<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Amendment No. 1)
(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
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 six month periods ended
September 30, 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 September 30, 1999 (restated), and March 31, 1999 3
Statements of Operations for the Three Months Ended
September 30, 1999 (restated), and 1998 4
Statements of Operations for the Six Months Ended
September 30, 1999 (restated), and 1998 5
Statements of Cash Flows for the Six Months Ended
September 30, 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 14
ITEM 1 - LEGAL PROCEEDINGS 14
ITEM 2 - CHANGES IN SECURITIES 14
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 15
</TABLE>
2
<PAGE> 4
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)
(Restated)
<S> <C> <C>
ASSETS
CURRENT ASSETS
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.) 2,023,898 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 $ 4,650,011 $ 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 (7,534,502) (7,001,372)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 1,890,527 1,990,346
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,650,011 $ 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
September 30
1999 1998
----------- -----------
(Restated)
<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 -- 197,304
Interest income 56,868 8,895
Other income 11,065 --
----------- -----------
TOTAL REVENUES 75,933 358,050
----------- -----------
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) $ (268,477) $ 37,764
=========== ===========
PER SHARE INFORMATION
Net income (loss) $ (268,477) $ 37,764
Preferred stock dividends accumulated (42,796) (36,347)
----------- -----------
Income (loss) available to common stockholders $ (311,273) $ 1,417
=========== ===========
Weighted average number of common
Shares outstanding 9,935,592 9,076,387
=========== ===========
Net income (loss) per common share $ (0.03) $ 0.00
=========== ===========
</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>
Six Months Ended
September 30 Cumulative Amounts
-------------------------- During Development
1999 1998 Stage (Since 12/27/93)
----------- ----------- -----------------------
(Restated) (Restated)
<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 -- 197,304 197,304
Interest income 109,394 9,704 196,087
Other income 21,065 -- 526,437
----------- ----------- -----------
TOTAL REVENUES 144,459 358,859 1,451,795
----------- ----------- -----------
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 LOSS $ (533,129) $ (582,601) $(7,534,502)
=========== =========== ===========
PER SHARE INFORMATION
Net loss $ (533,129) $ (582,601) $(7,534,502)
Preferred stock dividends accumulated (85,243) (78,678) (428,108)
----------- ----------- -----------
Loss available to common stockholders $ (618,372) $ (661,279) $(7,962,610)
=========== =========== ===========
Weighted average number of common
shares outstanding
9,905,960 8,991,060 7,467,808
=========== =========== ===========
Net loss per common share $ (0.06) $ (0.08) $ (1.07)
=========== =========== ===========
</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>
Six Months Ended
September 30 Cumulative Amounts
-------------------------- During Development
1999 1998 Stage (Since 12/27/93)
----------- ----------- ----------------------
(Restated) (Restated)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (533,129) $ (582,601) $(7,534,502)
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 1,446,557
----------- ----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (335,845) (1,004,932) (3,593,611)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate and assets held for development (10,903) (497,104) (1,560,509)
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 (116,896) (500,331) (2,953,267)
----------- ----------- -----------
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
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 8
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 30, 1999 (restated), and 1998; (b) the
results of operations for the six months ended September 30, 1999 (restated),
and 1998; (c) the financial position as of September 30, 1999 (restated); and
(d) the cash flows for the six-month periods ended September 30, 1999
(restated), and 1998. Interim results are not necessarily indicative of results
for a full year.
The consolidated balance sheet presented as of September 30, 1999
(restated), 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.
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
7
<PAGE> 9
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.
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
===========
Current liabilities $ 16,871
Long-term debt 75,428
Members' equity 10,876
-----------
Total liability and equity $ 103,175
===========
</TABLE>
8
<PAGE> 10
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 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.
9
<PAGE> 11
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 $ -- $ -- $ -- $ 14,000 $ 21,065 $ 35,065
Segment profit (loss) (20,062) (20,062) -- (4,012) (36,113) (80,249)
Segment assets -- 2,395,648 -- 480,812 -- 2,876,460
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, 1999
-------------------------------------------------------------------------------------------
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: $ 2,876,460 $ 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: $ 4,650,011 $ 3,896,040
----------- -----------
</TABLE>
6. Restatement
This restatement has been made to correct a gain recorded on the sale
of Colorado real estate during the three months ended September 30, 1999. At
September 30, 1999, the effect of the restatement reduced the value of Colorado
Real Estate to $2,023,898 and increased the accumulated deficit during
development stage to $7,534,502 and reduced total stockholders' equity to
$1,890,527, from the amounts previously reported.
10
<PAGE> 12
Total revenue for the three months ended September 30, 1999 was
corrected to eliminate the gain recorded on sale of Colorado Real Estate. Net
income was reduced to a net loss of $268,477. Net income available to common
stockholders was reduced to a net loss of $311,273 or $0.03 per share.
Total revenue for the six months ended September 30, 1999 was corrected
to eliminate the gain recorded on sale of Colorado Real Estate. The net loss was
increased to a net loss of $533,129. The net loss available to common
stockholders was increased to a net loss of $618,372 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 Estate to
$197,304. The net loss was increased to a net loss of $7,534,502. The net loss
available to common stockholders was increased to a net loss of $7,962,610 or
$1.07 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 $2,395,648 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 decreased $282,117 for the three-month period ended
September 30, 1999, compared to the three months ended September 30, 1998. The
decrease in the current period is primarily attributable to a gain
11
<PAGE> 13
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 period ending September 1998.
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.
SALARIES. Salary expense increased $18,790 for the three months ended
September 30, 1999, as compared to the same period last 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.
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 (LOSS). Net loss for the three months ended September 30,
1999, was $268,477, as compared to net income of $37,764 for the three months
ended September 30, 1998. This decrease in net income is due to a gain
recognized on a land exchange and a gain on the sale of part interest in the
Isle of Capri-Blackhawk that took place for the period ending September 1998.
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
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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:
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.
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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.
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
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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: July 14, 2000
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