18, 2000.
<PAGE> 2
This restatement has been made to reflect the restatement of the Company's
consolidated financial statements to correct a gain recorded on the sale of
Colorado real estate. This restatement amends Part I, Item 1 and Item 2 of our
Quarterly Report on Form 10-QSB for the three and nine month periods ended
December 31, 1999. The consolidated financial statements, and related footnotes
and Item 2 "Management's Discussion and Analysis of Financial Condition and
Results of Operations" have been restated accordingly. (See Footnote 6.)
This restatement corrects and conforms the Company's reporting for this
reporting period to appropriately reflect the accounting treatment included in
the audited consolidated financial statements of our Annual Report on Form
10-KSB for the year ended March 31, 2000.
<PAGE> 3
NEVADA GOLD & CASINOS, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I - FINANCIAL INFORMATION 3
ITEM 1 - FINANCIAL STATEMENTS
Balance Sheets as of December 31, 1999 (restated), and March 31, 1999 3
Statements of Operations for the Three Months Ended
December 31, 1999, and 1998 4
Statements of Operations for the Nine Months Ended
December 31, 1999 (restated), and 1998 5
Statements of Cash Flows for the Nine Months Ended
December 31, 1999 (restated), and 1998 6
Notes to Interim Financial Statements 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 11
PART II - OTHER INFORMATION 13
ITEM 1 - LEGAL PROCEEDINGS 13
ITEM 2 - CHANGES IN SECURITIES 13
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES 14
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 14
ITEM 5 - OTHER INFORMATION 14
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 14
SIGNATURES 14
EXHIBIT INDEX 14
</TABLE>
2
<PAGE> 4
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
--------------- ---------------
(Unaudited) (Audited)
(Restated)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 141,852 $ 161,234
Notes receivable 389,088 154,763
Other assets 125,346 153,315
--------------- ---------------
TOTAL CURRENT ASSETS 656,286 469,312
--------------- ---------------
Isle of Capri Black Hawk, L.L.C. 389,286 --
Restaurant Connections International, Inc. -- --
Colorado Real Estate (Gold Mountain Development, L.L.C.) 2,025,423 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 1,000,000 1,306,547
Note receivable - other 750,000 --
Furniture, fixtures, and equipment, net of accumulated depreciation of
$114,767 and $139,633 on March 31 and December 31, 1999, respectively 69,360 93,836
--------------- ---------------
TOTAL ASSETS $ 5,742,917 $ 4,529,746
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 128,224 $ 102,494
Accrued interest payable 90,271 125,993
Short-term notes payable 2,332,098 1,735,000
Current portion of long term debt 43,308 28,942
--------------- ---------------
TOTAL CURRENT LIABILITIES 2,593,901 1,992,429
--------------- ---------------
LONG-TERM DEBT
Mortgages payable, net of current portion 21,808 38,731
Notes payable, net of current portion 1,011,556 508,240
--------------- ---------------
TOTAL LONG-TERM DEBT 1,033,364 546,971
--------------- ---------------
TOTAL LIABILITIES 3,627,265 2,539,400
--------------- ---------------
STOCKHOLDERS' EQUITY
Preferred stock, $10 par value, 500,000 shares authorized, 141,490 shares
outstanding at March 31 and December 31, 1999 1,414,900 1,414,900
Common stock, $.12 par value, 20,000,000 shares authorized, 9,811,664 and
10,152,058 shares outstanding at March 31 and December 31, 1999,
respectively 1,217,847 1,177,400
Additional paid in capital 9,295,383 8,695,495
Accumulated deficit prior to development stage (12/27/93) (2,296,077) (2,296,077)
Accumulated deficit during development stage (7,516,401) (7,001,372)
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 2,115,652 1,990,346
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,742,917 $ 4,529,746
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 5
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
December 31
1999 1998
-------------- --------------
<S> <C> <C>
REVENUES
Royalty income $ 9,000 $ 6,000
Interest income 53,798 --
Other income 22,651 25,317
-------------- --------------
TOTAL REVENUES 85,449 31,317
-------------- --------------
EXPENSES
General and administrative 76,822 106,061
Interest expense 107,437 54,587
Salaries 96,788 93,722
Legal and professional fees 154,098 94,288
Other 8,878 16,193
-------------- --------------
TOTAL EXPENSES 444,023 364,851
-------------- --------------
EQUITY IN EARNINGS (LOSS) OF ISLE OF CAPRI
BLACK HAWK 389,286 (118,709)
EQUITY IN EARNINGS (LOSS) OF RCI (12,613) --
-------------- --------------
NET INCOME (LOSS) $ 18,099 $ (452,243)
============== ==============
PER SHARE INFORMATION
Net income (loss) $ 18,099 $ (452,243)
Preferred stock dividends accumulated (42,796) (36,747)
-------------- --------------
Loss available to common stockholders $ (24,697) $ (488,990)
============== ==============
Weighted average number of common
shares outstanding 10,104,892 9,444,608
============== ==============
Net loss per common share $ 0.00 $ (0.05)
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 6
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended Cumulative Amounts
December 31 During Development
1999 1998 Stage (Since 12/27/93)
--------------- --------------- ----------------------
(Restated) (Restated)
<S> <C> <C> <C>
REVENUES
Royalty income $ 23,000 $ 10,000 $ 258,000
Gain on sale-part interest Isle of Capri
Black Hawk -- 147,851 282,967
Gain on sale of Colorado Real Estate -- 197,304 197,304
Interest income 163,192 9,704 249,885
Other income 43,717 25,317 549,090
--------------- --------------- ---------------
TOTAL REVENUES 229,909 390,176 1,537,246
--------------- --------------- ---------------
EXPENSES
General and administrative 227,224 311,404 2,361,466
Interest expense 253,915 154,482 1,179,085
Salaries 266,128 225,125 1,105,360
Legal and professional fees 319,800 243,210 2,536,643
Other 36,783 47,039 520,137
--------------- --------------- ---------------
TOTAL EXPENSES 1,103,850 981,260 7,702,691
--------------- --------------- ---------------
EQUITY IN EARNINGS (LOSS) OF ISLE OF CAPRI
BLACK HAWK 389,286 (443,761) (1,238,493)
EQUITY IN EARNINGS (LOSS) OF RCI (30,374) -- (112,463)
--------------- --------------- ---------------
NET LOSS $ (515,029) $ (1,034,845) $ (7,516,401)
=============== =============== ===============
PER SHARE INFORMATION
Net income (loss) $ (515,029) $ (1,034,845) $ (7,516,401)
Preferred stock dividends accumulated (128,039) (115,425) (470,904)
--------------- --------------- ---------------
Loss available to common stockholders $ (643,068) $ (1,150,270) $ (7,987,305)
=============== =============== ===============
Weighted average number of common
shares outstanding 10,001,728 9,444,608 7,532,348
=============== =============== ===============
Net loss per common share $ (0.06) $ (0.12) $ (1.06)
=============== =============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 7
NEVADA GOLD & CASINOS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
December 31 Cumulative Amounts
---------------------------------- During Development
1999 1998 Stage (Since 12/27/93)
--------------- --------------- ----------------------
(Restated) (Restated)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (515,029) $ (1,034,845) $ (7,516,401)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation 24,866 24,835 130,827
Equity in net income of Isle of Capri Black Hawk (389,286) 443,761 1,238,493
Equity in net loss of RCI 30,374 -- 112,463
Consultant and investment banker option expense 74,047 78,445 1,096,020
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 (702,522) (811,382) (634,085)
Accounts payable and accrued liabilities (532) 79,764 1,316,875
--------------- --------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES (1,478,082) (1,367,273) (4,735,848)
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate and assets held for development (12,934) (556,301) (1,562,539)
Purchase of furniture, fixtures, and equipment (390) (3,659) (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 (18,836) -- (1,525,654)
Proceeds on disposition of property -- -- 45,746
--------------- --------------- ---------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (32,160) (559,960) (2,868,531)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 1,669,000 1,451,667 8,787,044
Common stock issued for cash, net of
offering costs 436,166 829,184 2,983,384
Fractional shares redeemed -- -- (36)
Payments on debt (614,306) (418,748) (4,326,948)
Salaries contributed by officers -- -- 1,000
Prepaid stock subscription -- -- 295,500
--------------- --------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,490,860 1,862,103 7,739,944
--------------- --------------- ---------------
Net increase (decrease) in cash and cash equivalents (19,382) (65,130) 135,565
Beginning balance - cash and cash equivalents 161,234 154,367 6,287
--------------- --------------- ---------------
Ending balance - cash and cash equivalents $ 141,852 $ 89,237 $ 141,852
=============== =============== ===============
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 289,301 $ 95,163 $ 844,259
--------------- --------------- ---------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 8
1. Business
Nevada Gold & Casinos, Inc., currently trades on the Boston Stock
Exchange under the ticker symbol "UWN" and on the over-the-counter bulletin
board under the ticker symbol "UWIN." Nevada Gold & Casinos shall be referred
to in this Form 10-QSB as "UWIN." UWIN has developed its business in the areas
of resorts 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 the summer of 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. ("RCI"), which in turn owns 19 Pizza Hut restaurants in Sao
Paulo, Brazil.
In addition, UWIN owns a majority interest in Vacationwish.com, Inc.,
an internet travel services Web site that, when completed, will match users
with their vacation preferences or "wishes," and UWIN owns two other
wholly-owned subsidiaries that own 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 December 31, 1999, and 1998; (b) the results of
operations for the nine months ended December 31, 1999 (restated), and 1998; (c)
the financial position as of December 31, 1999 (restated); and (d) the cash
flows for the nine month periods ended December 31, 1999 (restated), and 1998.
Interim results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 31, 1999
(restated), has been derived from the consolidated financial statements that
have not 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.
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.
7
<PAGE> 9
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 June 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 prior basis of $656,274 was reduced to zero, and
the remaining allocated loss of $1,499,436 is not reflected in the financial
statements. As of December 26, 1999 (Isle of Capri Black Hawk's quarter-end),
Isle of Capri Black Hawk's undistributed earnings allocable to UWIN for that
nine-month period totaled $1,888,723, which restored the losses suspended under
the equity method of accounting and increased UWIN's basis in the project
through December 26, 1999, to $389,286.
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 DECEMBER 26, 1999
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Current assets $ 13,955
Property and equipment 88,359
Other assets 3,779
-----------------
Total assets $ 106,093
=================
Current liabilities $ 18,925
Long-term debt 75,218
Members' equity 11,950
-----------------
Total liability and equity $ 106,093
=================
</TABLE>
8
<PAGE> 10
ISLE OF CAPRI BLACK HAWK
CONDENSED INCOME STATEMENT
FOR THE EIGHT MONTHS ENDED DECEMBER 26, 1999
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Revenue:
Casino $ 54,652
Food, beverage, and other 7,164
-----------------
Total revenue $ 61,816
=================
Operating expenses:
Casino $ 3,599
Gaming taxes 10,823
Food, beverage, and other 34,673
Depreciation 1,374
-----------------
Total operating expenses $ 50,469
Operating income $ 11,347
Interest expense, net (7,185)
-----------------
Net profit $ 4,162
=================
</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 operating 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 project adjacent to Black Hawk, Colorado.
The restaurant franchise segment involves UWIN's approximate 30% interest in
Restaurant Connections International, Inc., which in turn owns 19 Pizza Hut
restaurants in Sao Paulo, Brazil. The mining property and claims segment
involves the leasing of real 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.
9
<PAGE> 11
NINE MONTHS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Real Restaurant
Gaming Estate Franchise Mining Other Totals
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ -- $ -- $ -- $ 23,000 $ 43,717 $ 66,717
Segment profit (loss) (109,706) (109,706) -- (21,941) (197,469) (438,822)
Segment assets 389,286 2,397,173 -- 480,812 -- 3,267,271
Interest expense 91,523 161,865 -- 527 -- 253,915
Interest income -- -- -- -- 163,192 163,192
Equity in income (loss)
of equity investment 389,286 -- (30,374) -- -- 358,912
</TABLE>
NINE MONTHS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Real Restaurant
Gaming Estate Franchise Mining Other Totals
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ 147,851 $ 197,304 $ -- $ 10,000 $ 25,317 $ 380,472
Segment profit (loss) (147,771) (147,771) -- (29,554) (265,988) (591,084)
Segment assets 212,514 2,118,628 -- 480,812 -- 2,811,954
Interest expense 36,250 78,888 -- 241 39,103 154,482
Interest income -- -- -- -- 9,704 9,704
Equity in income (loss)
of equity investment (443,761) -- -- -- -- (443,761)
</TABLE>
Reconciliation of reportable segment assets to UWIN's consolidated totals as of
December 31 are as follows:
<TABLE>
<CAPTION>
Assets 1999 1998
------ ---------- ----------
<S> <C> <C>
Total assets for reportable segments: $3,267,271 $2,811,954
Cash not allocated to segments: 141,852 89,237
Other assets not allocated to segments: 2,333,794 1,214,005
---------- ----------
Consolidated total assets: $5,742,917 $4,115,196
---------- ----------
</TABLE>
6. Restatement
This restatement has been made to correct a gain recorded on the sale
of Colorado real estate which occurred during the three months ended September
30, 1999. At December 31, 1999, the effect of the restatement reduced the value
of Colorado Real Estate to $2,025,423 and increased the accumulated deficit
during development stage to $7,516,401 and reduced total stockholders' equity
to $2,115,652, from the amounts previously reported.
Total revenue for the nine months ended December 31, 1999 was corrected to
eliminate the gain recorded on sale of Colorado Real Estate. The net loss was
increased to a net loss of $515,029. The net loss available to common
stockholders was increased to a net loss of $643,068 or $0.06 per share.
Total revenue included in the "Cumulative Amounts During Development Stage
(since 12/27/93)" column of the Consolidated Statements of Operations was
corrected to reduce the gain recorded on sale of Colorado Real
10
<PAGE> 12
Estate to $197,304. The net loss was increased to a net loss of $7,516,401. The
net loss available to common stockholders was increased to a net loss of
$7,987,305 or $1.06 per share.
This restatement corrects and conforms the Company's reporting for this
reporting period to appropriately reflect the accounting treatment included in
the audited consolidated financial statements of the Annual Report on Form
10-KSB for the year ended March 31, 2000.
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/A.
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 $2,397,173 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 December 31, 1999, UWIN had other assets in the amount of $125,346,
consisting of prepaid expenses for consulting fees, and a security deposit.
UWIN also has notes receivable from an affiliate, Clay County Holdings, Inc.
("CCH"), in the amount of $1,389,088.
Results of Operations
Comparison of three-month period ending December 31, 1999 and December
31, 1998
REVENUES. Revenues increased $54,132 for the three-month period ended
December 31, 1999, compared to the three months ended December 31, 1998.
Current revenues are attributable to monthly payments under the lease between
Goldfield Resources, Inc., and Romarco Nevada, Inc.; interest income from loans
to affiliates; miscellaneous income, and income from a claim settlement.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses decreased $29,239 for the three month period ending December 31, 1999,
as compared to the same period in the prior year. The decrease is attributed to
a reduction in telephone expense of $1,200, office and supply expenses of
$3,000, and travel expenses of $25,000.
INTEREST EXPENSE. Interest expense increased $52,850 for the three
months ended December 31, 1999, as compared to the same period last year due to
increased debt financing.
11
<PAGE> 13
SALARIES. Salary expense increased $3,066 for the three months ended
December 31, 1999, as compared to the same period last year. The increase is
attributed to a change in personnel.
LEGAL AND PROFESSIONAL FEES. Legal and professional fees increased
$59,810 for the three-month period ended December 31, 1999, as compared to the
three-month period ended December 31, 1998. This increase is attributable to an
increase in outside consulting and outside legal fees.
NET INCOME. Net income for the three months ended December 31, 1999,
was $18,099, as compared to a net loss of $452,243 for the three months ended
December 31, 1998. This increase in net income is due to UWIN's equity in
earnings of Isle of Capri Black Hawk in the amount of $389,286 for the current
three-month period.
Comparison of nine-month period ending December 31, 1999 and December
31, 1998
REVENUES. Revenues decreased $160,267 for the nine-month period ended
December 31, 1999, compared to the nine months ended December 31, 1998. The
decrease in the current period is primarily attributable to a gain on the sale
of part interest in the Isle of Capri-Blackhawk and a gain recorded on a land
exchange, both recorded in the prior nine-month period ending December 1998.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses decreased $84,180 for the nine-month period ending December 31, 1999,
as compared to the same period in the prior year. The decrease is attributed to
reductions in telephone expenses of $6,000, office and supply expenses of
$7,000, travel expenses of $14,000, commissions of $4,000, property expenses of
$5,500, and lease, advertising, and miscellaneous expenses of $10,000. Also,
UWIN began paying Mr. Winn's salary directly in September 1998, and therefore
its contract with Aaminex for the services of Mr. Winn, which was classified as
a general and administrative expense, was terminated in September 1998.
INTEREST EXPENSE. Interest expense increased $99,433 for the nine
months ended December 31, 1999, as compared to the same period last year due to
increased debt financing.
SALARIES. Salary expense increased $41,003 for the nine months ended
December 31, 1999, as compared to the same period last year. The increase was
primarily due to UWIN beginning in September 1998 to pay Mr. Winn directly a
salary of $8,333 per month instead of through the prior retainer agreement with
Aaminex.
LEGAL AND PROFESSIONAL FEES. Legal and professional fees increased
$76,590 for the nine-month period ended December 31, 1999, as compared to the
nine-month period ended December 31, 1998. This increase is attributable to an
increase in outside consulting fees of $115,000 and a decrease in outside legal
and accounting fees of $38,000.
NET INCOME. Net loss for the nine months ended December 31, 1999, was
$515,029, as compared to a net loss of $1,034,845 for the nine months ended
December 31, 1998. This decrease in net loss is primarily due to UWIN's equity
in earnings of Isle of Capri Black Hawk in the amount of $389,286 and interest
income of $163,192.
Historical Cash Flows
OPERATING ACTIVITIES. Cash used in operating activities during the
nine months ended December 31, 1999, amounted to $1,478,082 as compared to
$1,367,273 used for the nine month-period ending December 31, 1998.
INVESTING ACTIVITIES. Cash used in investing activities during the
nine months ended December 31, 1999, amounted to $32,160, as compared to
$559,960 of cash used in investing activities for the nine months ended
December 31, 1998. The current nine-month period amount relates primarily to
advances to affiliates.
FINANCING ACTIVITIES. UWIN has financed its operating and investing
activities primarily from the proceeds of private placements of its common
stock and through debt. During the nine months ended December 31, 1999, UWIN
received $436,166 from cash sales of its common stock, a decrease of $393,018,
as compared to the $829,184 received from cash sales of common stock for the
nine months ended December 31, 1998. During the
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nine months ended December 31, 1999, UWIN received proceeds of $1,669,000 from
the issuance of debt, an increase of $217,333 over the $1,451,667 received from
proceeds of debt in the nine months ended December 31, 1998. During the nine
months ended December 31, 1999, UWIN expended $614,306 for payments on
outstanding debt, a increase $195,558 over the $418,748 expended for payments
on outstanding debt for the nine months ended December 31, 1998.
Liquidity and Capital Resources
As of December 31, 1999, UWIN had a cash balance of $141,852. Because
the cash flow 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 its operations or to finance
its other business development opportunities. 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. UWIN has
historically been successful in obtaining the funds necessary to continue
operations, and has recently obtained a long-term line of credit to satisfy its
need for operating costs for the next twelve months. However, 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 December 31, 1999, UWIN has received
proceeds of $148,293 from issuing 87,582 shares of common stock, and $1,580,000
in debt financing to cover its operating deficit and current debt payments. The
current outstanding indebtedness bears interest at rates from 9-12% per annum.
In addition, due to note conversions by two investors, UWIN was able to issue
stock in lieu of cash payments for debt obligations totaling $51,731.
Year 2000 Compliance Issues
As of the date of this Form 10-QSB, UWIN has not suffered from any
Year 2000-related computer problems. None of UWIN's outside vendors, including
its registrar/transfer agent, electricity providers, and other vendors, have
reported to us that they have suffered from any Year 2000-related problems,
either. UWIN will continue to monitor the Year 2000 computer situation and will
maintain its contingency plans as previously reported until UWIN determines
that the monitoring for these issues is no longer necessary.
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 October 1 and December
31, 1999. Each issuance was exempt from registration pursuant to Section 4(2)
and/or Regulation D under the Act as a transaction by an issuer not involving
any public offering. No underwriter was utilized in the offering and no
commissions were paid.
UWIN issued 87,582 shares of common stock to three accredited
investors for an aggregate purchase price of approximately $142,000.
UWIN issued 32,070 shares of common stock to two accredited investors
as note conversions in the amount of $51,731.
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ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5 - OTHER INFORMATION
Not applicable.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) Index to Exhibits
*3.4 - Amended and Restated Articles of Incorporation
(previously filed with UWIN's 9/99 10-QSB)
*3.5 - Amended Bylaws of Nevada Gold & Casinos, Inc.
(previously filed with UWIN's 9/99 10-QSB)
*4.1 - Deed of Trust
*4.2 - Master Secured Note
*4.3 - Note Participation Agreement
*4.4 - Common stock certificate specimen (previously filed
as Exhibit 4.1(1) to UWIN's S-8 Registration
Statement filed on 9/24/99)
*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 (previously filed as Exhibit
27 to UWIN's 12/99 10-QSB)
*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 amended report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEVADA GOLD & CASINOS, INC.
By: /s/ H. Thomas Winn
----------------------------
President
Date: July 14, 2000
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